Market News
Demand pulls nearby soybeans above $12
Soybeans were higher on commercial and technical buying, with most contracts closing above the $12 mark. Most near-term forecasts have better rain coverage in Brazil than in Argentina, with longer term uncertainties because of La Nina. Export numbers were good and the ongoing grain worker strike in Argentina could drive more sales to the U.S. The USDA also reported new crop soybean sales to China and Mexico, confirming some of the recent rumors. The USDA hasn’t announced a sale of U.S. soybeans since early November, but the actual weekly numbers are showing consistent interest. The next set of export sales numbers will be out Wednesday, December 23rd, with the USDA closed for Christmas Eve. Soybean meal and oil were supported by commercial demand and that strike in Argentina. Il picked up additional support from world vegetable oil strength after Russia added a 15% tariff to sunflower oil exports.
Corn was higher on commercial and technical buying. Export sales were nearly 2 million tons and the numbers for this marketing year continue to run well ahead of last marketing year’s pace. China’s played a big role in that, but a lot of those sales remain unshipped and could still be canceled. Corn is also watching conditions in South America. The key crop to watch for South America will be Brazil’s second crop, planted after soybeans are harvested. A possible bearish develop is talks between China and Brazil about increasing corn trade, but that wouldn’t be able to begin until after the second corn crop is harvested. Ethanol futures were higher. Strategie Grains estimates the 2020/21 corn crop for the European Union at 61.8 million tons, compared to the 2019/20 total of 64.5 million and the 2021/22 projection of 63.5 million tons. The USDA’s next set of supply and demand estimates is out January 12th, along with quarterly stocks and the final 2020 corn and soybean production totals.
The wheat complex was higher on commercial and technical buying. Weekly export numbers were neutral but sales are expected to improve with Russia’s new export tariff which runs from February 15th to June 30th which will likely trim a few million tons off of sales projections. In response to the export tariff from Russia, Turkey will reportedly lower their import tariff. The USDA’s 2021 winter wheat planted area numbers are out January 12th. Expanding drought conditions are a concern in U.S. winter wheat growing areas and in parts of Russia and Ukraine. Ukraine’s economic ministry says planted area for winter wheat was down 4.7% on the year due to dry conditions. The trade is also monitoring conditions in the European Union and harvest activity in Australia. Strategie Grains pegs the 2020/21 soft wheat crop for the E.U. at 118.9 million tons, compared to 131.0 million for 2019/20 and the 2021/22 outlook of 129.6 million tons. DTN says Tunisia bought 117,000 tons of soft wheat and 100,000 tons of durum, while Thailand purchased 77,000 tons of feed wheat, all from unknown origins.
