Markets are quiet this morning with corn and soybeans trading 1 lower and 1 higher respectively. This will probably be the case moving forward until we get updated supply estimates for the United States in January. In yesterday’s report the USDA left the U.S. corn balance sheet completely unchanged this month as was expected. Weekly ethanol production and exports have been good enough to justify current estimates and feed/residual won’t be updated until December 1 stocks data can be incorporated. On the global front, the USDA cut the Argentine corn crop to 49.0 million metric tons (mmt) vs. 50.0 mmt last month and 51.0 mmt last year. The USDA left their estimate of the Brazilian corn crop unchanged at 110.0 mmt even though Brazil’s state forecaster CONAB is at 102.6 mmt. It was encouraging to see the USDA raise their estimate of Chinese corn imports to 16.5 mmt from 13.0 mmt last month. Considering China already has 11.3 mmt worth of corn imports on the books, the USDA’s estimate of 16.5 mmt could still prove too small.
The December WASDE wasn’t much of a feature for soybeans either, although carryout and the stocks/use ratio tightened further. In general, soybeans remain in a consolidative mode much like corn, making day-to-day price action difficult to manage. South American weather remains the largest factor, at least until the focus can be brought back to the United States in January.
As I have been saying for the last few weeks, South American weather and Chinese sales/cancellations are going to be the market movers for the foreseeable future. While I believe China will continue to buy US soybeans with the later supply from South America expected, I have heard from some very reliable sources that they expect China will cancel some of the purchases currently on the books.
With corn and soybean cash prices at profitable levels for both old and new crop corn, producers should be making sales. We may see a late winter/early spring acreage push, but nothing is guaranteed. As the saying goes “A bird in the hand is worth 2 in the bush”! Let’s take the bird and make sure we can farm another year.
Have a Safe Day!