Market News

Soybeans up on new export demand, prospect of more sales

Soybeans were modestly higher on commercial and technical buying. The trade is waiting for the official announcement of new U.S. soybean export sales to China, expecting recent rumors to be confirmed this week. Trade negotiations between the world’s two largest economies are ongoing, with China expected to reduce import tariffs on U.S. cars. Mexico and unknown destinations did buy U.S. beans Wednesday morning, with Mexico picking up 130,632 tons and unknown purchasing 110,000 tons, with both for delivery during the current marketing year. The USDA’s weekly export numbers are out Thursday morning. Beans are also watching planting and development conditions in Argentina and Brazil, while trying to figure out just how much U.S. production has been impacted by this year’s late harvest. Soybean meal and oil followed beans higher.

Corn was narrowly mixed, consolidating after Tuesday’s bearish supply and demand report and firm close. Export demand is stronger than expected, but the trade remains wary of increased competition from Ukraine and South America. The trade continues to monitor international production, along with the very tail end of this year’s U.S. harvest. The USDA’s final 2018 totals are out in January. Ethanol futures were higher. The U.S. Energy Information Administration says ethanol production last week averaged 1.046 million barrels a day, down 23,000 on the week, with stocks of 29.89 million barrels, 140,000 lower. The USDA lowered its 2018/19 corn for ethanol use, citing a decline in first quarter production, at least partially because of margins. The industry continues to await official word on year-round E15 implementation and progress in trade talks with China, which could buy U.S. ethanol, DDGS, and sorghum. The signed, but not yet ratified, USMCA is also expected to be a positive for demand.

The wheat complex was modestly higher on commercial and technical buying, along with the mostly weak U.S. Dollar index. Wheat shrugged off the bearish USDA numbers, even with the continued bearish pace of exports. A little more than halfway through the 2018/19 marketing year, sales trail expectations and the USDA reduced its outlook Tuesday to 1 billion bushels. New supply and demand estimates are out in January, along with winter wheat acreage projections. Planting was delayed in some key winter wheat growing areas, so the total is expected to fall below the USDA’s last guess. Egypt is tendering for an unspecified amount of milling wheat, which is expected to mostly go to Russia.