Soybeans buy back previous session’s losses
Soybeans were higher on commercial and technical buying, recovering Thursday’s losses, making more new highs, and finishing the week sharply higher. China bought 204,000 tons of 2020/21 U.S. beans Friday morning, their first announced purchase since November 6th, 2020. Unknown destinations have purchased U.S. beans during that period, including old and new crop on Thursday, January 7th, and at least some of that will be switched to China for delivery. The trade continues to watch weather in Argentina and Brazil, with the Buenos Aires Grain Exchange reporting 94% of Argentina’s crop is planted and Brazil’s crop about a month away from widespread harvest activity. The USDA’s next production update for South America is out next Tuesday. Ahead of the that set of numbers, many analysts expect the department to lower production projections because of persistent weather issues during planting and development.
Corn was mixed on commercial spread adjustments but ended the week with solid gains in the most active months. Corn is also watching South America, with a better chance of rain in some areas over the next several days. Still, damage has been done, with only 15% of Argentina’s crop rated good to excellent, and the planting of Brazil’s critical second corn crop will be delayed because of the soybean planting delays earlier in the season. For now, U.S. corn continues to hold a price advantage over competing exporters. Still, corn was unable to close above the $5 dollar mark breached on Wednesday. Corn is waiting to see if Buenos Aires makes any changes to Argentina’s suspension of the corn export registry following a meet with domestic grain groups. DTN says the Rosario Grain Exchange estimates Argentina’s domestic supply at 10 million tons. The USDA’s final 2020 U.S. corn and soybean production totals and quarterly grain stocks numbers are out on the 12th. Ethanol futures were modestly higher.
The wheat complex was mixed, with Chicago and Kansas City down on follow through selling and Minneapolis up on short covering. Most forecasts have rain in parts of the southern Plains, but conditions remain mostly dry across the region. Additionally, there are continued concerns about conditions in the U.S. soft red winter areas, Russia, and Ukraine. The trade is also watching harvest activity in Australia. The Buenos Aires Grain Exchange estimates Argentina’s wheat crop at 17 million tons, compared to their last guess of 16.8 million and the USDA’s most recent projection of 18 million tons. According to reports, soft wheat exports by France to non-European Union nations during December were 797,000 tons, down from November following a slowdown in demand from China. New USDA supply and demand estimates are out on the 12th, along with winter wheat planted area numbers, at Noon Eastern/11 Central. For the week, Chicago and Kansas City were lower and Minneapolis was higher.