Bullishness continues for soybeans, corn, wheat
Soybeans were sharply higher on commercial and technical buying, making new highs, but still closing well below the session highs. Parts of Brazil have received good rain recently, but other areas of Brazil and most of Argentina remain drier than normal. Very early harvest activity is being reported in parts of Brazil, but that’s extremely uncommon as most of the beans in South America saw planting delays because of dry weather. Demand continues to be strong, with the USDA reporting a big crush for November. Contracts are technically overbought, but with the fundamentals this bullish, that was a non-factor Tuesday. The USDA’s next set of supply and demand numbers is out January 12th. Soybean meal and oil were also supported by commercial buying, monitoring a strike by grain inspectors in Argentina and the loading delays. Argentina is the world’s biggest exporter of soybean products most years. Oil picked up additional support from a sharply higher move in crude oil.
Corn was higher on commercial and technical buying, with the most active months in striking distance of $5. Corn is also watching weather in South America, especially the lower than normal rainfall totals in Argentina. U.S. corn continues to have a significant price advantage over competing exporters, which should continue for the next few months. There’s been more talk of new demand from China, with the weekly export sales numbers scheduled for Thursday. Argentina has suspended exports through February and the planting of Brazil’s second crop will be delayed by the soybean planting delays earlier in the season. The USDA’s final 2020 corn and soybean production totals are out January 12th, along with quarterly grain stocks. Ethanol futures were steady. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.
The wheat complex was higher on commercial and technical buying, with spot months at the three U.S. exchanges notching multi-year highs. U.S. winter wheat conditions are mixed, with dry weather an issue in some key growing areas. The USDA says good to excellent ratings made month to month improvements in Kansas and Nebraska but fell in some of the other reporting states. The USDA’s next set of state crop stories is out later this month and the weekly crop numbers resume in April. The USDA’s winter wheat planted area numbers are out January 12th. World prices moved higher and the dollar was lower heading into the U.S. session. APK-Inform says Ukraine’s wheat export prices have hit more than six-year highs sparked by a sharply higher move in Russia on good demand and expectations for smaller crops because of dry weather during planting in key parts of the Black Sea region. The trade is also watching harvest activity in Australia.