Market News

Soybeans, corn, wheat see good gains

Soybeans were higher on commercial and technical buying. The trade is monitoring U.S. harvest activity and planting conditions in South America, with some rain in the forecast for parts of Argentina and Brazil. Conditions in South America remain widely mixed, too dry in some areas, too wet in others. There are also forecasts for hotter than normal temperatures in southern Brazil, compounding the dryness related issues in that part of the country. For now, analysts are expecting another record crop for Brazil and a big rebound in production for Argentina. China bought 132,000 tons of 2023/24 U.S. soybeans ahead of the open and there was some spillover from bean meal, which surged for a second consecutive session on demand expectations and product spread trade. That spread trade and follow through selling pressured soybean oil.

Corn was modestly higher on short covering and technical buying. Near-term U.S. harvest forecasts are favorable, but there is the chance of a shift to a wetter pattern next week. That would cause some delays and could impact quality. Unless there are significant delays though, activity should be wrapped up, or very close to it, in time for potential yield adjustments in the next round of supply and demand estimates on November 9th. Corn is also keeping an eye on planting conditions in Argentina and Brazil. The U.S. Energy Information Administration says ethanol stocks last week fell to their lowest levels since late 2021, at 21.112 million barrels, a drop of 414,000 on the week and 732,000 on the year, while production hit a five-week high at 1.035 million barrels a day, an increase of 31,000 from last week and 19,000 from last year.

The wheat complex was higher on short covering and technical buying. There was another round of support from mostly higher global prices and talk new export demand for U.S. wheat. There’ve been no sales reported this week, yet, by the USDA, but Thursday’s weekly numbers will show if there was more demand from China than that one announced sale. China’s domestic prices are significantly higher than most export offers, so it’s more profitable to buy imported wheat than on hand supplies. Australia’s crop should be a lot smaller than last year and there’s talk India might drop its import tariff, both of which could boost export demand for U.S. wheat. Drought damage in Argentina and a smaller crop in Brazil could also open up some opportunities. Still, any sustained improvement in demand is a big question. Russia remains in control of the export market and could see more trade with China under a recent import agreement, while Ukraine continues to ship grain despite the ongoing war.

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