Down week for soybeans, corn, wheat
Soybeans were modestly lower on profit taking and technical selling, with the most active month losing more than $.20 on the week. Most near-term forecasts have moderate to heavy rainfall in parts of South America, with lighter totals in other areas. The longer-term outlooks remain uncertain because of the La Nina pattern. Safras e Mercado estimates Brazil’s crop at 133.517 million tons of soybeans, adding 56.5% of the crop has already been sold, compared to 37.8% a year ago and 34.5% on average, and that there’s only 1.2 million tons of the 2019/20 crop remaining to trade. Brazil’s government since soybean imports since the start of the year are 625,000 tons, mostly from Paraguay, but with 30,500 tons coming from the U.S. IHS Markit pegs Brazil’s crop at 132.5 million tons, down 1 million from their last guess. U.S. export sales have hit marketing year lows for four consecutive weeks, with no announced soybean sales from the USDA since November 9th. Soybean meal was lower and bean oil was higher on the adjustment of product spreads driven by global vegetable oil demand. DTN says three feed mills from South Korea bought a total of 256,000 tons of bean meal, mostly from South America, with 71,000 tons optional origin.
Corn was modestly lower on fund and technical selling, with the most active months seeing double digit weekly losses. Corn is also watching planting and development weather in Argentina and Brazil. Planting in Argentina remains slower than normal and the critical crop for Brazil is the second crop, which won’t be planted until after beans are harvested next spring. Friday morning, Mexico bought 182,020 tons of 2020/21 U.S. corn, with sales well ahead of last marketing year’s pace. China is the biggest buyer ahead of Mexico and Japan. DTN says a feed mill from South Korea bought 68,000 tons of optional origin corn. Ethanol futures were steady to higher. The Renewable Fuels Association says October ethanol exports were 126.5 million tons, up 64% from September, with DDGS exports of 951,500 tons, down 18%.
The wheat complex was lower on fund and technical selling as the complex ended the week sharply lower at the three U.S. exchanges. Some U.S. winter wheat growing areas are expected to see another round of precipitation, benefiting the crop as it heads into dormancy. Still, conditions in spring will be even more critical. The trade is also watching conditions in the European Union, Russia, and Ukraine, in addition to harvest activity in Australia. France’s winter crop is reportedly rated 96% good to excellent, compared to 77% a year ago. There’s been talk that China has purchased U.S. wheat recently, but nothing has surfaced. The global supply outlook is bearish with new USDA supply, demand, and production numbers out on Thursday the 10th at Noon Eastern/11 Central. Most analysts are expecting only minor adjustments to the U.S. and global carryover numbers.