Market News

Soybeans firm, eyeing trade, harvest pace

Soybeans were modestly higher on commercial and technical buying, with most months closing towards the lower end of the day’s range. The trade was encouraged by signs there could be at least some advancement in trade talks with China, maybe even before the G20 later this month in Argentina. Wire reports during the session were mixed, indicating low level discussions between the world’s largest economies and no new U.S. tariffs on China for now, but no full formal deal expected between Washington D.C. and Beijing until 2019. Stateside, snow and cold temperatures in some areas are further delaying harvest and leading to increased quality concerns. More snow is expected in parts of the Midwest and Plains this weekend. Soybean meal was steady to weak and bean oil was modestly higher on product spread adjustments. The National Oilseed Processors Association says member firms crushed 172.346 million bushels of soybeans in October 2018, larger than expected and up 5% from October 2017. The trade is continuing to watch planting and development conditions in South America, expecting record production in Brazil and a general benefit from an expected El Nino pattern.

Corn was steady to fractionally higher, mostly unable to follow through on the early modest gains. Corn is also watching late harvest delays, expecting more snow later this week in some areas. A lot of the crop is wet, likely increasing dry down costs for some producers and contributing to mold concerns. Ethanol futures were narrowly mixed. Weekly ethanol numbers were mixed – the U.S. Energy Information Administration says production was down slightly on the week with an average of 1.067 million barrels a day, but stocks were up for the second week in a row. Green Plains closed its plant this week in Virginia and lowered output in other plants. The U.S. industry is waiting for more details on year-round E15 use. China was a big buyer of U.S. ethanol prior to the trade tensions and was also a leading purchaser of U.S. sorghum. Corn is also waiting for the final ratification and implementation of the USMCA, the Trump administration’s version of NAFTA. Ukraine’s Ag Ministry says 2018 grain production could hit a new all-time high of 68 million tons, with exports of 47 million tons, including 27 million tons of corn. According to AgriCensus, Brazil is limiting corn exports, waiting for the expected G20 meeting between President Trump and President Xi and the potential impact on soybean export volume. Development conditions for Brazil’s first crop generally look good, but parts of Argentina will need to dry out after recent heavy rainfall.

The wheat complex was mixed, with Chicago up and Kansas City and Minneapolis down. More winter wheat planting delays are probable and some intended acres just might not get planted at all. Part of that is weather, the snow in the Eastern Cornbelt was what supported Chicago, and part of that is the continued soybean harvest delays. More snow is expected soon in parts of the Plains, slowing planting and hampering emergence, but helping to recharge soil moisture. The trade is also watching world crop development conditions with the next set of supply and demand estimates out December 10th. U.S. export demand is slack, at best, and there’s plenty of wheat available, both domestically and globally. Russia’s Ag Ministry raised its 2018 grain production estimate to 110 million tons, maintaining its official export outlook of 38 million to 39 million tons. Japan bought 50,327 tons of U.S. food wheat, along with 35,549 tons from Canada and 34,350 tons from Australia. France’s AgriMer lowered its projection for soft wheat exports, inside the European Union, to 7.8 million tons, compared to 9.05 million a year ago.