Market News

Soybeans higher ahead of holiday break

Soybeans ended the day higher, in lighter volume business. The USDA announced a sale to China on Wednesday morning, which did help the trade get off to a solid start.  Development conditions in South America continue to look favorable, with more rain on the way for some areas. It looks like South America is on track for a very large crop this year, but there are months to go until harvest. That could limit the upside potential for the soybean market in the near and midterm, unless there is a significant change in expectations.  The USDA’s next round of supply, demand, and production numbers is out on December 10th, while CONAB’s updated outlook for Brazil is set for the 12th. Soybean meal was higher on Wednesday, while soybean oil moved lower on profit-taking. 

Corn was mostly lower on fund and technical selling. Corn continues to follow the weather in South America as it is generally favorable crop development in most of the region. President-elect Trump’s proposed 25% tariff on imports from Mexico and Canada remains a background concern. The Energy Information Administration released its weekly ethanol numbers, production increased slightly for the week, but is a record high 1.12 million barrels per day.  Stocks hit an 8-week high and are up 7 percent on the year.  Exports of ethanol increased more than 9 percent, notching an 11-week high.

The wheat complex was lower as U.S. wheat remains at a competitive disadvantage on the global market.  There’s also harvest pressure from Argentina and Australia, along with price competition from the Black Sea Region.  The USDA’s final U.S. winter wheat rating ahead of dormancy is solid at 55% good to excellent, which has been a significant improvement in recent weeks.   The USDA and commodity markets are closed Thursday for Thanksgiving and markets will close early Friday.