Corn and wheat futures also fell.

Benchmark January soybeans on the Chicago Board of Trade (CBOT) settled down 12-1/4 cents at $13.07-1/4 per bushel, turning lower after a climb to $13.31-1/4, the contract’s highest since Oct. 20 (all figures US$).

CBOT December corn dropped 2-1/2 cents to $4.78-1/4 a bushel. December wheat fell 9-1/2 cents to $5.66 a bushel.

Declines in the soy complex set the tone as rains in Brazil and Argentina eased worries about global supplies.

“There’s no need for concern right now. The rains over the weekend, especially central Brazil, were pretty good,” Daniels Trading commodities broker Craig Turner said.
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As of Thursday, soybean planting in Brazil was 40 per cent complete, agribusiness consultancy AgRural said.

Meanwhile, the U.S. Department of Agriculture (USDA) reported export inspections of U.S. soybeans in the latest week at 1,890,227 metric tonnes, in line with trade expectations for 1,650,000 to 2,500,000 tonnes. The inspections figure was slightly low, Turner said, but still above the pace needed to meet USDA’s soybean export forecast.

Soymeal futures retreated as brokers took profits after the most-active December contract set a life-of-contract high on Friday at $448.40 per short ton. The contract settled down $15.90 on Monday at $426.50.

“When you have a big market that runs up like that, you’re going have pretty big corrections too,” Turner said.

After the CBOT close, USDA said the U.S. soybean harvest was 85 per cent complete and the corn harvest was 71 per cent complete, both ahead of their five-year averages. USDA rated 47 per cent of the U.S. winter wheat crop in good to excellent condition, in line with trade expectations and up from 28 per cent a year ago.

CBOT wheat fell 1.65 per cent as grain shipments from Ukrainian Black Sea ports resumed, easing concerns that Ukrainian exports could be stifled further.

The success of Ukraine’s new Black Sea export corridor has led to a sharp increase in the number of rail wagons heading to Odesa ports, a senior railways official said on Monday.

— Reporting for Reuters by Brendan O’Brien and Julie Ingwersen in Chicago; additional reporting by Peter Hobson in Canberra and Sybille de La Hamaide in Paris.

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U.S. soymeal exports are on their way to new highs this season after a poor soybean harvest in top soymeal exporter Argentina earlier this year. Domestic soymeal users, such as hog and poultry feeders, must compete with exporters for limited U.S. supplies.

“We have a resurgence in demand in soymeal once again,” said Arlan Suderman, chief commodities economist at StoneX. “We had a break in price and that uncovered some fresh demand.”

CBOT January soybeans settled up 19-1/4 cents at $13.19-1/2 a bushel and touched a one-week high (all figures US$). December soymeal finished $12.90 higher at $442.40 per ton after notching a contract high of $448.40 per ton.

Unconfirmed chatter circulated in the markets about China cancelling purchases of Brazilian soybeans. Traders said U.S. soybeans are still more expensive than Brazilian supplies, though.

“There are rumors that China washed out some cargoes of Brazilian soybean, meaning they’ll probably be looking more for U.S. soybeans,” Suderman said. “That’s providing some support.”

Corn settled up 1 1/2-cents at $4.80-3/4 a bushel, while wheat shed four cents to close at $5.75-1/2 a bushel at the CBOT.

Wheat stumbled on news that shipping via Ukraine’s new Black Sea export corridor resumed after a three-day pause.

Ukrainian Deputy Prime Minister Oleksandr Kubrakov denied on Thursday reports by Ukrainian and British firms that the Black Sea export channel had been suspended. The headlines raised uncertainty over Kyiv’s efforts to revive export trade after Moscow in July quit an accord allowing Ukrainian grain shipments through the Black Sea.

Ukraine’s grain exports so far in the 2023-24 season have fallen to 8.72 million metric tonnes from 12.34 million a year ago, according to agriculture ministry data.

In the K.C. wheat market, December futures closed down 11-3/4 cents at $6.43 a bushel after hitting a contract low of $6.39-1/2.

— Reporting for Reuters by Brendan O’Brien and Tom Polansek in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.

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However, solid underlying demand should remain supportive on the other side, according to an analyst.

“Seasonal harvest pressure is capping gains in (soy)beans and weighing on corn,” said Terry Reilly, senior agricultural strategist at Marex in Chicago, adding that he expected prices for both commodities could trend lower in the short term.

