Soybean meal leads beans, corn higher
Soybeans were sharply higher on commercial and technical buying, capping off a bullish week. There was also spillover from bean meal, which was up sharply due to strong cash basis levels. Weekly export sales on meal were up solidly on the week and there’s talk Argentina’s soybean meal supplies are very tight. Unknown destinations bought 256,930 tons of 2021/22 U.S. beans Friday morning, while the weekly numbers were neutral. China was the biggest buyer, picking up around three quarters of the weekly total. Still, demand from China has been somewhat slower than expected, with some reports of Beijing buying winter beans from Brazil. Parts of the U.S. will see near-term harvest delays due to rain and snow. The big question in South America continues to be the emergence and impact of the La Nina weather pattern. Soybean oil was mixed adjusting spreads.
Corn was higher on commercial and technical buying, ending the week with a solidly higher move. Corn also saw some spillover from bean meal, while watching those near-term U.S. harvest delays, along with conditions in South America, which generally look favorable. Parts of southern Brazil are dry, but their main crop areas have seen good rainfall recently, and there’s some near-term rain in the forecast for Argentina. China continues to reportedly buy corn from non-U.S. sources, including Ukraine, due to high domestic prices and unknown destinations did cancel on U.S. corn last week. Overall, export sales continue to be a relative disappointment but ethanol demand is solid. Ethanol futures were unchanged. DTN says South Korea bought 65,000 tons of optional origin corn, likely from South America or South Africa.
The wheat complex was mostly higher. Contracts were down early but bounced back on the tight domestic and global supply, except for December Minneapolis, which still ended the week with a strong gain. Dry conditions are a concern in parts of the U.S. Plains and Black Sea region, while wet weather is an issue in portions of the eastern Midwest and Australia. The trade is also watching conditions in Europe and Argentina. Export sales were below average, with the 2021/22 pace continuing to trail 2020/21, despite that global supply tightness and an ever-increasing export tariff from Russia. That export tariff and renewed concerns of conflict with Ukraine could eventually drive some business to the U.S.