Market News
Soybeans, corn mixed, still up solidly on the week
Soybeans were mixed, mostly modestly higher, with strong weekly gains and new contract highs months. Beans consolidated after the week’s strength, continuing to monitor weather in Argentina and Brazil. The Buenos Aires Grain Exchange is projecting higher planted area in Argentina, but with a smaller crop, 46.5 million tons in 2020/21, compared to 49 million in 2019/20, following the dry conditions earlier in the season and the potential for more dry weather because of La Nina. ABIOVE projects 2021 soybean exports for Brazil at 83.5 million tons, compared to the prior guess of 82 million. Stateside, harvest activity could wrap up in some areas very soon. Unknown destinations and China bought 272,150 tons and 132,000 tons of 2020/21 U.S. beans, respectively, and South Korea purchased 30,000 tons of 2020/21 U.S. bean oil. That’s the first announced sale of U.S. soybeans to China since mid-October. Soybean meal was mixed, mostly higher, following the lead of beans, and bean oil was steady to modestly lower in consolidation trade. Meal and oil also notched fresh contract highs this past week.
Corn was mixed, mostly modestly lower, still ending the week in the black. Corn also consolidated, while keeping an eye on South America, as some forecasts call for dry weather in some areas into mid-month. Corn also saw planting delays because of dry weather earlier in the season, which will push Brazil’s second corn crop back as it is planted after soybeans are harvested. The Buenos Aires Grain Exchange says 30.9% of Argentina’s corn crop is planted. The trade is also watching the tail end of harvest activity in the U.S. and Ukraine. 66% of Ukraine’s planted area has been harvested, but that’s deceptive because the world’s fourth biggest exporter of corn lost acres to dry conditions during the growing season. Production estimates range from 26 million to 33 million tons. The USDA’s Foreign Ag Service expects China’s corn imports to hit 22 million tons, well above the official guess of 7 million and China’s tariff rate quota of 7.2 million tons. Unknown destinations picked up 206,900 tons of 2020/21 U.S. corn, which could turn out to be China when it’s time for delivery. Ethanol futures were lower.
The wheat complex was lower on profit taking and technical selling but were able to close firm to higher for the week. Wheat was watching weather in the Black Sea region and southern U.S. Plains, along with early harvest activity in Australia. According to reports, Australian wheat prices in Asia are below Black Sea origin wheat for the first time in four years, partially because of continued dry weather in key portions of Russia. China is reportedly set to ban imports of wheat from Australia as part of a larger trade dispute. There are a few open export tenders, but it remains to be seen just how much of that business will go to the U.S. 2020/21 sales remain ahead of 2019/20, even with a recent slowdown. The USDA’s next set of supply, demand, and production numbers is out on the 10th. Ahead of the report, most analysts aren’t expecting many changes to the U.S. balance sheet, so a lot of attention should fall on the global numbers.
