Market News

Another round of new highs for corn

Soybeans were higher on commercial and technical buying, within striking distance of the highs hit after this month’s supply and demand report. Planting has picked up steam in South America, but it’s been delayed enough China might have to rely on the U.S. for longer than normal to fill export needs, likely into early 2021. Brazilian export group ANEC estimates October soybean exports at 2.32 million tons. Brazil has suspended import tariffs for non-Mercosur nations, but imports of U.S. soybeans are expected to range from non-existent to minimal because of logistical issues. The trade is expecting some U.S. harvest delays this week, but overall, those are expected to be minor and some areas should be able to make solid progress. Soybean meal posted another round of new highs on work stoppage and the slower crush pace in Argentina, but bean oil was lower, pressured by profit taking, the lower crude oil, and product spread adjustments.

Corn was higher on commercial and technical buying. The December contract closed at another one-year high on demand expectations and the surge in China’s domestic prices. The trade is also watching the planting pace in South America and potential near-term U.S. harvest disruptions. Brazil isn’t expected to buy much corn from the U.S., even with a suspension of the import tariffs. Brazilian export firm ANEC estimates October corn exports at 5.5 million tons. Ukraine’s economic ministry says 44% of corn planted area has been harvested. The U.S. Energy Information Administration says ethanol production last week averaged 913,000 barrels a day, down 24,000 on the week and 83,000 on the year, with stocks of 19.721 million barrels, a decline of 287,000 from the previous week and 1.643 million below year ago levels. Ethanol futures were higher. The USDA’s attaché in Colombia estimates 2020/21 corn imports at 6.1 million tons, compared to 5.8 million in 2019/20.

The wheat complex was mixed, with Chicago mostly firm, Kansas City weak, and Minneapolis modestly higher. Cash prices in the Black Sea region were up on the continued dry weather in parts of Russia and while there’s some rain and snow in the forecast for southern U.S. Plains, it’s expected to be followed by more dry weather. Ukraine’s economic ministry says the spring wheat harvest is over, while 76% of winter wheat is planted. The USDA’s attaché in Kazakhstan sees 2020/21 wheat production at 12.7 million tons, more than what the USDA is currently officially expecting and 12% more than in 2019/20. The attaché for Australia projects 2020/21 wheat production at 28 million tons, compared to 15.2 million in 2019/20 thanks to better weather conditions, with exports of 18.5 million tons, compared to 9.5 million last marketing year. Parts of eastern Australia could see heavy rainfall this week, potentially lowering yield. DTN says Taiwan is tendering for 88,635 tons of U.S. milling wheat and Tunisia is in the market for 50,000 tons of optional origin milling wheat.