Market News

Soybeans lead gains on Wednesday

There were large gains in soybean futures on Wednesday.  The gains extended to soybean meal and soybean oil.  DTN says its weather forecast will make harvest a breeze for the next 10 days with the exception of light shower chances in the eastern Midwest. However, January soybeans are now paying more attention to the demand side.  In addition, December soybean meal and soybean oil posted their best gains in several weeks. Some of the soybean oil demand is the result of news that Malaysia will gradually increase its biodiesel mandate for palm oil from 5 percent to 7 percent, beginning in November.

One would have to look back a couple of months or so to find a December corn settlement as high as it was on Wednesday.  That’s in spite of Corn Belt weather being favorable for the harvest of this year’s record 14.48 billion bushel crop.  The market seems to be favoring demand and possibly fewer acres of corn in 2015. Also bullish is that ethanol production increased while inventories of the corn-based renewable fuel actually fell, pointing to increased ethanol exports and a sign of better corn demand.  Exports of corn itself is another bullish sign, so far they’re 141 percent above a year ago.

Chicago wheat posted gains Wednesday with light rain in the forecast for the eastern Midwest, meaning planting delays for winter wheat in Illinois and Missouri.  There are concerns about dry conditions in Australia and in Russia, but not enough to expect significantly boost wheat prices yet. The stronger U.S. dollar also has the effect of making U.S. wheat less competitive on the world market.