More gains for corn, soybeans, and wheat
Soybeans were higher on speculative and technical buying. Demand remains solid with unknown destinations buying 132,000 tons of 2020/21 U.S. beans ahead of the open. That could end up being switched to China when it’s time for delivery. Some rain is in the forecast for parts of South America but planting has already been delayed by at least a couple of weeks, likely extending China’s reliance on U.S. beans into early 2021. Brazil might even end up buying U.S. beans to fill domestic crush needs. Beans are also watching U.S. harvest activity, with the potential for some key growing areas to wrap up before November. IHS Markit sees 2021 U.S. soybean acreage at 89.2 million tons, which would be up more than 6 million on the year. Soybean meal was mixed, consolidating, and bean oil was higher on demand expectations and global prices.
Corn was higher on speculative and technical buying, with December near its highest price in a year. Most forecasts have harvest delaying rain and snow in parts of the Midwest over the next few days. Still, the pace is ahead of average and given the stage of development for most of the crop, damage should be minimal. South American weather has also pushed back the start of corn planting, including Brazil’s critical second crop, the source of most of their exports, which is planted after the soybean harvest. Having suspended import tariffs from outside of the Mercosur trading block, Brazil might need to import U.S. corn to limit domestic price inflation and meet livestock feed needs. Brazil’s prices are high enough to encourage planting, while also discouraging exports. Ethanol futures were steady. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. IHS Markit projects 2021 U.S. planted area for corn at 91.97 million acres, a million more than in 2020, if realized.
The wheat complex was higher on speculative and technical buying, including a one year high for December Kansas City. Most of Russia and large sections of the U.S. Plains are expected to remain drier than normal. Russia’s coming off of a large 2020 crop, but demand has been strong enough to push their domestic prices sharply higher and Moscow could institute export limits. Stateside, the USDA’s first winter wheat crop condition rating of the season is expected to be out next week. There are also concerns about dry weather in Argentina. Domestic demand is also a supportive factor. The USDA could lower the global production estimate in the next set of supply and demand numbers November 10th, but losses in some nations could be offset by gains in others and the overall world supply outlook should stay bearish. IHS Markit pegs 2021 U.S. winter wheat planted area at 31.6 million tons, 800,000 more than their last guess and up 1.2 million from 2020. DTN says South Korea bought a total of 126,000 tons of feed wheat, while Thailand is tendering for 192,000 tons of feed wheat and Algeria is in the market for 50,000 tons of milling wheat. Egypt says it will not charge exporters for dead bugs found in imported wheat. Egypt is the world’s biggest buyer of wheat.