Market News

Soybeans up on new exports, slow harvest

Soybeans were modestly higher on commercial and technical buying, with the most active contracts closing in the middle of the day’s trading range. Unknown destinations bought 148,000 tons of 2018/19 U.S. beans, the second day in a row with a new sale. It might be China, it might not be China, and in any event, no public progress has been made in trade talks ahead of the G20 in Argentina. According to wire reports, Beijing is actively searching for alternatives to U.S. goods, primarily in neighboring nations. Harvest is nearly 90% complete, slower than average because of recent weather with the potential for further damage and quality declines. Soybean meal and oil were up modestly, following beans. The trade is also monitoring the planting pace in Brazil, expecting another record crop with an El Nino pattern expected to emerge later this year. Most private estimates project Brazil at around 120,000 tons million tons and many analysts expect a significant improvement in Argentina following last year’s drought-stricken crop.

Corn was narrowly mixed on spread adjustments, with nearby contracts firm and deferred months steady to weak. This year’s U.S. corn harvest is 84% complete, compared to the five-year average of 87%, with half of the top 18 states behind their usual pace. Mexico bought 212,000 tons of 2018/19 U.S. corn. The USDA’s weekly export sales report is pushed back until Friday. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Thursday. The U.S. industry is waiting for more updates on the implementation of year-round E15 use, along with potential changes to biofuel waiver policy under acting EPA Administrator Wheeler. The trade is also monitoring the planting pace in South America.

The wheat complex was modestly lower on fund and technical selling, in low trade volume. Winter wheat planting is behind the usual pace, with the possibility some acres just won’t get planted because of a combination of cold weather and the slow soybean harvest. The USDA’s condition rating did improve over the past week and the fundamental outlook remains bearish, with the next set of supply and demand estimates out December 10^th. Further losses are probable in Australia and the USDA might lower Russia’s export estimate, but those could be offset increases for other nations. In sell-buy-sell trade, Japan bought 15,500 tons of U.S. feed wheat. Japan also has an open tender for food wheat from the U.S., Australia, and/or Canada. Iraq is expected to send a delegation to Moscow to discuss adding Russian wheat to its list of approved sources, along with the U.S., Australia, and Canada.