Market News
Corn, wheat manage modest gains
Soybeans were lower on commercial and technical selling. Contracts followed the lead of soybean products, while keeping an eye on forecasts for rain in central Brazil. Still, southern Brazil and Argentina will likely remain mostly dry over the next couple of weeks, in-line with La Nina conditions. Soybean products were down on commercial selling, but bean meal did manage to recover some of the early losses, finishing closer to the day’s highs. Bean oil on the other hand reversed course and ignored mostly higher global vegetable oil trade ahead of the U.S. session. After the close, the EPA raised proposed blending volume requirements for biofuels, including for biodiesel. China’s General Administration of Customs says November soybean imports were 8.57 million tons, a jump of 68% from October due to increased shipments from the U.S. Year to date purchases are 87.65 million tons, 5.5% behind 2020. Ahead of the open, unknown destinations bought 123,000 tons of 2021/22 U.S. beans, bringing the total over the last four business days to 669,100 tons.
Corn was modestly higher on commercial and technical buying, bouncing back from some early losses. Ethanol demand remains solid and traders were expecting an EPA announcement on blending mandates. After the close, the EPA raised proposed blending volume requirements, while also taking other measures to boost the U.S. biofuels industry, including aid for producers impacted by the pandemic. That said – some in the industry are concerned about the EPA’s approach to conventional biofuels, including ethanol. That strong ethanol demand has helped offset some of the potential impact from slower export demand, including China largely turning to Ukraine. Corn is also keeping an eye on conditions in Argentina and Brazil. The big issue for corn will be the performance of Brazil’s second crop, which is planted after soybeans are harvested. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. The Renewable Fuels Association says October ethanol exports were 104.74 million gallons, up 38% from September, with Canada topping the list. DDGS exports were 1.06 million tons, a gain of 24% on the month, with Mexico leading the way.
The wheat complex finished the session modestly higher on commercial and technical buying. Contracts are overbought, but there is support from concerns about dry weather in the southern U.S. Plains and excessively wet conditions in portions of the eastern Midwest and Australia. Additionally, the trade is monitoring political tensions between two of the world’s biggest wheat exporters: Russia and Ukraine. U.S. and global supplies remain at more than 10-year lows, with new supply and demand estimates out Thursday. The USDA’s attaché in Taiwan says that nation is lowering its import tariff on wheat from 6.5% to 0% through the end of March 2022 to limit consumer price inflation.
