Market News

Soybeans bounce back a bit

Soybeans were modestly higher on commercial and technical buying. No new sales to China were reported Monday morning, but they could be on the way later this week. The trade is also watching planting and development conditions in South America. Near-term, there are concerns about planting delays and damage, but there is a long way to go and longer-term outlooks are generally less threatening. Still, this recent round of heavy rain in Argentina could lead to at least a few hectares being replanted, the most recent planting estimate was 69% complete, and potential crop loss in South America would likely mean at least some increase in U.S. export demand. The trade is also waiting for the final 2018 U.S. production numbers out in January. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. Allendale says Egypt is tendering for “at least” 30,000 tons of soybean oil and 10,000 tons of sunflower oil. The National Oilseed Processors Association’s November member crush was reportedly smaller than expected.

Corn was fractionally lower on profit taking and technical selling. Corn is also watching the export market, which has been a solid source of support for most of this marketing year. Weekly export inspections continue to move out faster than expected. Argentina had heavy rain over the weekend and parts of central Brazil are increasingly dry, potentially stressing the crop. It’s probably a bigger factor for Argentina, since Brazil’s second corn crop is much larger and the source of most of their exports and rain could be on the way next week. Ethanol futures were weak, with continued concerns about plant margins and the industry awaiting more news on year-round E15 use. The corn trade is also waiting for the USMCA to be ratified and NAFTA to be officially repealed. China is expected to buy U.S. corn in the near future, probably after January 1st. China’s National Bureau of Statistics says 2018 corn production was 257.3 million tons. DDGS, ethanol, and sorghum are also potential purchases by Beijing.

The wheat complex was modestly higher on short covering and technical buying, along with the weak U.S. Dollar index. Wheat has an eye on winterkill concerns in the Black Sea region and the wet weather in Argentina delaying harvest activity and leading to quality concerns. Russia’s Ag Ministry and exporters are still scheduled to meet December 21st with the possibility of sales restrictions. Those, along with issues in Australia, could lead to better export demand for U.S. wheat, which has improved, but still trails USDA expectations. New supply and demand estimates are out January 11th, along with winter wheat planting figures. With the slow pace of planting in the U.S. Plains, many analysts expect lower than projected acreage. Jordan is tendering for 120,000 tons of milling wheat.