Today’s Prices
Grain prices were mixed with some rain in Brazil generating a little bit of selling but warmer temps and a drier than desired forecast providing some support giving the gran markets a mixed trade today.
Grain Market News
Corn: Weekly Export Sales
Weekly corn export sales came in at 1.089 mmt. That is not as large as we’ve seen over some of the previous weeks we’ve seen this marketing year but over a million metric tons is still a big number and about double the level needed to reach USDA’s export forecast.
Soybean: Weekly Export Sales
Soybean export sales were the smallest of the marketing year but still 1.388 mmt and we only need 204 tmt per week to of sales to reach USDA’s export forecast. The U.S. has already sold 86% of USDA’s entire marketing year estimate and we’re only 2.5 months into the marketing year.
Wheat: Weekly Export Sales
Wheat export sales were disappointing at only 192 tmt. Five out of the last 7 weeks have had very good sales so one week of disappointing sales is not the end of the world but it was certainly disappointing for today’s trade.
Grain Market News
La Nina Forecast
The current la nina is about at 1.3 degrees below normal in the equatorial Pacific Ocean and is projected to go as much as 2 degree below normal which is an extremely strong la nina. This is one of the reasons why the market monitors South America’s weather closely every year but with this strong la nina in place this year monitoring the weather in South America is even more critical than a typical year.
Brazil: Soybean Production
The center-west area, Mato Grosso, is the number one producer of soybeans in Brazil producing 27% of Brazil’s crop over the past few years. Extreme southern Brazil, Parana, Rio Grande do Sul, and Santa Canatrina produces over a third of the Brazilian crop.
Argentina: Soybean Production
In Argentina, the heart of their production is consolidated into Cordoba, southern Santa Fe, and northern Buenos Aires. These three states produce nearly 80% of the soybeans in Argentina. The weather in the center of Argentina is the heart of their growing region and that’s the area the needs to be monitored as we head towards Dec and Jan, the heart of the their growing season.
Soil Moisture Change
This map shows the soil moisture change that is anticipated over the next week. The northern/northeastern fringe that may get the best rain while central Brazil may remain relatively dry with some potential rains in Rio Grande do Sul as well. If we highlight Argentina’s growing region, there is somewhat of a mixed trend. Some areas adding a little bit of moisture in blue and some areas in tan should see a soil moisture reduction. It doesn’t look overly drastic for Argentina at this time but much southern and central Brazil could continue to see soil moisture depleting.
Temperature Anomaly
The western and northwestern growing regions in Brazil will warm up with temperatures in the 90’s and 100’s next week. Argentina also looks to have above normal temperatures so we have a drier than desired rainfall pattern combined with warming temperatures and this is certainly something that needs monitored in the weeks to come.
December Corn Chart
Corn prices had a consolidating day. It was an inside day. We did not take out yesterday’s low or high as the market is now consolidating for just a moment. The overall trend is up and it’s a fundamentally based uptrend with shrinking stocks and tighter stocks to use ratios dominating the supply and demand and fundamental outlook for corn. At this point the uptrend is up and the technical indictors have room to move with no sign of topping at this time in the corn market.
January Soybean Chart
Bean prices made a new high for the move yesterday and a little bit of a pullback day, although we were able to close a little bit higher. Bottom line in beans, the trend is clearly in an uptrend. No sign of a losing up of the overall tight stocks situation, in fact, it may get tighter before it gets better as USDA’s export forecast may be too low. If USDA raises exports they are certainly unlikely to lower crush because of the record crush demand and beginning stocks won’t change as USDA’s final stocks are already set from last year. That means any increase in exports could go right to the bottom line and reduce ending stocks from an already tight situation. Soybeans will have corrections and pullbacks from time to time but at this point it does not appear that the soybean market has found a top.
December KC Wheat Chart
Wheat prices have been chopping back and forth in a fairly wide but sideways range over the past couple of months. Wheat prices are still in an overall long tern uptrend but recently they have been unable to make a new high. New highs were posted about two weeks ago and current prices are about $0.30 below the highs posted in late Oct and early Nov.