Market News
Soybean meal strength supports soybeans, corn
Soybeans were higher on commercial and technical buying. Beans went back to following meal, which was up on strong demand from end users, with the December contract closing above $400 per short ton and January closing at the highest level since early July. Soybean oil was down on product spread adjustments and the losses in crude and palm oil. Wednesday’s NOPA member crush numbers for November have an average estimate of 181.9 million bushels, potentially the largest for the month on record. Soybean oil stocks are expected to be above a year ago. The trade is also watching South America, with rain in the near-term forecast for southern Brazil and Argentina ahead of a shift to drier conditions, in-line with La Nina. For now, conditions look good. ABIOVE estimates Brazil’s crop at 144.8 million tons, up 700,000 from their last guess and more than the current USDA projection. The USDA’s next round of expectations is out January 12th.
Corn was higher on commercial and technical buying, along with the strength in bean meal. Corn is also watching conditions in South America, with a drier pattern after rain in Argentina and southern Brazil. The big issue for South American production will be La Nina’s impact on Brazil’s second corn crop, the source of most of their exports. Export demand is slower than expected with increased competition from Ukraine, especially when it comes to business with China. U.S. prices have an advantage over Ukraine, but Ukraine likely has lower shipping costs. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. Coceral sees 2022 corn production for the European Union and United Kingdom at 66.4 million tons, compared to 66.3 million in 2021.
The wheat complex was mixed. Eastern parts of the southern Plains will see some precipitation, but it will likely miss western portions of the region. That rain is expected to move into parts of the eastern Midwest, including areas that were greatly impacted by last week’s tornado. Parts of the northwestern U.S. Plains are also expected to see some rain, benefitting white winter. Harvest conditions in Argentina and Australia generally look good. Coceral projects 2022 soft wheat production for the European Union plus the United Kingdom at 139.8 million tons, compared to 143.2 million for 2021. The firm sees a year-to-year decline for France against a rise for Germany. Algeria has reportedly decided to maintain a quality specification of 1% maximum insect damage limit for wheat, seen as a move to allow greater imports of wheat from Russia. The trade continues to monitor tensions between Russia and Ukraine.