In addition to the U.S. harvest pressure, improving moisture conditions in Argentina — where farmers are planting their next soybean and corn crops — were also being watched by market participants. Reilly said recent rains could see some farmers switch some acres out of corn and into soybeans instead. That would be supportive for corn prices, while weighing on soybeans.

The soyoil/meal spread was another feature to watch. While the balance between the two products has seen meal strengthen over the past month and oil move lower, “maybe some traders will be rethinking their long meal short oil spread,” according to Reilly.

Additional crushing capacity coming online by the end of November should result in increased meal supplies, he noted, and demand for soyoil from the renewable fuel sector “is not going away.”

From a technical standpoint, January soybeans could test the $13.35-$13.40 area if there is more export business, but seasonal harvest pressure could take values back down to the nearby low of $12.70, according to Reilly (all figures US$).

For corn, “I wouldn’t discount lower prices given the heavy U.S. balance sheet and slow export commitment pace,” Reilly said, placing nearby support around $4.55-$4.60. “But if we get some demand here in the market, there’s the possibility we could go back up and retest the $5 level.”

For wheat, Reilly expected the Chicago December contract could get back above the $6 per bushel level that it briefly tested on Friday, but added that such a move would likely bring in more farmer selling with a downside target around $5.50 per bushel.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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The November canola contract began the week at $704.60 per tonne before rising up to $725.80/tonne on Monday, then ending the week at $711.70. The January contract went in similar directions, starting at $710.10/tonne before moving up to $731.20 on Monday and later finishing the week at $718.70.

Ken Ball, trader at PI Financial in Winnipeg, blamed “aggressive manipulation” by traders in canola for the oilseed’s recent price movement.

“There was really nothing fundamental about canola. Crush margins came down very hard for a few weeks and canola was trading much stronger. While (soyoil) was going down, canola held firm. Soyoil is now starting to come up and canola’s trading much weaker. It’s been the pattern for canola all year long,” Ball said.

“Canola looks like it has a low in place and there should be some upside as long as the soy market’s going to hang firm.”

Rising soymeal prices and falling soyoil prices should cancel each other out in the long-term, according to Ball. But tightening supplies for the latter, barring a massive improvement in South American soybean crop conditions over the next few weeks, could give canola prices a boost.

“The spreaders are interactively gyrating around the margins,” he said. “Soyoil stocks are tightening up very rapidly with month after month of all-time biofuel usage…There’s a good chance soyoil is going to remain very strong here and canola will get pulled higher.”

Export demand for crops tend to ramp up during times of crisis, such as ongoing conflicts in the Gaza Strip and Ukraine, according to Ball. While he isn’t quite sure where canola prices could go over the next two weeks, he anticipates a bounce in the near future.

“A routine bounce in canola can get into that $750-$760/tonne range for the November or January contracts,” Ball explained. “Longer-term, if the soyoil stocks continue to tighten at such an aggressive pace, the game could change very rapidly if they don’t slow down biofuel usage, because stocks could get critically tight.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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Meanwhile, StatCan found the July soybean crush was slightly lower than in July 2022.

The federal agency pegged the canola crush for last month at 961,683 tonnes, up 24.25 per cent from the previous July. The previous July record was 854,510 tonnes in 2019; the overall record of 957,952 tonnes was in March 2021.

The amount of oil produced this past July rose 24.2 per cent at 402,886 tonnes, but well short of the record of 416,849 tonnes in March 2021.

Canola meal produced increased 22.5 per cent July over July at 567,153 tonnes. That as well made for a new record, besting the 545,992 tonnes in March 2023.

At 151,621 tonnes, StatCan found a 5.3 per cent decline in the country’s soybean crush. That resulted in a 6.5 per cent drop in oil produced at 28,497 tonnes and meal produced was down 5.4 per cent at 118,483 tonnes.

Table: Canada’s July crush, in metric tonnes. Source: StatCan.

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Surging soymeal values lifted soybean futures, while corn and wheat rose on worries about the future of Ukraine’s safe shipping channel for grain exports.

Chicago Board of Trade March soymeal settled up $4.60 at $504 per short ton after reaching $508.20, a contract top and the highest on a continuous chart of the most-active soymeal contract since June 2014 (all figures US$).

CBOT March soybeans settled up 1/4 cent at $15.42-3/4 per bushel. March corn ended up 4-1/2 cents at $6.85 a bushel and March wheat finished up six cents at $7.92 a bushel.

