Wheat pulls corn higher

Market News

Wheat pulls corn higher

Soybeans were modestly lower on profit taking and technical selling. 95% of U.S. beans are harvested and near-term conditions in South America generally look favorable. Long-term, there are concerns about yield loss from the emerging La Nina pattern. That pattern has been confirmed by Australia’s weather bureau and is expected to be relatively short-lived. China reportedly bought 3.3 million tons of soybeans from Brazil last month. The USDA’s weekly sales numbers are out Friday at 8:30 Eastern/7:30 Central. U.S. cash basis levels are solid and domestic demand continues to be strong. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Bean meal had additional pressure from overbought signals, while oil picked up extra support from a higher move in crude oil, helping it shrug off lower palm oil.

Corn was firm to modestly higher on fund and technical buying, along with spillover from a higher move in wheat. 95% of the U.S. crop is harvested and South American conditions are also bearish for corn. Ethanol and domestic demand remain solid, but exports continue to be slower than expected, despite the U.S. price advantage. China has been buying corn from Ukraine, whose ag ministry raised domestic production 2.9 million tons to 40 million tons. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. Markets are closed Thursday for Thanksgiving, reopening Friday morning.

The wheat complex was higher on fund and technical buying, rallying after a mostly lower start to the session. The big driver continues to be the tightening global supply of wheat. Wheat is watching the tail end of winter wheat planting, with the USDA’s condition rating falling 2% on the week. That’s mostly due to drought in parts of the Plains, pushing March Kansas City to a fresh contract high, along with the excessively wet conditions in portions of the eastern Midwest. Conditions are more important when the crop emerges from dormancy, but hard red, soft red, and white winter wheat would all benefit from improved weather. The trade is also watching weather ahead of dormancy in Europe, Russia, and Ukraine, in addition to harvest activity in Argentina and Australia. Heavy rainfall in parts of eastern Australia is leading to quality concerns and lower protein levels with the total grain harvest 25% complete.