Wheat, soybeans able to extend rally

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Wheat, soybeans able to extend rally

Soybeans were modestly higher on commercial and technical buying. Beans are still seeing some follow through support, while watching the U.S. harvest and planting in South America. CONAB raised its outlook for Brazil to just over 142 million tons, an increase of 3.4% from a year ago, but less than the current USDA guess of 144 million tons. Most near-term forecasts have rain in parts of Argentina, but the long-term outlook for South America is uncertain because of La Nina. Weekly export sales numbers are out Friday morning, delayed by Veteran’s Day, and the trade will be watching sales and shipments totals closely. There’s been talk, but no confirmation, of China buying U.S. beans this week. Soybean meal was up on commercial support, while bean oil was mixed, consolidating.

Corn was mostly weak on spread trade and profit taking after a firm start to the session. Corn is watching U.S. harvest activity with delays probable in some areas through next week. Ethanol demand continues to be a supportive factor, but export sales have been slower than expected. CONAB increased its corn production estimate for Brazil, but that will largely depend on how the second crop fares. First crop production is seen at 28.601 million tons, up 15.7% from last year, with the second crop at 86.256 million tons, a jump 42%, and total production at 116.172 million tons, which would be a jump of 34.1%. The second crop’s success is dependent on several factors, including the soybean harvest speed, fertilizer availability, and La Nina. The USDA currently has total production at 118 million tons. Ethanol futures were unchanged.

The wheat complex was higher on commercial and technical buying, with December Chicago and Kansas City notching new highs. The U.S. and world supply tightness continues to be the big bullish factor for wheat. Parts of the eastern Midwest are too wet, while drought is a concern in the U.S. Plains. That includes both the hard red winter crop in the southern Plains and white winter in the northwestern Plains. Paris milling wheat established an all-time high ahead of the U.S. session. The trade is also monitoring conditions ahead of dormancy in Europe, Russia, and Ukraine, along with pre-harvest weather in Argentina and Australia. Reports from Russia say Moscow will set a grain export quota for the second half of their marketing year February 15th, with those limitations running through the end of June. Brazil will allow GMO flour imports from Argentina, but demand and supply are uncertain. DTN says Japan is tendering for 157,987 tons of wheat from the U.S., Canada, and Australia.