Market News

Soybeans, corn, wheat see red at midweek

Soybeans were lower on fund and technical selling. Near-term conditions are hot and dry in central and northern Brazil ahead of a move to wetter weather expected to last into early 2024. Unknown destinations bought 125,000 tons of 2024/25 U.S. beans. That’s the sixth business day in a row with an announced sale of U.S. soybeans to either unknown destinations or China, but those were all for 2023/24. The USDA’s weekly sales numbers are out Thursday morning. Soybean meal and oil saw another round of liquidation linked to the drop in Argentina’s currency and expectations for new policies under the recently inaugurated presidential administration. That includes higher tariffs on some imports and increased export taxes for some major commodities, excluding soybeans. NOPA November crush numbers are out Friday.

Corn was lower on fund and technical selling. Corn is watching weather in South America, with more rain in the forecast for already wet areas of southern Brazil and good conditions in Argentina. The big test for South America will be Brazil’s second corn crop, which will be impacted by the soybean planting delays. CONAB’s updated outlook for Brazil is set for January 4th, with new USDA supply, demand, and production numbers on the 12th. Ethanol margins have slipped but remain in positive territory. The U.S. Energy Information Administration says production last week averaged 1.074 million barrels a day, down 2,000 on the week, but up 13,000 on the year, with stocks of 22.1 million barrels, an increase of 661,000 from the prior week, but a drop of 2.309 million from a year ago.

The wheat complex was sharply lower on profit taking and technical selling, along with some higher trade in the dollar during the session. There is precipitation in the near-term forecast for parts of the central and southern U.S. Plains. That’s going to boost soil moisture in some of the driest portions of the region, but there is still persistent drought impact on the hard red winter crop. The recent pop in demand for U.S. soft red winter wheat is a positive, but Russia remains in control of the global market due to a price advantage. In fact, support from those sales to China and the cut in domestic SRW supplies has priced U.S. soft red winter out of the export market. In comparison, hard red winter export demand remains extremely slow. The trade continues to monitor winter wheat planting and development conditions in the northern hemisphere and harvest activity in the southern hemisphere. European Union and Ukraine wheat exports are behind a year ago because of Russia’s dominance. Argentina is expected to plant much more wheat next year because of new governmental policies.

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