Today’s Prices
Grain markets finished lower to sharply lower today with soybeans leading to the downside on some disappointing comments coming from the EPA.
Grain Market News
EPA RFS Volume Requirements
This year at 20.63 and then a gradual increase going forward to the next 3 years.
US Cumulative Weekly Soybean Oil
Soybean oil was down sharply in fact lock limit down and additional losses are expected tomorrow.
Soybean oil is not priced for export, it is not competitive on the global market and that’s because the US needs our soybean oil domestically for the renewable diesel industry.
Grain Market News
South American Precipitation Forecast
The first week of the forecast continues to have mostly favorable rainfall for Brazil and dryer weather for Argentina and Paraguay.
The forecast has added some rain for eastern Argentina and Uruguay as well as extreme southern Brazil in todays forecast.
The second week continues to show dry pockets in southern Brazil and Paraguay but there have been some adjustments with additional rain being added for Argentina.
Soybean Production
In the 80s the U.S. had 50mmt of production or so, we are now double both Brazil and Argentina combined which was around 20-25mmt.
Then in late 90s and early 2000s U.S. production was 60-70mmt, South America was at 60-70mmt.
So, around the 2000-year mark was when South America was starting to equal the U.S.
By 2012 Brazil was equal to the U.S. by itself and now Brazil is consistently a larger producer of soybeans than the U.S.
Corn: Weekly Export Sales
Corn sales down to 603 thousand tons, that was at the lower end of the range of expectations and below the level needed for the first time in 3 weeks.
Corn sales continue to run at a pace that USDA is going to have to lower the export forecast.
Soybeans: Weekly Export Sales
Soybeans were also at the lower end of expectations at 694 thousand tons, that was above the level needed to reach the UDSA forecast.
But this is well below last year.
Soybean exports are running at a pace that’s fairly close to the UDSA’s current projections.
Wheat: Weekly Export Sales
Wheat was very disappointing at 156 thousand tons, but we have had a couple very good weeks over the last month over 500 thousand tons.
Wheat exports are running very close to the level needed to reach the USDA forecast.
December Corn Chart
Corn had a disappointing day falling further today and breaking the very gradual uptrend that was in place.
This market is stuck a sideways range.
Chart support at 6.53 and overhead resistance at 6.77.
November Soybean Chart
Soybean prices pushed to new highs yesterday but then had a major set back today on the crash in soybean oil prices based on EPA’s announcement.
That took soybeans from the upper end of the range back down to trend line support.
Its still unclear if the EPA’s proposal will affect overall renewable energy production but it spooked the soybean oil and the soybean market.
December KC Wheat Chart
Wheat prices made a new low today down to 8.81 and then bounced back and closed at 8.90.
The downtrend is still intact.
With prices making new lows and technical indicators near zero, we do not want to be selling wheat.
The first overhead objective is around 9.25.
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