Soybeans up modestly, extending rally

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Soybeans up modestly, extending rally

Soybeans were modestly higher on commercial and technical buying, but closing near the middle of the day’s range. Most forecasts have mixed near-term rainfall for Argentina and Brazil, including a stretch of dry weather in some key growing areas. Planting has advanced, but those early delays will push global, particularly Chinese, reliance on U.S. beans into 2021. Beans are also watching U.S. harvest activity, with the biggest lags currently in southern and southeastern areas impacted by this year’s hurricanes. The trade was also waiting for Thursday’s weekly export sales numbers. Demand has been solid, but sales have trailed off during the recent rally and there is talk of demand rationing. The last U.S. soybean export sale announced by the USDA was on November 9th, the day before the most recent supply and demand report.  Soybean meal was lower and bean oil was higher, adjusting product spreads, with oil picking up additional support from the recent strength in global vegetable oil.

Corn was modestly higher on commercial and technical buying. Corn is also watching weather in South America and demand signals ahead of the export sales report. Stateside, harvest activity should be able to wrap up in some areas this week. The dry weather that impacted soybean planting in South America has also affected corn and the planting of Brazil’s critical second crop doesn’t occur until after the soybean harvest. Unknown destinations bought 140,000 tons of 2020/21 U.S. corn, the second day in a row with an announced sale, for a running total of 335,000 tons. Wednesday’s sale to unknown could turn out to be China when it’s time for delivery. Ukraine’s Ag Ministry says 82% of that nation’s corn crop is harvested, representing 22.7 million tons. Ethanol futures unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 962,000 barrels a day, down 15,000 on the week and 68,000 on the year, with stocks of 20.203 million barrels, an increase of 44,000 from the previous week, but a decrease of 782,000 from last year.

The wheat complex was modestly higher on commercial and technical buying, able to shrug off mixed activity around midday. Drought continues to be a big issue in the Black Sea region, especially Russia, which is now 100% planted, and while there is rain in the forecast for the southern U.S. Plains, it’s expected to be scattered and there are also areas of concern for the soft red winter crop. Winter wheat is about to head into dormancy and while there’s rarely a direction correlation between conditions heading into and out of dormancy, persistent dry conditions will sap yields. New USDA supply, demand, and production estimates are out December 10th. The November numbers did show modest reductions for U.S. and world ending stocks, but the global stocks number remains at record levels, nearly halfway through the marketing year. DTN says Thailand is tendering for 162,000 tons of feed wheat and Taiwan is in the market for 82,220 tons of milling wheat.