Market News

Soybeans down, watching South America

 

Soybeans were lower on speculative and technical selling. Most near term forecasts have rain in central Brazil, with lighter amounts in southern Brazil and Argentina. Longer term forecasts are a little drier, in-line with the current La Nina pattern, and it is roughly mid-June for crops in the southern hemisphere. Parts of Argentina are starting to show signs of drought, which could reduce planted area, with planting less than 2/3 of the expected total. The Rosario Grain Exchange projects Argentina’s 2017/18 crop at 54.5 million tons. Weekly export numbers were bearish. Soybean meal and oil were lower, following beans, with pressure from the fundamental implications of a big South American crop. NOPA soybean crush numbers are out Friday.

Corn was fractionally lower on profit taking and technical selling, unable to follow through on its early bounce. Supplies are ample and the weekly export numbers were bearish, and while buying interest near the recent contract lows did provide some support, it wasn’t enough to pull corn to a positive close. Corn is also watching conditions in South America, especially drought or near drought conditions in parts of Argentina and less than half of the crop planted. The Rosario Grain Exchange estimates 2017/18 corn production in Argentina at 41.5 million tons. Ethanol futures were lower. Final 2017 production numbers and quarterly stocks data are out in January.

The wheat complex was modestly higher on commercial and technical buying, managing to hold on to the day’s gains. Wheat’s also wrestling with a bearish supply outlook while finding support near the recent lows. Weekly export sales were good, but shipments remain slow. Drought conditions in the U.S. Plains probably won’t be considered an issue until the crop comes out of dormancy. The USDA’s first official winter wheat acreage number is out in January. Japan bought 95,366 tons of U.S. food wheat, along with 27,330 tons from Australia and 25,000 tons from Canada. Tunisia is tendering for 100,000 tons of durum and 92,000 tons of soft wheat, while Jordan is tendering for 100,000 tons of milling wheat. The Rosario Grain Exchange estimates Argentina’s 2017/18 wheat crop at 17.3 million tons.