Market News

Soybeans, corn, wheat close in positive territory

Soybeans were higher on commercial and technical buying. Demand is solid and even with recent rainfall, there’s a lot of talk about replanting in northern and central Brazil and a probable return to hot, dry weather. That’s in addition to the wetter than normal conditions in portions of southern Brazil. Some farmers are reportedly replanting some of their soybeans and there’s increased talk of switching from soybeans to cotton, which would eliminate potential second crop corn acreage. CONAB’s updated estimates for Brazil are out December 7^th. Farmers in Argentina are reportedly holding back sales until their new president is sworn in next month. The incoming president is widely expected to be more friendly to ag, at least on a trade basis, but there are a lot of unknowns. Soybean meal was mixed on spread trade and profit taking, while bean oil was supported by demand expectations.

Corn was modestly higher on commercial and technical buying. Corn is watching the weather in Brazil and the impact on planting, especially the second crop, which is planted after soybeans are harvested. Soybeans are being replanted in parts of Brazil, potentially pushing some of the second crop past the optimal window, and if soybean farmers switch to cotton, those acres would be lost for the second crop due to the difference in growing seasons. The trade is also keeping an eye on potential export improvements with Argentina’s farmer selling slowdown. The U.S. harvest is ahead of average, but some areas are seeing late delays. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was higher on short covering and technical buying. Wheat is oversold, but any sustained upside will continue to be limited by the slow export demand. Russia remains in control of the wheat export market, Germany’s prices are below the U.S., and Ukraine continues to export grain, even after the collapse of the Black Sea Grain Initiative. There were reports during the session of Russia bombing Ukraine’s Odesa port, but it remains to be seen how much damage was done in this round of attacks and what impact it will have on shipping. Winter wheat planting in Ukraine is almost complete, with production projected at 18 million to 20 million tons. The USDA’s next round of supply, demand, and production numbers is out December 8^th. U.S. winter wheat planting is nearly over and the crop is heading into dormancy in considerably better shape than last year.