Soybeans down for third day in a row
Soybeans were lower on fund and technical selling, losing ground for the third consecutive session. Rain coverage has improved in parts of Argentina and Brazil, but there’s a long way to go in their growing season. Many firms are projecting record production for Brazil, with a more uncertain outlook for Argentina. The trade is waiting to see what adjustments, if any, the USDA makes in the next set of supply, demand, and production estimates out Thursday, December 10th. The latest estimates for Brazil are 134.98 million tons from Datagro and 133.9 million from StoneX. Brazilian export firm ANEC says no ships loaded with beans were expected to leave port between November 29th and December 5th, typical for this time of year. An open-ended strike by grain inspectors in Argentina was over not long after it started and had no perceptible impact on movement. The record soybean crush in October was also not really a factor. Soybean meal was lower and bean oil was mostly weak, with both influenced by the generally bearish tone in the soy complex.
Corn was modestly higher on short covering and technical buying, along with spillover from the bounce in wheat. Corn is also watching weather in South America, including the improved chances for rain in some areas. The big question for corn is how the soybean planting delays in Brazil could push back second crop corn planted, which happens after the bean harvest. Datagro sees Brazil’s total crop at 114.04 million tons and StoneX pegs production at 109.34 million tons. Export demand is solid as the U.S. continues to have a price advantage over other major sellers. Feed demand is also solid, but ethanol use continues to be limited by blending demand uncertainties caused by COVID-19. The U.S. Energy Information Administration says production last week averaged 974,000 barrels a day, down 16,000 on the week and 86,000 on the year, while stocks climbed to 21.24 million barrels, a near six month high, up 374,000 from the previous week and 601,000 above a year ago. Ethanol futures were steady to lower. DTN says a feed mill from South Korea bought 65,000 tons of optional origin corn. The USDA’s weekly numbers are out Thursday at 8:30 AM Eastern/7:30 Central.
The wheat complex was higher on short covering and technical buying. Contracts are oversold, but the global supply fundamentals remain bearish, limiting the upside. Harvest is underway in Australia, while northern hemisphere crops are going dormant with condition concerns due to dry weather in the U.S., Russia, and Ukraine. Still, it’s less about the weather heading into dormancy and more about the weather coming out of dormancy. The trade is waiting to see if there are any significant global production estimate changes from the USDA next week, but the global supply projection is expected to remain close to, if not at, record levels. Wheat is just over halfway through the 2020/21 marketing year. According to reports, Australian wheat prices in Asia are being supported by demand, not pressured by increased production thanks to much better growing weather. DTN says Egypt bought 170,000 tons of wheat from Russia and Ukraine, while South Korea picked up 31,600 tons of U.S. milling wheat and Thailand purchased 54,000 tons of optional origin feed wheat.