CORN
- March corn held the 470 support level overnight and is doing so, so far this morning. From a technical point of view, corn futures may be considered oversold and due for a bounce to the upside.
- In November, Brazil overtook the US as the top corn supplier to China. For that month, Brazil’s exports to China totaled 3.22 mmt of corn; China imported a total of 3.59 mmt that month. China’s total corn imports this year are at 22.18 mmt, with 40% of that having come from Brazil and 29% from the US.
- Crude oil is higher again this morning due to continued Houthi drone attacks on Red Sea shipping lanes. The rally in oil may offer some underlying support to the grain markets.
- In addition to the issues in the Red Sea, water levels on the Panama Canal are still low, and both of these issues are leading to increased global freight costs. In turn, this may offer some resistance to corn futures.
SOYBEANS
- Soybean futures are relatively close to unchanged this morning, and traders may be awaiting more news as far as the Brazilian weather forecast goes. The next ten days or so show a wetter pattern, but the key will be how much of that materializes.
- The spread between January and March soybeans continues to narrow, likely due to the recent sales to China and unknown destinations, along with the fact that commercials are short in the nearby market.
- Chinese imports of Brazilian soybeans are up 108% in November at 5.29 mmt, compared to November of last year. China’s total November soybean imports this year were 7.92 mmt.
- According to a farmer survey, soybean production in Mato Grosso (Brazil’s top grain producing state) is expected to be down 20% in 2024 due to heat waves and spotty rains.
WHEAT
- The forecast for the US southern plains has rain in the nearby, but the second week looks drier and colder.
- Egypt purchased 480,000 mt of Russian wheat in their tender. Shipments are for 180,000 mt during the first half of February, with the remainder during the second half of the month.
- As of December 17th, EU soft wheat exports have fallen 16% year on year, since the season began on July 1. The total of 14 mmt compares with 16.6 mmt for the same timeframe last year.
- Consultancy group APK-Inform increased their estimate of the 2023 Ukraine grain harvest to 56.3 mmt, versus 54.7 mmt previously. This reflects an increase in corn production, while keeping the wheat output estimate unchanged at 21.5 mmt.
Author
Brandon Doherty