Grains took a nosedive today:
Mar Corn – 9 1/2 cents/bu (5.96)
Jan Soybeans – 28 ¾ cents/bu (13.27 3/4)
Mar Chi Wheat – 8 cents/bu (7.79 3/4)
Cdn $ +0.00300 (78.45 cents)
WTI Crude Oil -0.03/barrel (76.53)
Selling sharply accelerated this morning in grains following the release of the USDA Weekly Export Sales Report. That report showed pretty good sales for corn, but the soybean and wheat sales were extremely disappointing. China bought only a net 15.9 million bushels of U.S. soybeans in the week ending Dec 23, but 14.5 million of that total was a mere shift from previous purchases by unknown destinations. In other words, fresh buying by China is drying up as Brazilian harvest begins.Actual sales volumes for the week ended December 23rd are listed below, in thousands of tonnes:
Marketing year wheat export sales to date fall short of the seasonal pace needed to hit USDA's target by 36 million bushels, versus being short by 31 million the previous week. Marketing year corn export sales to date exceed the seasonal pace needed to hit USDA's target by 215 million bushels, up from 189 million the previous week, while actual shipments fall short of the pace by 175 million bushels. (The big gap can be correlated to unshipped China purchases). Marketing year soybean export sales to date fall short of the seasonal pace needed to hit USDA's target by 51 million bushels, versus a deficit of 46 million the previous week.
Good rains also provided some pressure for the commodity market as they fell in very beneficial areas of South America. Map below shows rainfall in mm.
Corn and soybean conditions in Agrentina are decreasing due to hot weather. Although that is promising, they are falling from unusually high levels, making their decline more average.
Soybean harvest in Mato Grosso Brazil began yesterday, 20 days earlier than last year. It will take about a week before these early beans can make it to port to get loaded onto ships. The saiking time from Brazil to China is about 45 days, versus the 32 days it takes to go from the USA Gulf to China. That means that the USA only has a few more weeks to ship beans to China before big competition from Brazil emerges. Today, last half February bean offers landed in China beat USA bean offers by 80 cents/bu. That is why bean prices have struggled today. Domestic demand remains excellent for soybeans and for corn, but if export demand wanes, that could easily add beans to the USA carryout, leading some to question why we needed to rally as much as we have in the last 10 days.
Markets are open tomorrow for a full trading session, despite it being New Years Eve. Our Wanstead Branches will be open from 8-12, closing in the afternoon. Our branches will also be closed on Monday, January 3rd, in observance of New Years Day. If you have any deferred payments to pick up, you will be able to on January 4th.
Funds are thought to be all sellers today.