March corn was 5 cents higher today at $6.71 1/4, January soybeans gained 1/4 cent to close at $14.36 1/4, and March wheat in Chicago was 16 1/2 cents lower at $7.97.
A story in the market that is getting more attention is the political unrest in Brazil. We are now seeing the presidential election contested which is leading to protest blockades being placed on several Brazilian highways, slowing commodity movement. The question now is what the impact of this may be on moving remaining old crop inventory ahead of the approaching harvest. Covid cases continue to rise in China and will likely further slow the country’s economy. China has announced it will inject money into its housing market to help offset economic pressure. Weather is turning mixed on South America with some regions drying and others seeing elevated rains. Production expected to remain near current estimates, for now. Higher water levels on the lower Mississippi River benefiting movement while the upper Mississippi remains low. Russia has announced they are looking at ways to move more fertilizer into the global market. This likely hinges on other factors, including Russian finances. We did see buying interest rise today in very low volume which supported futures.
Corn futures traded both sides of unchanged today which was not surprising given the day’s low volume. Traders in the corn complex are paying close attention to Black Sea movement. There are a reported 78 vessels waiting to enter the Black Sea to load and another 100 waiting to be inspected to leave. Only 5 vessels have left the Black Sea since November 19th which is concerning for importers. The blockades in Brazil that are hampering movement to export terminals are also becoming more of an issue. This could easily bring the US more export demand, but ongoing issues at the gulf and the possibility of a rail strike is limiting our interest as well. Demand concerns are also building in the domestic market due to lower feed potential and slowing ethanol consumption. These ongoing demand worries have capped corn futures, even with favorable weekly sales totals. Reports that Mexico is going to continue trade with the US has offset some of these worries as Mexico is 30% of US corn demand.
Solid weekly exports and technical buying supported soybeans in today’s session. Future soybean demand is starting to be more of a market factor. The US is making decent sales now, but from January forward economics heavily favor South America over the United States. This is where China has been sourcing the majority of its needs and now has a reported 26% of its coverage for January in place. This indicates the bulk of US sales for the year are likely over. We may see another Peso for soybean deal in Argentina as soon as later today which will further add to the global soybean supply, and US competition. Argentine planting remains very slow with more thoughts we will see acres shift to other crops if delays continue.
Wheat futures were mixed today in a choppy, volatile session. Support for wheat is coming from the drought conditions in the US and slowing exports out of the Black Sea. Ukraine exports are slowing which is opening the door for additional US sales. The Argentine wheat crop is rated just 8% Good/Excellent and production estimates are declining. Projections for the Australian crop are rising though and so are quality reports. This will elevate demand for their offers. Russia continues to undercut the global market though, and this is where most buyers are sourcing their needs.
Export sales for the week ending November 17th were all within trade expectations. Corn sales totaled 72.8 million bu (mbu) for this marketing year, and while sizable, were on the lower end of expectations. This high total was the result of Mexico buying and was expected given daily sales reports. Soybean sales for this year totaled 25.4 mbu which was also on the bottom end of trade guesses. Wheat sales for the week were on the top side of expectations at 18.8 mbu. We also had new crop sales of 24.7 mbu on corn and 400,000 bu of soybeans.
Beef exports for the week were again light at 12,900 metric tons for 2022. Beef sales for 2023 came in at 4,000 metric tons. The main buyer of US beef was South Korea. Pork sales for the week rebounded from recent low totals with 45,800 metric tons being sold for 2022. Pork sales for 2023 were reported at 4,400 metric tons. Mexico was the leading US pork buyer. We did see sizable beef sales for the week to China but no pork.
Importers are showing more concern on the reliability of the United States to make timely exports. This has been an issue for the Gulf for the past several months due to low water levels on US rivers, but now the looming rail strike is becoming a factor. The deadline to prevent a rail strike is December 9th, and importers have been reluctant to make purchases as a result. There is a possibility the White House may intervene, and force talks to continue, but this is still an issue for demand.
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