Soybeans, corn, wheat up ahead of USDA numbers
Soybeans were higher on commercial and technical buying. Near-term forecasts have more rain in South America, while longer-term outlooks have a return to drier weather. The planting delays in South America should be enough to continue to drive export business to the U.S. into early 2021. Brazil’s supplies are essentially exhausted, but producers in Argentina have resisted selling because of export taxes and poor crush margins. While there’s been more talk about China buying U.S. beans, no new U.S. soybean export sales have been announced in a month and export sales hit a marketing year low every week in November. Even then, demand has been strong enough the USDA is expected to tighten the domestic carryover estimate in Thursday’s supply and demand report. The trade is also waiting to see what adjustments, if any, the department makes to production projections for Argentina and Brazil. Soybean meal and oil were also supported by commercial buying.
Corn was modestly higher on commercial and technical buying. Corn is also watching weather in Argentina and Brazil, with the prevailing La Nina pattern a long-term concern for production. Mexico bought 257,071 tons of 2020/21 U.S. corn, with the USDA’s weekly numbers out Thursday at 8:30 Eastern/7:30 Central. After that, it’s the December WASDE numbers, which are usually a pretty quiet affair, but there could be fireworks this month if the department decides to make significant adjustments to the U.S. balance sheet or South American production numbers. The final 2020 U.S. crop production numbers are out January 12th. Pro Agro has cut its production outlook for Ukraine to 28.3 million tons, compared to 35.8 million last year, with grain exports of 47.1 million tons, compared to 55.6 million a year ago. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 991,000 barrels a day, up 17,000 on the week, but down 81,000 on the year. Stocks climbed to 22.083 million barrels, the largest supply since May and an increase of 843,000 from the previous week and 268,000 from a year ago.
The wheat complex was higher on commercial and technical buying. Most near-term forecasts have rain in the southern U.S. Plains ahead of expanding drought conditions as the crop moves into dormancy. The trade is also monitoring conditions in the eastern Midwest, the European Union, Russia, and Ukraine, along with harvest activity in Australia. France’s Ag Ministry says winter wheat planting was up 12% on the year, short of what some analysts were expecting. Egypt’s government says it wants to produce 10 million tons of wheat in 2021, compared to 9.5 million in 2020. Egypt is the world’s biggest importer of wheat. Grains and oilseeds were also generally getting ready for the new USDA supply, demand, and production numbers out Thursday at Noon Eastern/11 Central. Analysts don’t expect a lot of changes for wheat, but the USDA could adjust the global production estimates following increased governmental projections for Australia and Canada.