Corn is trading a little lower this morning with a wetter forecast for the drier areas of Brazil. But corn futures remain in a sideways pattern for now, stuck between support and resistance.
Delays in Brazilian corn planting due to weather issues could open up a window for increased US exports, which may provide some support to the market as time goes on.
US corn export sales are 36% ahead of last year, and US corn is competitively priced on the global market.
China’s internal corn price hit the lowest level in seven months, with the May contract down 1.71% on Monday.
Last week, there was an announced sale of soybeans each day, totaling over 52 mb, with some to China and some to unknown destinations. Even so, soybeans are a little softer this morning, due to increased rain in the forecast for the central and northern parts of Brazil.
Dry conditions for some of Brazil’s early planted soybeans may have already taken a toll, with harvest in Mato Grosso showing some poor yields so far.
Last week’s NOPA crush report showed a record for the month of November, with crush at 189 mb.
Despite some of their weather issues, estimates for Brazil’s soybean crop range from 155 mmt to a record 161 mmt by CONAB and the USDA.
So far, there have been no additional purchases of US wheat from China since the last announcement two weeks ago. There was some anticipation that they may continue to buy, but without that support wheat may be running into some upside resistance.
So far this year, China has imported 11.5 mmt of wheat, which is up over 29% from last year. As to why, some speculation is that it is political in nature, while others feel that their grain production numbers were actually lower than what was officially reported.
Russia is believed to be the origin for the majority of Saudi Arabia’s wheat purchase of 1.35 mmt over the weekend. In other Russia news, they have reportedly stated that they have no interest in re-establishing the Black Sea Grain Initiative.
Funds have been covering some of their short wheat position, but still hold a hefty short position of around 70,000 contracts of Chicago wheat.
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