Market News

Rain chances in South America pressure soybeans, corn

 

Soybeans were lower on speculative and technical selling. Near term forecasts for southern Brazil and Argentina are still mostly dry to light showers, but some medium term outlooks have a better chance of rain. However, the reliability of longer term forecasts should also be questioned. It’s the equivalent of early June for crops in the southern hemisphere, so there is a long way to go in their growing season. Conditions in central Brazil generally look good. New supply, demand, and international production estimates are out December 12th. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Weekly export numbers on beans were basically neutral.

Corn was modestly lower on speculative and technical selling. It was another slow week for the export numbers and there’s plenty of corn available. The final 2017 U.S. production totals are due in January, along with the as-of-December 1st grain stocks. Corn’s also keeping an eye on planting and development conditions in South America, and the impact of the current La Nina pattern. Ethanol futures were lower, following through on Wednesday. According to the USDA’s agricultural attaché in London, 2016/17 European Union corn production was 61.5 million tons, with 2017/18 projected at 60.5 million. The attaché in Mexico says that nation’s government is establishing inventive plans to alleviate regional oversupplies of corn.

The wheat complex was modestly lower on fund and technical selling, with March Chicago and Kansas City notching new contract lows during the session. Weekly export numbers for wheat were bearish and the fundamental outlook is also bearish. There was also some follow through connected to Stats Canada’s bigger than expected production number this week. Dry conditions in parts of the U.S. Plains probably won’t be an issue until spring. The USDA’s first official winter wheat acreage estimate of the season is out in January. Jordan bought 100,000 tons of optional origin milling wheat and Bangladesh purchased 50,000 tons of milling wheat, which DTN says was probably from the Black Sea region. The USDA’s attaché in London estimates 2017/18 European Union wheat production at 152.5 million tons, up on the year, with quality improvements reported in many member states.