More demand support for soybeans, corn

Market News

More demand support for soybeans, corn

Soybeans were higher on commercial and technical buying, establishing contract highs and ending the week with strong gains. Near-term forecasts look mixed for crops in South America, the Argentine grain worker strike was still ongoing during Friday’s session, and world vegetable oils were higher heading into U.S. trade. Those strikes and the weather concerns pushed prices in Argentina to multi-year highs this week. The Buenos Aires Grain Exchange says 67.8% of Argentina’s soybean crop is planted, compared to 75% on average, with 5% in poor to very poor shape. Demand for U.S. soybeans continues to be strong, with the next set of supply and demand estimates out January 12th. The trade will be watching U.S. soybean exports and South American production numbers closely. Soybean meal and oil also notched new highs on the strong demand factors. The big spark on the week for beans was the NOPA monthly crush numbers.

Corn was higher on commercial and technical buying, ending the last full trading week of 2020 with a solid weekly finish. Corn was also watching conditions in South America, expecting good near-term rain in parts of Brazil against drier conditions in Argentina and long-term concerns because of La Nina. The big issue will be the timing for planting Brazil’s second corn crop, which happens after beans are harvested. Corn is also watching loading delays caused by the grain worker strike in Argentina. The Buenos Aires Grain Exchange says 55.4% of Argentina’s corn crop is planted, compared to 61% on average, with 13% rated poor to very poor. The U.S. continues to have a price advantage over other exporters. The USDA’s quarterly grain stocks numbers and the final 2020 corn and soybean production totals are out January 12th. Ethanol futures were steady to firm.

The wheat complex was mixed with bear spreading in Chicago and Kansas City and light technical support for Minneapolis. Week to week, the complex lost ground as any significant upside potential is limited by the bearish global supply fundamentals. Chicago and Kansas City are keeping an eye on longer-term weather outlooks which show expanding drought conditions in winter wheat growing areas. The USDA’s winter wheat planted area estimates are also out January 12th. The trade is also monitoring winter wheat conditions in the European Union, Russia, and Ukraine, along with harvest activity in Australia. The Buenos Aires Grain Exchange says 66% of Argentina’s wheat crop is harvested, in-line with the five-year average. Additionally, wheat is keeping an eye on the export pace out of Russia, with some grain traders reporting problems getting the needed export documents and general concerns about a tariff going into effect February 15th.