Solid end to a short week for grains, oilseeds

Market News

Solid end to a short week for grains, oilseeds

Soybeans were modestly higher on short covering and technical buying, closing the short week with solid gains. The big driver for beans continues to be strong end user demand for soybeans and soybean products, along with solid crush margins. Soybean meal was mostly higher and bean oil was up on commercial activity. Soybean export sales were a marketing year low, China was the biggest buyer, but there was a cancellation by unknown destinations. Soybean meal and oil export sales were up sharply on the week, with a new marketing year high for bean oil. Markets are closed Friday for Christmas, reopening Sunday night. The trade is also watching weather in South America, waiting to see the full emergence of La Nina. Stateside, the next major report for soybeans is the USDA’s final 2021 U.S. production totals out January 12th.

Corn was modestly higher on short covering and technical buying, cementing a higher weekly finish. There’s early talk that dry weather in southern Brazil and Argentina will cut yields, with crops in the pollination phase. A lot of the focus for South America will be on Brazil’s second crop, planted after soybeans, the largest of their three crops, and the source of most of their exports. CONAB’s updated outlook for Brazil is scheduled for January 11th and the USDA’s next set of estimates for South America is out January 12th in the monthly supply and demand report. Export sales continue to be slow, with last week’s sales dropping 50% from the previous week, Japan and Mexico led the way, but ethanol demand remains solid, limiting some of that impact. Ethanol futures were unchanged.

The wheat complex was mostly higher, with Kansas City and Minneapolis up and Chicago fractionally mixed. Drought continues to be a concern in parts of the Plains and there’s cold weather in the forecast for the Black Sea region, with both potentially stressing winter wheat crops. Still, it’s less about how crops go into dormancy and more about how they emerge. The USDA’s U.S. winter wheat planted area totals are out January 12th. The most active months at the three U.S. exchanges posted week-to-week gains. The trade is waiting to see if Ukraine restricts wheat exports. That’s been a point of uncertainty this week but might be moot as flaring tensions between Ukraine and Russia could disrupt export business anyway. U.S. sales were below the previous week, with only Japan and the Philippines picking up more than 100,000 tons. Germany’s state statistics group says producers planted slightly more winter wheat this year than last year.