Market News

Soybeans see firm finish as corn drifts downward

Soybeans were modestly higher on short covering and technical buying. Soybeans continue to watch U.S. harvest activity, expecting a warmer, drier pattern in many key growing areas. That should allow some states to finish in the next few days. Excessive rain is an issue in southern Brazil, while much of northern Brazil and Argentina are dry. That wet weather in southern Brazil is expected to lead to at least some replanting. There’s still hope for northern Brazil and Argentina as the El Nino pattern fully emerges in the Southern Hemisphere. The USDA’s updated supply, demand, and production numbers are out November 9th, along with CONAB’s updated outlook for Brazil. Deliveries against the November soybean contract have been a little heavier than expected. Soybean meal was mostly higher on bear spreading, with traders rolling out of December and into deferred months, while bean oil was lower on profit taking. The USDA says 175 million bushels of soybeans were crushed in September, up 6 million from August and 7 million from September 2022.

Corn was modestly lower on fund and technical selling. Corn is monitoring the last quarter or so of the U.S. corn harvest, with better-than-expected yields in some areas, along with weather in South America. Any significant delays or replanting in the last half of Brazil’s soybean crop could create issues for their critical second corn crop, the source of most of that nation’s exports. Export demand remains slow, aside from the recent uptick from Mexico, but could improve soon, and ethanol margins continue to be solid. The U.S. Energy Information Administration says production last week averaged 1.052 million barrels a day, up 12,000 on both the week and the year. The big story in the weekly numbers was demand, with stocks falling 386,000 barrels from the prior week and 1.22 million from a year ago to 21.012 million barrels, the tightest domestic supply in two years. The USDA says 430.134 million bushels of corn were used for ethanol production in September, down 3% on the month, but up 12% on the year, with DDGS production at 1,700,154 tons, 5% under the previous month, but 5% above a year ago.

The wheat complex was mostly modestly higher. While wheat was due for a bounce, slow export demand limited the upside. China is buying wheat after recent crop damage – the question is how much of that will be from the U.S. Some sales have been booked in recent weeks, but Beijing made a splash earlier this week by purchasing 2.5 million tons of wheat from Australia and France. That’s despite Russia having the lowest reported prices and continuing to take up a lot of global market share. Ukraine is also still exporting grain, now using an alternative corridor in the Black Sea, along with a couple of other routes. Ukraine’s Ag Ministry says exports are behind the year ago pace, with no official reason given, but it’s a pretty safe bet to say that’s because of continued Russian attacks on infrastructure and Moscow’s sabotage of the Black Sea Grain Initiative. The USDA’s weekly sales numbers are out Thursday morning. The USDA says 231 million bushels of wheat were ground for flour in the third quarter of 2023, 4% more than Q2 of this year, but 3% less than Q3 of last year.

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