Soybeans, corn rebound after Tuesday’s drop
Soybeans were higher on fund and technical buying. Contracts bounced back from Tuesday’s drop, with a more stable tone in the broader market during most of the futures session and spillover from bean meal, which was up on strong commercial demand. Soybean oil ended the session mixed on bear spreading. The USDA says 197 million bushels of soybeans were crushed during October, record large, up 33 million from September and slightly above October 2020’s previous all-time high. Export demand remains slower than expected, especially from China, with Brazil’s prices at a discount to the U.S. The USDA’s weekly export sales numbers are out Thursday morning, with new supply, demand, and production projections set for December 9th. The trade is watching weather in South America ahead of the full emergence of La Nina. Forecasts over the next two weeks are generally dry for parts of Argentina and southern Brazil.
Corn was higher on fund and technical buying. Corn also bought back part of Tuesday’s drop while keeping an eye on conditions in Argentina and Brazil. Deliveries against the December contract continue to be light, reflecting the overall solid demand, even if exports haven’t met expectations. Colombia bought 150,000 tons of 2021/22 U.S. corn. Colombia is the second biggest buyer of U.S. corn in the Western Hemisphere, after Mexico. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 1.035 million barrels a day, a seven-week low and down 44,000 on the week, but up 105,000 on the year. The domestic supply hit a 12-week high at 20.301 million barrels, an increase of 137,000 from the previous week, but a decrease of 939,000 from a year ago. The USDA says 469.312 million bushels of corn were used for ethanol production in October, an increase of 15% on the month and 8% on the year, with DDGS production of 1,948,812 tons, 11% higher than a month ago and 7% above a year ago.
The wheat complex was mixed, with nearby Chicago and Minneapolis contracts up, adjusting spreads. Kansas City was down even as forecasts show expanding drought conditions in parts of the southern U.S. Plains, along with persistently wet conditions in portions of the eastern Midwest. Globally, the trade is also monitoring weather in Europe, Ukraine, and Russia, along with harvest activity in Argentina and Australia. More rain is expected in eastern Australia, further harming the quality of their expected record crop. The European Commission says E.U. soft wheat exports for the marketing year to date are 11.62 million tons, compared to 10.45 million this time last year.