Market News

Soybeans, corn, wheat down ahead of USDA numbers

Soybeans were lower on fund and technical selling. Beans continue to wait for new outright demand from China and public progress in trade talks. Unknown destinations bought 125,000 tons of 2019/20 U.S. beans, which might be China, or it could be several other eventual destinations. According to wire reports, Beijing has approved rapeseed meal imports from Kazakhstan to bolster livestock feed supplies as the trade conflict with the U.S. continues. China has also ended a ban on rapeseed meal from India. Customs data from China shows November soybean imports were 5.4 million tons, down 38% on the year, the lowest in two years, with buying constrained by China’s tariff on U.S. beans and tighter supplies in South America. Beans also continue to watch the very tail end of this year’s U.S. harvest and development conditions in South America. Most of the changes in Tuesday’s supply and demand report are expected to be connected to production in Argentina and Brazil. CONAB will also be releasing new estimates for Brazil Tuesday. Soybean meal was modestly lower and bean oil was firm on the adjustment of product spreads. The USDA’s attaché in India estimates 2018/19 soybean production at 11.3 million tons, down 200,000 from the last guess because of lower planted area, adding rapeseed planting is currently behind last year’s pace.

Corn was modestly lower on fund and technical selling. Corn was getting ready for Tuesday’s new USDA supply, demand, and production report, expecting minimal changes in this round of reports. With an unknown amount of U.S. corn still waiting to be harvested, any changes to the 2018 production estimate are expected to wait until January. The USDA is expected to adjust some demand indicators and possibly some world production numbers. Mexico bought 1,645,920 tons of U.S. corn, with 1,101,900 for 2018/19 delivery and 541,020 for 2019/20. The Trump administration’s NAFTA replacement, the USMCA, has been signed, but still needs to be ratified by the national legislatures of the U.S., Canada, and Mexico, and NAFTA has to be formally repealed by the U.S. Congress. A new trade deal with China likely wouldn’t lead to an increase in corn exports, but could have an impact on ethanol, DDGS, and sorghum. Ethanol futures were lower.

The wheat complex was modestly lower on fund and technical selling. The bearish fundamental outlook is expected to be reinforced again Tuesday with a lot of the trade’s focus expected to be on the global side of the balance sheet. Some areas of interest will include Australia’s crop and exports, Canadian production, and production and exports from the Black Sea region. The trade will also continue to monitor the very end of U.S. winter wheat planting and emergence. The new USDA numbers are out Tuesday at Noon Eastern/11 AM Central. New trade deals are expected to have a minimal impact on U.S. wheat exports. Just over halfway through the 2018/19 marketing year, export inspections continue to be bearish. DTN reports there are several outstanding wheat export tenders, some of which could go to the U.S., but the totals are expected to be routine and unless there’s a significant spike, it doesn’t look like wheat sales will reach the USDA’s projection.