Wheat up, corn and soybeans mixed ahead of WASDE

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Wheat up, corn and soybeans mixed ahead of WASDE

Soybeans were mostly lower on spread trade and profit taking, with most months peeling back from the recent highs. That mostly lower finish came despite beans continuing to watch weather concerns in Argentina and southern Brazil. More yield loss is likely in that part of South America, while rain in central and northern Brazil is delaying early harvest activity and impacting quality. There are also uncertainties about interior transportation infrastructure being sufficient to get those beans to port. Unknown destinations and China both bought new crop U.S. soybeans, 332,000 and 132,000 tons, respectively. That was the third business day in a row with an announced sale of U.S. beans for a running total of 1.266 million tons, including 501,000 tons of old crop and 765,000 tons of new crop. The 2022/23 marketing year for soybeans starts September 1st. Soybean meal was up modestly, hitting new highs, and bean oil was down, adjusting product spreads. Bean oil picked up additional pressure from a drop in crude oil and global vegetable oils, including Malaysian palm oil. Statistics Canada says that nation’s canola supply at the end of 2021 was 7.561 million tons, below pre-report estimates and a drop of 43.1% on the year, while soybean stocks were 3.285 million tons, 6.4% lower.

Corn was mixed, adjusting spreads, with December rallying late to establish another contract high. Corn was watching weather in South America, with new USDA production estimates out Wednesday and CONAB’s update for Brazil scheduled for Thursday. The USDA will likely lower row crop projections for Argentina and Brazil, the question is by how much. The report is out at Noon Eastern/11 Central. The trade is also watching U.S. acreage signals ahead of 2022 planting. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are also out Wednesday. The Renewable Fuels Association says December ethanol exports were 117.9 million gallons, a drop of 21% from November, with a 2021 total of 1.24 billion gallons, the fifth highest on record. DDGS exports for December were 933,882 tons, down 8% on the month, with last year’s total at 11.6 million tons, the third largest ever. Ethanol futures were unchanged. Statistics Canada says corn stocks on December 31st, 2021 were 11.53 million tons, 4.1% above the previous year due to a larger crop and increased imports, primarily for feed use in western Canada.

The wheat complex was higher on commercial and technical buying. The trade continues to monitor the Black Sea region, with conflict between Russia and Ukraine continuing to be a possibility. Additionally, most forecasts for the southern U.S. Plains into northern and northwestern areas generally remain dry, potentially limiting winter wheat yields. Some winter wheat growing areas of the eastern Midwest are experiencing warmer temperatures, melting snow, and pushing soil moisture levels higher. Statistics Canada says wheat stocks at the end of 2021 were smaller than expected, helping Minneapolis outgain Chicago and Kansas City. Canada’s wheat supply on December 31st, 2021 was 15.564 million tons, down 38% from the end of 2020, including 13.47 million tons of spring wheat, a decline of 33.6%. Ahead of the report, analysts were expecting the supply to be 17.3 million tons. Canada’s 2021 spring wheat crop was hit hard by drought in the Prairies, which also impacted U.S. spring wheat and could be a factor in 2022 planting for both nations.