Soybeans, corn lower on rain in parts of Brazil
Soybeans were lower on fund and technical selling. Near-term forecasts have more rain in dry parts of Brazil, but most of this round will miss some of Argentina and longer-term outlooks on the continent are less certain because of the prevailing La Nina pattern. Those planting delays in South America will push back harvest activity, extending global reliance on U.S. beans. There’s more talk of China buying new crop, 2021/22, U.S. beans, but no confirmation. The USDA hasn’t announced a sale of U.S. soybeans in a month, while 2020/21 export sales remain well ahead of the 2019/20 pace. If China is in the market, it’s been sales below 100,000 tons, the USDA threshold for a daily announcement, and 2021/22 sales are reported at 69,000 tons, 9,000 to Japan and 60,000 to unknown destinations. The USDA is expected to tighten the U.S. balance sheet in the next set of WASDE numbers. Soybean meal and oil followed beans lower.
Corn was lower on fund and technical selling. Corn is also watching weather in South America and waiting to see if the rumored export interest from China shows up. Exports have been strong a quarter into the marketing year, largely driven by increased feed demand by China as that nation rebuilds and expands livestock production. U.S. corn continues to have a big price advantage over other competing nations. The USDA’s 2020/21 corn ending stocks estimate is expected to be slightly lower Thursday. The planting pace in South America remains slower than normal, even with the recent precipitation, and the big factor will be delays in planting Brazil’s second crop following the soybean harvest. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. DTN says a South Korean feed company bought 69,000 tons of corn from either the U.S. or South America.
The wheat complex was lower on fund and technical selling. Parts of the southern U.S. Plains are expected to see more precipitation ahead of a drier pattern as the winter crop enters dormancy. The trade is also monitoring conditions in the European Union, Russia, and Ukraine, along with harvest activity in Australia. The global supply outlook continues to be bearish, limiting the potential upside. The USDA’s new supply, demand, and production numbers are out Thursday at Noon Eastern/11 Central, with the export sales numbers also out on the 10th at 8:30 Eastern/7:30 Central. Ahead of the WASDE report, most analysts expect U.S. wheat ending stocks to be steady to lower than in November, but some are calling for at least a slight increase. AgResource pegs Russia’s 2021 wheat crop at 74 million tons, compared to 83 million in 2020.