Grains closed mixed on Monday:
Mar Corn – 4 cents/bu (5.89 ¼ )
Mar Soybeans + 16 ¼ cents/bu (13.55 ½ )
Mar Chi Wheat – 12 ¾ cents/bu (7.58)
Cdn $ -0.00640 (78.41 cents)
WTI Crude Oil +0.91/barrel (76.12)
Despite trading significantly higher in overnight markets, grains lost some of their shine as the trading day progressed. South American weather had weekend rains in northern and central Brazil, with showery type weather in the south. Argentina had good rains over the weekend as well. However, Argentina looks to revert to heat and dryness, as does southern Brazil in it’s 6 to 10 day forecast. That weather forecast will continue to support soybean prices, and ultimately should be supportive to corn as well. In the meantime, corn and wheat values do face some technical selling pressure due to the late December sell off, and will likely remain under some pressure until we see evidence that these lower prices are generating some new buying interest.
This morning, the USDA released their Weekly Export Inspection Report for shipments last week (week ended December 30th).. Shipments were less than impressive, coming in at the low end of expectations for corn and BELOW the low end of expectations for soybeans and wheat. This is disconcerting, as the window for shipping soybeans to China without competition from South America is closing quickly. Of the beans shipped last week, 63% were loaded for China, while only one cargo of USA corn was loaded for China last week. One small glimmer of good news out of today’s report was the fact that the USDA raised export shipments in the previous week (week ended Dec 23rd) by 235,000 tonnes for corn and by 155,000 tonnes for soybeans.
Bean prices are getting support from the StoneX monthly Brazilian production forecast which was released today, and which slashed 11 million tonnes from their December estimate, due to adverse weather. Estimated production levels were cut as much as 25% in some southern areas. Total Brazilian corn production estimates were cut by 2.5 million tonnes.
On the day, funds were thought to have been sellers of 5,000 corn contracts (now long 343,000), buyers of 5,000 soybean contracts (now long 97,000), and sellers of 6,000 Chicago wheat contracts (now short 31,000).
Later this afternoon, the USDA will release it’s total November soybean crush, which is expected to be below the previous month’s alltime record, but still well above November 2020’s crush totals. Also later this afternoon, the CFTC will release it’s weekly report on fund positions in commodities.