Corn, soybeans down, watching South America
Soybeans were lower on fund and technical selling. Contracts followed soybean products, while watching development weather in South America. Planting in Brazil is ahead of average at 90.6% as of Friday, with most of the crop in very good shape. The exception is southern Brazil, which is also the area that would be most impacted by the emerging La Nina pattern. That faster than normal planting pace is expected to lead to earlier than usual availability of Brazilian beans on the export market. Stateside, the U.S. soybean harvest has officially wrapped up, with the 2021 production totals out January 12th, 2022. Export inspections topped 2 million tons, with China and Egypt topping the list, but that was still down on the week and the year. Australia’s Bureau of Agricultural and Resource Economics and Sciences has canola production at a record 5.7 million tons. Soybean meal and oil were lower on fund selling and the higher dollar.
Corn was lower on fund and technical selling. Corn is also watching conditions in Argentina and Brazil, with rain in the forecast for parts of Argentina, along with dry weather in most areas for the very tail end of the U.S. harvest. The USDA says the 2021 corn harvest is officially over, with less than 1% of the crop left in the field. Ethanol and feed demand continue to be solid, even if exports are slower than expected. Ethanol futures were unchanged. Export inspections failed to break 800,000 tons, falling below last week and last year. The leading destinations were Mexico and Japan. The USDA could lower export demand and raise ethanol use in the next set of supply and demand numbers December 9th.
The wheat complex was mostly lower, except for December Minneapolis. Contracts are overbought, limiting the support from weather concerns. As winter wheat gets closer to dormancy, the southern U.S. Plains remain drier than normal, while parts of the eastern Midwest are excessively wet. The USDA says winter wheat is fully planted, with planted area totals out January 12th. 92% of the crop has emerged, compared to the five-year average of 91%, with 44% of winter wheat rated good to excellent, unchanged from last week and down 2% from last year. Nearing the end of the first half of 2021/22, it was another bearish week for export inspections, with the overall pace continuing to trail 2020/21. Russian wheat prices moved higher again last week on the tightening global supply, which pushed Moscow’s export tax higher. The main destinations were the Philippines and Mexico. The trade is also monitoring global weather, including dry conditions in parts of Ukraine and wet weather in portions of eastern and southern Australia. Australia’s Bureau of Agricultural and Resource Economics and Sciences estimates production at a record 34.4 million tons, but there’s talk that as much as 25% could be downgraded due to that rain during harvest activity. The Buenos Aires Grain Exchange says 33% of Argentina’s crop is harvested, with production pegged at 20.3 million tons.