Soybeans, corn drift lower after USDA numbers
Soybeans were modestly lower on profit taking and technical selling, unable to follow through on the pre-report gains. The USDA did lower U.S. ending stocks, just not as much as expected, with no changes to U.S. exports. The production guess for Argentina was down, but Brazil was unchanged on the month, as was the import guess for China. CONAB sees Brazil’s crop at 134.451 million tons, compared to 134.953 million last month on the dry weather in southern growing areas, but still record large. Export shipments for the marketing year to date are 82.9 million tons, compared to the total commitment of 83.6 million, potentially rising to 85 million next marketing year, which starts in February. U.S. export sales were up on the week, China was the leading buying, but lower than average, and the USDA hasn’t announced a sale of U.S. soybeans in more than a month. The weekly numbers did confirm some of the recent talk of new crop interest, reporting sales to China and unknown destinations, which could turn out to be China when its time for delivery. China’s National Bureau of Statistics says 2020 soybean production was 19.6 million tons, compared to 18.1 million in 2019. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.
Corn was modestly lower on profit taking and technical selling, also not able to hold onto the early gains. U.S. corn ending stocks were steady with no changes to the balance sheet and with Argentina’s crop modestly lower but no changes for Brazil. The USDA did raise the import guess for China. Mexico bought 344,442 tons of 2020/21 U.S. corn ahead of the open, for a two-day running total of 601,513 tons. The USDA’s weekly sales numbers were a little bit bigger than average, with unknown destinations, Mexico, and China each picking up more than 100,000 tons. Sorghum export sales were lower than average. CONAB estimates Brazil’s corn crop at 102.589 million tons, compared to 104.89 million last month on a reduction for the first crop, but still a new record. Brazil’s second crop, the larger of the three and the source of most of their exports, is planted after soybeans are harvested. Brazil’s corn exports are 27.7 million tons, 20% less than this time last year, with CONAB anticipating a total of 34.5 million tons for the marketing year. November’s corn shipments for Brazil were 4.8 million tons, up 19% on the year. China’s National Bureau of Statistics says that nation produced 260.67 million tons, compared to 260.77 million a year ago, despite weather damage prior to the harvest. Ethanol futures were unchanged.
The wheat complex was higher on commercial and technical buying. U.S. and world wheat ending stocks were down on the month, with the next set of estimates out January 12th. For now, the overall fundamental outlook is just about neutral, with reduced production expectations for some nations canceled out by increased outlooks for others, and while the USDA did lower world ending stocks, they are still projected at fairly lofty levels. The trade is monitoring winter crop conditions ahead of widespread dormancy and possible export restrictions by Russia. DTN says Japan is tendering for 80,000 tons of feed wheat and that Jordan bought 60,000 tons of wheat from an unknown origin. Weekly U.S. sales improved from last week and was ahead of the average pace, with China buying a couple of cargoes. China’s National Bureau of Statistics says 2020 wheat production was 134.25 million tons, compared to 133.59 million in 2019.