Market News

Soybeans, corn supported by South American weather

Soybeans were higher on commercial and technical buying. Hot, dry weather in portions of Brazil is affecting early yields and parts of Argentina are expected to receive more rain, leading to flooding in some areas. The Buenos Aires Grain Exchange did lower its planted area estimate for soybeans slightly, citing heavy rainfall. Beans also have an eye out for any public progress in trade discussions with China ahead of Cabinet level meetings later this month. There’s been more talk of new demand from China, but no official confirmations. The USDA’s weekly export inspection report is pushed back until Tuesday. With no end in sight for the partial shutdown of the federal government, continued funding for the various USDA programs still in operation is a question mark. Soybean meal and oil followed beans higher.

Corn was modestly higher on commercial and technical buying. Corn was also watching South America and waiting for advancement in trade talks and on the USMCA. Pre-planting conditions generally look good in most of the Midwest and Plains. If the partial shutdown of the federal government continues much longer, it could delay the USDA’s Ag Outlook Forum scheduled for February and possibly even the prospective planting numbers at the end of March. Ethanol futures were higher. The industry continues to monitor margins, while waiting for any potential policy changes under a new EPA director, more details on year-round E15 use, and potential export demand from China. U.S. corn, DDGS, and sorghum are also possible targets for Beijing.

The wheat complex was steady to modestly higher on commercial and technical buying. U.S. wheat prices are competitive on the global market, but actual export sales announcements are hard to come by because of the government shutdown. The trade is also watching Russia’s export sales pace and prices in the Black Sea region. According to Interfax, Russia’s Ag Ministry will start regulating domestic grain prices, but no further details or start date were announced. The USDA’s Commodity Credit Corporation bought 64,700 tons of soft wheat for Yemen. The Buenos Aires Grain Exchange has Argentina’s wheat crop at 19 million tons. Strategie Grains pegs the European Union wheat crop at 146.4 million, down 600,000 from the last guess, but up 15% on the year.