Market News

Soybeans, corn weak on rain chances in South America

 

Soybeans were fractionally lower on speculative and technical selling, with the most active contracts dropping more than $.20 on the week. Forecasts have more light to moderate rain in dry parts of South America, pushing contracts towards near two month lows. Longer term outlooks remain a little less certain and a mostly drier pattern would be consistent with La Nina conditions. China and unknown destinations bought 2017/18 U.S. beans, 257,000 tons and 126,000 tons, respectively, but this marketing year’s export pace continues to trail last year. Soybean meal and oil followed beans lower. The NOPA says member firms crushed 163.546 million bushels of beans in November, up 2% on the year, larger than expected, and a new monthly record. Informa Economics estimates 2017 U.S. soybean production at 4.45 billion bushels with an average yield of 49.7 bushels per acre, both a little more than current USDA expectations, and projects 2018 U.S. soybean planted area at a record 91.4 million acres.

Corn was modestly lower on speculative and technical selling, unable to follow through on early gains. Corn’s also watching weather in South America, expecting generally non-threatening late planting and development conditions. It’s roughly the equivalent of mid-June for crops in the southern hemisphere. The most active contracts lost about $.05 on the week. New official USDA projections for South American production, along with the final 2017 domestic corn and bean totals, are out in January. Costa Rica bought 134,503 tons of 2017/18 U.S. corn Friday morning. Ethanol futures were lower. Informa Economics sees 2017 U.S. corn production at 14.676 billion bushels with an average yield of 176.6 bushels per acre, above current USDA estimates, with 2018 U.S. acreage at 89.675 million.

The wheat complex was mixed. Chicago was nearly unchanged, consolidating, and Kansas City was down on supply pressure, while Minneapolis was up on an oversold bounce and commercial buying. Unknown destinations bought 130,000 tons of 2017/18 U.S. soft red winter, but the overall fundamental outlook remains bearish. Tunisia bought 100,000 tons of soft wheat and 50,000 tons of durum, both optional origin. Persistent dry conditions in parts of the Southern U.S. Plains likely won’t be viewed as an issue until the crop emerges from dormancy. Informa Economics projects 2018 U.S. winter wheat acreage at 31.093 million acres. Week to week, March Chicago and Kansas City were down fractionally, while March Minneapolis posted a more than $.08 gain.