Soybeans, corn lower, watching South America

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Soybeans, corn lower, watching South America

Soybeans were sharply lower on commercial and technical selling. Parts of Brazil got rain over the weekend with more on the way and while that precipitation did miss some of their key growing areas, coverage could be better this week. AgRural says 87% of Brazil’s crop is planted, compared to 81% a week ago and 87% this time last year. Safras e Mercado pegs the crop at 133.5 million tons. 30,500 tons of U.S. beans are scheduled to arrive in Brazil on Friday, a rarity necessitated by Brazil’s fast pace of sales. The dry parts of Argentina generally remained dry, but with cooler temperatures, and some producers continue to hold onto beans because of export tariffs. Weekly export inspections were more than what’s needed to meet USDA projections for the marketing year, with China and Thailand leading the way. Stateside, the trade is waiting for the next set of supply and demand estimates, with an eye on January’s final 2020 production totals. Soybean meal and oil followed beans lower. Bean oil picked up additional pressure heading into the session on a lower move in palm oil.

Corn was lower on commercial and technical selling. Corn is also watching weather in South America, with most forecasts calling for mixed rain coverage into mid-month. The long-range issue for South America is Brazil’s second crop, which is planted after soybeans are harvested. Safras e Mercado has Brazil’s first crop at 19 million tons, compared to the last guess of 22.8 million, with the total crop at 112.9 million tons. Unknown destinations bought 344,000 tons of 2020/21 U.S. corn in two purchases: one for 140,000 tons and 204,000 tons. Nearing the end of the first quarter of the marketing year, export inspections were neutral, the top destinations were China and Mexico, but the overall pace remains ahead of 2019/20. Sorghum inspections were bullish, with China the biggest single destination. Ethanol futures were unchanged.

The wheat complex was sharply lower on commercial and technical selling. The global supply fundamentals remain bearish with new USDA projections out December 10th. Dry weather in parts of the southern U.S. Plains is a continued concern, but that’s largely on the back burner because of wheat’s global nature. The USDA says 46% of the winter wheat crop is in good to excellent condition, up 3% on the week, but down 6% from last year, with 92% of the crop emerged, compared to the five-year average of 91%. Australia’s ABARE will put out a new production estimate this week, with most analysts projecting a number above the USDA’s November guess and a solid year to year increase thanks to much better weather. The trade is also watching weather in the Black Sea as that crop heads to dormancy. There’s talk Russia’s Ag Ministry could raise the February 15th to June 30th wheat quota this week, contrary to expectations. A survey by Great Britain’s Agriculture and Horticulture Development Board has a 28.3% increase in winter wheat planted area. Halfway into the marketing year, export inspections were up on the week and the year but have slowed down enough that 2020/21 is only barely ahead of 2019/20. The main destinations for the week were the Philippines and Mexico. DTN says Egypt bought 175,000 tons of wheat from Russia and a South Korean flour miller picked up 47,630 tons of wheat from Australia.