Wheat extends losses as soybeans, corn close mixed

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Wheat extends losses as soybeans, corn close mixed

Soybeans were mixed on bear spreading. Last week’s export sales were a marketing year low but concerns about South American crops are providing some support. For the exports, China was the biggest buyer last week, but there was a big cancellation by unknown destinations. For weather, most forecasts have more hot, dry weather in Argentina and southern Brazil. Harvest is just getting underway in parts of northern Brazil. The recent reduction in private production projections for Brazil has pushed their prices higher, cutting into their edge in export price. AgRural Thursday lowered its guess by 11.3 million tons to 133.4 million, compared to a record 137.3 million tons a year ago. CONAB’s next estimate for Brazil is out January 11th. The Buenos Aires Grain Exchange says 48% of Argentina’s bean crop is rated good to excellent, compared to 56% a week ago, with 87% planted, compared to 95% on average. The trade is also monitoring soybean product demand signals. Soybean meal and oil export sales were also marketing year lows last week, pressuring contracts Thursday, but the demand outlook continues to be positive for both.

Corn was mixed on bull spreading. Forecasts for Argentina and southern Brazil continue to look warm and dry over the next couple of weeks. The Buenos Aires Grain Exchange says 40% of Argentina’s crop is in good to excellent condition, a week-to-week drop of 18%. The USDA’s next set of numbers for South America is out January 12th, along with the preliminary 2021 U.S. corn and soybean production totals. Export sales were down on the week, just over 250,000 tons, but Mexico did buy 102,000 tons of 2021/22 U.S. corn ahead of the open. Canada was last week’s biggest buyer, followed by Mexico, and there was a significant cancellation by unknown destinations. The Renewable Fuels Association says November ethanol exports were 149.4 million gallons, up 43% from October, mainly to Canada, Brazil, and India. DDGS exports were 1.02 million tons, down 4% on the month, despite record monthly volume to Mexico. The other top buyers were South Korea and Ireland.

The wheat complex was sharply lower on fund and technical selling, along with the higher move in the dollar. Paris milling wheat was down ahead of the U.S. session and Argentina and Australia are expected to produce record crops. Weather continues to be an issue for some U.S. winter wheat growing areas. Drought remains a problem in portions of the Plains, impacting hard red and white winter, while parts of the eastern Midwest are excessively wet, lowering soft red winter condition ratings for some states. There’s also possible freeze damage in some areas due to a lack of snow cover and a cold snap. The USDA’s U.S. winter wheat planted area numbers are out January 12th. The trade is also keeping an eye on overwintering conditions and political tensions in Russia and Ukraine. U.S. export sales were a marketing year low and the 2021/22 pace continues to trail 2020/21 despite Russia’s rising tariff and impending cap on sales. Last week’s big buyer for the U.S. was Italy at just 15,400 tons, 15,000 of which were switched from unknown.