Soybeans, corn down, but still gain on week
Soybeans were modestly lower on profit taking and technical selling but finished the week solidly higher. The trade was expecting good harvest progress in most key U.S. growing areas over the next couple of weeks. The USDA’s next update is out Monday afternoon. The USDA’s next production estimate is out Friday and ahead of the numbers, Allendale has beans at 4.321 billion bushels with an average yield of 52.22 bushels per acre, IHS Markit has the crop at 4.294 billion bushels with a yield of 51.9 bushels per acre, and StoneX pegs production at 4.351 billion bushels with an average yield of 52.4 bushels per acre. China and unknown destinations both bought 2020/21 U.S. beans, 264,000 tons and 252,000 tons, respectively. That marked five days in a row with an announced sale for a running total of 1,169,300 tons. The outright sale to China can be seen a surprise because of the current national holiday. October soybean meal hit a two-year high for a spot contract on tighter soybean supply implications, while bean oil closed lower, following crude oil. Soybean products are also waiting to see if Argentina follows through on plans to lower export taxes on beans and products to 30% through the end of the year. That move has been called “inadequate” by a consortium of Argentina’s major farm groups. Argentina is the world’s biggest exporter of soybean products.
Corn was modestly lower on profit taking and technical selling, while still closing with good week to week gains. Corn might have taken profits but still held on to most of the week’s solid rally after the USDA’s surprisingly bullish quarterly stocks report on the 30th. The broader market didn’t have much of an impact on grains and oilseeds, with general bearishness following lower than expected jobs numbers and the President and first lady testing positive for COVID-19. Along with U.S. harvest activity, the trade is also watching conditions in Argentina and Brazil. The USDA will also be adjusting global production expectations in next week’s supply, demand, and production update. Domestically, Allendale estimates the 2020 corn crop at 14.87 billion bushels with an average yield of 178.94 bushels per acre, IHS Markit sees production at 14.812 billion with a yield of 177.8, and StoneX projects the crop at 14.942 billion bushels with an average yield of 179 bushels per acre. Ethanol futures were unchanged.
The wheat complex was mixed, closing firm to sharply higher for the week. Chicago and Kansas City were up, watching dry weather during planting in the U.S. Plains and Black Sea region. Parts of Ukraine have received at least scattered rainfall recently, while most of Russia is expected to remain dry and drought conditions are present in portions of the hard and soft red winter regions. Minneapolis was down, pressured by the dollar, but with the December contract still able to post a modest week to week gain. The USDA won’t be adjusting 2020 U.S. wheat production estimates on the 9th, those were in the most recent small grains summary, but the trade will be paying close attention to the potential domestic balance sheet and global changes, with Allendale projecting U.S. ending stocks 869 million bushels and world ending stocks at 318.66 million tons, both of which would be down on the month. According to reports, Russia could announce grain export quotas for the first half of 2021 later this month. SovEcon sees 2020/21 grain exports for Russia at 49.1 million tons, compared to Moscow’s current official estimate of 45 million tons.