- Chicago values are mixed in light volume trade with soybeans/Chicago wheat trading either side of unchanged. Corn and KC wheat futures have held mostly firm on the hope that China steps forward with some fresh demand. As previously stated, there have been rumours of Chinese grain interest, but we cannot confirm any sales. FAS did announce this morning that China did book additional US soybeans. Some clean up business is underway this morning and by the close today, we are willing to argue that China will have secured 2-2.5 million mt of US soybeans. The sales will help US soybean exports recover with WASDE not having any additional China demand in their export grids as of the December report. We are looking for a mixed close going home. We doubt that anyone really wants to sell a break with China buying possible in the days ahead. Corn is breaking out of the top end of its range while wheat price trends are higher.
- Chicago brokers report that funds have bought 3,900 contracts of corn and 1,200 contracts of wheat, while being on both sides of the soybean market. In soy products, funds have bought 400 contracts of soymeal while selling 2,300 contracts of soyoil. The CFTC will release their CoT report later and funds are expected to be shown as a sizeable net corn long. Funds should also hold a soybean long, their first in months, while still holding a modest net short in Chicago and KC wheat. The USDA announced that an additional 300,000 mt of US soybeans was sold to China for 2018/19 delivery along with 130,000 mt that was to an unknown destination (likely China). Also, there was 125,000 mt of US corn sold to Japan in the old crop year.
- All December Chicago and KC futures contracts expire today. Spot month futures will become March in the grains on Monday.
- Russian interior wheat prices continue to advance amid tight stocks and solid export demand. Farmers are not showing any interest in marketing their modest amounts of stored wheat/barley until the new year, which in Russia means the last half of December. The Russian exporter meeting will be closely watched by the marketplace next week to see if the Government is willing to move to any export restrictions. The Russian Government must find a means to slow exports or risk running out of supply/stocks.
- The GFS weather forecast at midday is wetter in parts of Central Brazil but is also wetter in Argentina in the 8-15 day period. High pressure aloft loses its influence somewhat in Brazil beyond the next 10 days, but a pattern of below normal rain will continue there into Dec 28. Moisture deficits will widen through the period. In Argentina, excessive rain persists in Northeast growing areas through the weekend. Moderate rainfall 0.50-2.00” returns to the wettest areas of Argentina just after Christmas. A slower pace of planting and wheat harvesting lies ahead. Wheat quality remains the primary issue.
- Grain markets in December have begun to better reflect tight major exporter stocks. Favourable S American weather is needed, and work suggests the issue of tight stocks won’t be fully solved unless Northern Hemisphere yields are at/above trend in 2019. The elimination of US-China tariffs is needed to turn US and world markets bullish on oilseeds.