Soybeans recover some recent losses
Soybeans were higher on commercial and technical buying. Contracts saw an oversold bounce aided by a sharply higher move in soybean oil, watching weather in South America. Coverage has been mixed and there’s uncertainty about long-range forecasts because of La Nina. The Buenos Aires Grain Exchange says 48.2% of Argentina’s soybean crop is planted, up 8.9% on the week, but still slower than average. China’s Ministry of Foreign Affairs says Sinograin will buy 4 million tons of soybeans and 400,000 tons of soybean oil from Argentina in 2021. Producers in Argentina have been holding back beans and the crush is at less than 80% of year ago levels, but those could pick up steam once those purchases begin. Export sales were a marketing year low for the fourth consecutive week and while China was the leading buyer, their purchases reflected the decline in demand after the increase in price. Additionally, the strong sales reported in early 2020/21 were mostly scheduled for delivery around the current time frame. Soybean meal and oil were higher, with oil in the lead on strong global vegetable oil demand. Statistics Canada says 2020 canola production was 18.72 million tons, down 4.5% on the year because of lower harvested area and yields. Soybeans in Canada totaled 6.359 million tons, up 3.5%.
Corn was modestly higher on short covering and technical buying, along with spillover from the bounce in beans. Corn is also watching weather in South America, with near-term outlooks mixed, but generally favorable for planting and development. The Buenos Aires Grain Exchange says 35% of Argentina’s corn crop is planted, up 3.1% on the week, but 13.7% behind this time last year. For Brazil, the big issue will be their second crop, the source of most of their exports, which is planted after the soybean harvest. Weekly export numbers were bearish, with Mexico the top buyer and some interest from China and unknown destinations. The USDA hasn’t announced any new export sales since Monday. China’s National Development and Reform Commission says it is drafting a new law for management of state grain stockpiles. Ethanol futures were steady to lower. Statistics Canada says corn for grain production this year was 13.563 million tons, 1.2% more than last year.
The wheat complex was lower on profit taking and technical selling, giving back part of Wednesday’s gains. Most forecasts have near-term precipitation in some U.S. winter wheat growing areas and Canada says domestic production was a multi-year high. That precipitation in the Plains will help recharge soil moisture, likely aiding winter wheat during dormancy, but the crop isn’t really made until spring. Statistics Canada has that nation’s total wheat crop at 35.183 million tons, the second largest on record and up 7.7% from 2019 thanks to better growing conditions, including a 31% jump for durum and a 62.9% increase in winter wheat, cancelling out a 0.4% decline for the spring wheat crop. The complex is also monitoring conditions in the European Union, Russia, and Ukraine, along with harvest activity in Australia. Weekly export sales were bearish, continuing to slow down halfway into the current marketing year. The Buenos Aires Grain Exchange says 39.9% of Argentina’s wheat crop is harvested, an increase of 9% from the previous week, but 13.7% slower than a year ago. Japan bought 126,961 tons of food wheat from the U.S., Australia, and Canada, and South Korea picked up 31,600 tons of milling wheat from the U.S. and Canada. A Russian commodity group says that nation exported 4.35 million tons of wheat in November, along with 218,000 tons of corn, and projects December wheat exports at 4 million tons.