Wheat supported by weather concerns, condition rating

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Wheat supported by weather concerns, condition rating

Soybeans were mostly modestly higher on commercial spread trade. Most forecasts have near-term rain in parts of Argentina and Brazil, but it could miss some of the region. AgRural says 81% of Brazil’s crop is planted and estimates production at a record 132.2 million tons, above most major projections. Planting has been delayed enough that global reliance, especially Chinese reliance, on U.S. beans should continue into next year. Stateside, while harvest has officially wrapped up, there are still some acres left to be collected. Export demand has slowed down for U.S. beans after the recent spike in price, but 2020/21 sales and inspections remain well ahead of the respective 2019/20 paces. Soybean meal was higher and bean oil was lower on product spread adjustments.

Corn was mostly modestly higher on commercial spread adjustments. Corn is also watching weather in South America, which includes hot temperatures along with only scattered rain. The planting delays in South America have also been an issue for corn, including Brazil’s second corn crop, which is planted after soybeans are harvested. The USDA says the 2020 U.S. corn harvest is officially over, but there are still some key growing areas that have yet to fully complete activity. The USDA’s next production estimate is out December 10th with the official total scheduled for January. Solid demand helped most contracts bounce after early losses, with weekly export numbers out Friday, delayed a day by Thanksgiving. Ethanol futures were steady. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday.

The wheat complex was higher on speculative and technical buying. The USDA’s winter wheat rating was down 3% on the week and is 9% below a year ago, with the trade also monitoring dry weather in the Black Sea region. Conditions heading into dormancy don’t always correlate with conditions coming out of dormancy, but some of the yield potential has likely been lost. Harvest activity is underway in Australia, with projections for a good crop and a full return to the export market after a couple of years of drought. Still, while that would help ease some of the potential losses in the U.S., Russia, and Ukraine, Australia wouldn’t be able to fully fill the void. U.S. winter wheat planting has officially wrapped up, but we don’t really know yet how many acres were actually sown, with weather an issue for mostly hard red winter wheat, but also some soft red winter growing areas. DTN says Japan issued a sell-buy-sell tender for 80,000 tons of feed wheat, while South Korea is in the market for 80,600 tons of U.S. milling wheat.