Outside markets, weather pressure grains and oilseeds
Soybeans were sharply lower on fund and technical selling. Forecasts generally have more rain headed for dry parts of South America over the next week. There’s still a long way to go until the crop is fully planted, much less harvested, but the recent precipitation has helped planting accelerate after early delays. That should leave the U.S. as the world’s best source of beans into early 2021. There are reports that a cargo of U.S. soybeans is on the way to Brazil. Brazil recently lifted its import tariff on several commodities from outside of the Mercosur trading bloc to limit domestic price inflation. Most commodities also saw spillover from a drop in the broader market, with the major U.S. stock indices, precious metals, and energies dropping on concerns about COVID-19 and the dollar index rising. Soybean meal and oil followed beans lower. Ahead of the open, unknown destinations bought 120,000 tons of U.S. beans and Egypt picked up 110,000 tons, both for 2020/21 delivery. The weekly USDA numbers are out Thursday morning.
Corn was lower on fund and technical selling, along with the losses in the broader market. Corn is also watching weather in Argentina and Brazil, in addition to harvest activity in the U.S. Stateside, some areas are seeing harvest delays, but most of the Midwest is expected to see a better weather pattern later this week. For South America, the critical crops are Argentina and Brazil’s second crop. Corn is also waiting to see if China decides to raise tariff rate quotas on corn. The U.S. Energy Information Administration says ethanol production hit a seven-week high at an average of 941,000 barrels a day, while stocks dipped to a near four year low at 19.601 million barrels. Ethanol futures were lower. Ukraine’s economic ministry says 56% of corn planted area has been harvested, with a running total of 14.5 million tons. Ukraine’s corn prices shot higher this week, which could help U.S. sales. South Korea bought 207,000 tons of 2020/21 optional origin corn, all or part of which will come from the U.S.
The wheat complex was lower on fund and technical selling, in addition to the higher move in the dollar. Dry parts of the U.S. Plains, the Black Sea region, and Argentina are all expected to see more precipitation. Portions of Australia are expected to receive rain ahead of harvest activity, potentially lowering crop quality. Ukraine’s economic ministry says the spring wheat harvest is over. New USDA supply, demand, and production estimates are out November 10th, including updated global production projections. DTN says South Korea purchased 77,900 tons of U.S. milling wheat, along with 27,900 tons from Canada, and Japan bought 16,225 tons of feed wheat from an unknown origin. Customs data from the European Union and Great Britain show marketing year to date soft wheat exports at 6.44 million tons, down 30% on the year.