March corn closed up 3 cents and all three U.S. wheats finished higher Wednesday, supported by the anticipation of more export business ahead. January soybeans were down 9 cents, pressured by rain in the forecast for central Brazil and a sign of softening demand in China.
March KC wheat closed up 14 3/4 cents at $5.53 3/4 Wednesday, continuing its choppy trading behavior after closing at a new 1-month low Tuesday. Wednesday’s weather map showed a mix of snow and rain in the southwestern U.S. Plains, offering some moisture benefit to HRW winter wheat crops. After Wednesday however, the forecast turns dry again for most winter wheat areas the next 10 days and the Climate Prediction Center’s longer-term forecast for December is also dry. As many have already pointed out, the conditions crops in the U.S. and Russia are greeted by in early spring is what really matters so we are largely in a waiting period as far as winter wheat prices are concerned. Meanwhile, HRW wheat export commitments are up 7% from a year ago, maintaining a steady pace, but posing no significant threat to USDA’s demand estimates. It was mildly bullish to see China in for 12.2 mb of U.S. wheat last week and given their increased appetite for corn and sorghum, China could have more wheat purchases ahead. With crops going dormant in the Northern Hemisphere and USDA wheat supplies estimated at their lowest level in six years, KC wheat prices are apt to find a sideways trading range this winter with enough support to stay above $5.00. Technically speaking, the trend remains up for March KC wheat, but has turned sideways for the March contracts of Chicago and Minneapolis wheats. DTN’s National HRW Index closed at $5.06 Tuesday, down from a 2-year high. DTN’s National SRW Index closed at $5.50, down from a 5-year high. Wednesday’s delivery intentions totaled 5 for December KC wheat and 110 for December Chicago wheat.
March corn closed up 3 cents at $4.23 3/4 Wednesday, overcoming early selling pressure and bearish influence from a third day of lower soybean prices. The latest 7-day forecast expects heavy rain amounts in central and southern Brazil, which is especially good news for crop conditions in Mato Grosso. Argentina’s crop areas will see light to moderate amounts. USDA had no new export sale announcement Wednesday. May corn prices on China’s Dalian exchange were down 0.6% Wednesday but are still near their high and translate to $10.32 a bushel. The U.S. Energy Department said last week’s ethanol production fell from 990,000 to 974,000 barrels per day, down 8% from a year ago. Ethanol inventory increased from 20.9 million barrels to 21.2 million barrels. News of vaccines on the way is promising, but the daily U.S. coronavirus death toll is nearing its highest level since spring and is reining back driving activity and the return of night life. U.S. gasoline demand was down 12% from a year ago and remains a bearish lid on ethanol production. From a fundamental view, USDA’s ending corn stocks estimate of 1.70 billion bushels (bb) should support cash corn prices in the low $4s. With China’s corn prices holding in a firm uptrend, the U.S. is in a good position to benefit from more export business the next several months. Technically, the trend in March corn remains up, but prices are having difficulty trading above the old contract high of $4.33. DTN’s National Corn Index closed at $4.02 Tuesday evening, near its 1-year high and 19 cents below the March contract. There were no delivery intentions for December corn Wednesday. In outside markets, the December U.S. Dollar Index is trading down 0.20 at its lowest spot price in over 2 1/2 years. According to RTTNews.com, the payroll firm ADP said private sector employment increased by 307,000 in November, less than expected. The U.S. Labor Department releases the November unemployment report Friday morning.