Market News

Soybeans higher ahead of China news

Soybeans were higher on short covering and technical buying. The big news for beans came after the close, with reports the U.S. and China had agreed to phase one of the comprehensive trade deal. Ahead of that, beans were up on optimism the deal would be reached ahead of new U.S. tariffs going into effect December 15^th, following a week of mixed rhetoric and messaging from Washington D.C. Wednesday, China bought 585,000 tons of 2019/20 U.S. beans, the biggest one day purchase in months, and unknown destinations, which could turn out to be China, also picked up U.S beans. Beans are also watching weather in South America. Weekly export numbers were bullish, with unknown destinations and China the big buyers. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.

Corn was higher on short covering and technical buying. Weekly export sales were larger than expected, but still trail last marketing year by a wide margin because of slow shipments and the competition from Argentina, Brazil, and Ukraine. Mexico and unknown destinations both bought U.S. corn Thursday morning. Mexico purchased a total of 1,600,200 tons, 1,074,420 for 2019/20 and 525,780 tons for 2020/21, and unknown picked up 110,744 tons, all for 2019/20. Brazil’s JBS is expected to buy corn because of high domestic prices, but it’s not expected to be sourced from the U.S. DTN says two South Korean feed mills bought optional origin corn, 65,000 tons and 55,000 tons, respectively, “likely” from the Black Sea region. The amount of unharvested U.S. corn is unknown, but the USDA’s survey for the January report is ongoing. Ethanol futures were higher. The trade is also watching weather in South America, with generally good conditions in Brazil and dry weather in parts of Argentina.

The wheat complex was higher on short covering and technical buying, with Chicago and Kansas City in the lead. Weekly wheat export sales were larger than expected, but there’s plenty of competition. The USDA did lower production estimates for a few key export competitors, but also raised outlooks for others and projects a record global supply at the end of the marketing year. Strategie Grains has 2020 soft wheat production for the European Union at 140.5 million tons, down 3.6% from the 2019 estimate because of a 2.5% decrease in planted area. France’s Ag Ministry sees non-E.U. soft wheat exports at 12.2 million tons, the third month in a row with an increase. Stateside, the complex is monitoring dry conditions in parts of the southern U.S. Plains. Argentina’s new presidential administration is in place, but no announcement has been made about changes to export taxes. DTN says South Korea bought 35,000 tons of wheat from Australia, while Ethiopia, Japan, Syria, Taiwan, and Tunisia all have open tenders.