Market News

Soybeans, corn down on trade, weather uncertainties

Soybeans were lower on commercial and technical selling. The trade continues to monitor China’s economy and the spread of African Swine Fever, which could impact soybean demand. According to reports, the USTR says there was no progress on structural issues in last week’s trade discussions between the U.S. and China, with Cabinet-level meetings expected at the end of the month. The trade is also watching weather in South America and the probability of further yield or outright crop loss. That said, harvest has yet to start in Argentina and is just underway in Brazil, so there are still a lot of unknowns and, in any event, unless something drastic occurs, it looks like there will be another big South American crop, even if it isn’t a record crop. Soybean meal and oil were down on the same factors as soybeans. The NOPA member crush for December was 171.759 million bushels, larger than expected and a new monthly record.

Corn was lower on commercial and technical selling. Demand continues to be a supportive factor, but there’s a lot of corn available and the trade is wary about increased competition from Ukraine and potentially South America, depending on how their crop ends up. In South America, most near-term forecasts have a chance of flooding in parts of Argentina possibly leading to crop loss and hot, dry weather in parts of Brazil potentially impacting second crop acreage. Brazil’s second crop is the larger of the two and the source of most of their exports. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly production and supply numbers are out Wednesday. Production could decline again this week on concerns about margins and uncertainties about year-round E15 implementation and Chinese demand. In addition to China, the trade is waiting to see what happens with the USMCA and the new Congress.

The wheat complex was lower on commercial and technical selling, along with the higher U.S. Dollar index. U.S. wheat prices are competitively priced on the world market, but demand is limited by relatively high freight rates. The trade is watching Russia’s export pace, expecting a slowdown in sales, and along with generally good weather in most U.S. winter wheat growing areas. Parts of the Plains and Midwest are expected to have adequate snow cover ahead of a what could be a very cold system moving in this weekend. Japan is tendering for 111,961 tons of food wheat from the U.S., Australia, and/or Canada. After the close Tuesday, there were rumblings of new export interest from Egypt, the world’s top importer of wheat.