Market News
Grains, oilseeds give back some gains
Soybeans were sharply lower on profit taking and technical selling. Contracts also saw pressure from global vegetable oils and the outside markets. Vegetable oils dropped with concerns about possible increased regulation of the commodity markets by China. Weekly export sales were up sharply, mainly to China and unknown destinations. It’s early, but this marketing year’s pace is behind last marketing year due in part to shipping issues from the Gulf and slower demand from China. That appears to be changing at least somewhat due to strong demand projections for China, Brazil’s tighter supplies, and competitive U.S. prices. China’s General Administration of Customs says September imports from Brazil were 5.936 million tons, down 18% on the year. Soybean oil dropped following global vegetable and crude oils, while bean meal was down on profit taking and the losses in soy complex. The International Grains Council estimates 2021/22 world soybean production at 380 million tons, unchanged from September and up from the 2020/21 total of 366 million tons. The IGC cut trade slightly, raised ending stocks, and left consumption unchanged.
Corn was lower on profit taking and technical selling. Near-term harvest delays are likely in some areas ahead of what should be a warmer, drier pattern. Domestically, farmer selling continues to be slow, despite high cash basis levels. Export sales topped a million tons for the third week in a row, the big buyers were unknown destinations and Mexico, and Mexico bought 130,000 tons of 2021/22 U.S. corn ahead of the open. About a month and a half into the marketing year, 2021/22 sales are just ahead of 2020/21. China remains absent from the U.S. corn market, but U.S. prices have an advantage over other feed components. The trade is also monitoring planting in Argentina and Brazil. Ethanol futures were unchanged. The International Grains Council pegs 2021/22 world corn production at 1.21 billion tons, compared to 1.209 billion last month and 1.126 billion last marketing year. Trade was modestly lower on the month, ending stocks were a little bit higher, and consumption was steady.
The wheat complex was lower on profit taking and technical selling, along with the higher U.S. dollar. Export sales were down on the week as demand remains slow due to relatively high prices, even with a tighter global supply. The leading buyers were Nigeria and Japan, with a cancellation by unknown destinations. 2021/22 sales continue to trail 2020/21. Losses were limited by continued price strength in Russia, along with expectations for a big jump in their export tax, which could eventually send some business to the U.S. Long-term forecasts show more warm, dry weather in the southern Plains, consistent with a La Nina pattern for the region. The International Grains Council projects 2021/22 world wheat production at 781 million tons, compared to 781 million a month ago and 773 million in the previous marketing year. Trade was slightly higher, ending stocks were a bit tighter, and there were no adjustments to consumption. DTN says Japan bought 81,318 tons of food wheat from the U.S. and Canada, and Jordan picked up 60,000 tons of optional origin milling wheat, while Tunisia issued a tender for 100,000 tons of soft wheat. The USDA attaché in Egypt estimates 2021/22 wheat imports at 12.4 million tons, compared to the official projection of 13 million and the 2020/21 total of 12.149 million tons. Ending stocks are expected to be tighter because of stronger demand.
