Market News

New export sales support soybeans, corn

Soybeans were higher on commercial and technical buying. Unknown destinations bought 378,000 tons of U.S. beans and China purchased 198,000 tons. All of the China sale is for delivery this marketing year, while the sale to unknown is split between 246,000 tons of 2016/17 and 132,000 tons of 2017/18. Strong demand for palm and vegetable oils is also a big factor. Soybean meal was higher on commercial buying and a lack of deliveries against the December contract. Bean oil was supported by vegetable oil demand. Statistics Canada has 2016 soybean production at a record 6.463 million tons, up 1.4% from 2015. Canola production is seen at 18.424 million tons, 0.3% higher. Canada’s canola yield was an average of 42.3 bushels per acre, a new all-time high, while harvested acreage was down 6.6%.

Corn was higher on commercial and technical buying. South Korea bought 276,000 tons of 2016/17 U.S. corn and the USDA could raise the export estimate in Friday’s supply and demand update. As of Tuesday morning, there were no deliveries against the December contract. Longer term weather forecasts for Argentina have generally turned drier. In contrast, forecasts for Brazil remain generally conducive for a big crop. It’s also very, very early in the South American growing season. Ethanol futures were higher ahead of the weekly EIA production and stocks data. According to Statistics Canada, 2016 corn production is currently pegged at 13.193 million tons, down 2.7% on the year, with an average yield of 158.7 bushels per acre. That was 3.6% less than in 2015, but more than the five year average of 151.2 bushels per acre.

The wheat complex was mostly lower. The supply side of the market is bearish, but the trade is reluctant to sell off too much further, limiting losses or providing outright support. Drought or near drought conditions in U.S. winter wheat growing areas does not seem to be an issue as the crop heads towards dormancy. Statistics Canada projects 2016 wheat production at 31.729 million tons, up 15% on the year, including a 2.5% increase for spring wheat, to 20.454 million, a 56.6% jump for winter wheat, to 3.513 million tons, and a 44.0% rise for durum, to 7.762 million tons. Average yield is estimated at 53.2 bushels per acre, up 24.3% from 2015, with a 7.3% decline in harvested area.