Soymeal rose on what analyst said appeared to be fund-driven buying as the front four contract months pushed to fresh contract highs. Fundamental support stemmed from uncertainty about supplies in drought-hit Argentina, the world’s top exporter of soymeal and soyoil.

Central-eastern Argentina, the country’s farming heartland, received between five and 25 millimetres of rainfall on Monday. But given the country’s persistent drought on top of high temperatures last week, the benefits will be short-lived, meteorologists said.

“Everyone celebrates any bit of rain, but everyone knows it doesn’t get them out of the drought,” said German Heinzenknecht, a meteorologist at Applied Climatology Consulting (CCA).

Corn and wheat futures climbed up as concern intensified that fighting in Ukraine could threaten the agreement for the shipping channel for Ukraine’s grain exports, which expires in March.

“We’ve seen no new developments reducing the flow of commodities out of the commodity-rich Black Sea region over the past week, but the escalating war does pose an increase risk of such occurring in the weeks ahead, tempting some fund managers to increase their ownership of grain and oilseeds,” StoneX chief commodities economist Arlan Suderman wrote in a client note.

A retreat in the U.S. dollar added support, making U.S. grains more competitive globally.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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Corn futures fell on technical selling and a bounce in the U.S. dollar, which tends to make U.S. grains less competitive globally, although U.S. corn export sales in the latest week were larger than expected. Wheat futures inched higher in back-and-forth trade.

Chicago Board of Trade (CBOT) March soybean futures settled up 14 cents at $15.34-1/4, while March soymeal rose $7.10 to end at $491.80 per short ton after setting a contract high at $493.60 (all figures US$).

March corn finished down 5-3/4 cents at $6.75-1/4 a bushel, turning lower after rising to $6.86 in early moves. Traders noted chart resistance around $6.88.

CBOT March wheat settled up 1-1/4 cents at $7.61 a bushel.

Soymeal futures climbed on worries about soy yield prospects in drought-hit Argentina, the world’s top exporter of soymeal and soyoil. Much-needed rains fell in portions of Argentina’s crop belt over the past week, but forecasts called for a return to hot and dry conditions.

“I think the weather in Argentina has hurt more than some are thinking. Maybe that’s a reason this meal market stays so buoyant,” said Sherman Newlin, an analyst with Risk Management Commodities.

Argentine officials this week said the country will take steps to help farmers hit by a historic drought, including a relief fund to tackle losses to the country’s grain harvests.

Meanwhile, ahead of the U.S. Department of Agriculture’s next monthly supply/demand report due on Feb. 8, analysts surveyed by Reuters on average expect USDA to lower its Argentine corn and soybean crop estimates. A USDA attache report released this week unofficially pegged the soybean crop at 36 million tonnes, well below USDA’s last official forecast of 45.5 million tonnes.

However, forecasters continue to project a record soybean harvest in Brazil. Brokerage StoneX this week slightly raised its forecast for the Brazilian soy crop to a record-high of 154.2 million tonnes.

CBOT corn futures turned lower despite strong U.S. export data. The USDA said sales of old-crop corn in the week to Jan. 26 totalled nearly 1.6 million tonnes, topping a range of trade expectations for 600,000 to 1.2 million tonnes. The total included sales of 319,500 tonnes to China, Newlin noted.

— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Matthew Chye in Singapore.

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“We’re actually at prices where it was in early August,” Ettner said, pointing to something of a back-and-forth shifting in the soyoil/soymeal spread.

“You have people selling the oil and buying the meal, he added, suggesting there’s little need to worry about unless the nearby May soyoil contract were to lose a couple of more cents dropping to 58 U.S. cents/lb.

As for soybeans, Ettner said pressure has been coming from “solid rains in Argentina” during the weekend, with more rain in the country’s 10-day forecast.

As for the soybean crop itself, that much-needed moisture for drought-stricken Argentina arrived in the nick of time.

“The rain is probably not going to able to raise production estimates back up to where they were, but there’s a solid case for not needing to lower them anymore,” he said.

On Wednesday, Oil Watch issued its call on the 2022-23 soybean crop in Argentina, pegging it at only 34 million tonnes. Recent projections from other sources include the Rosario Grain Exchange at 37 million tonnes, Soybean and Corn Advisor at 39 million, the Buenos Aires Grain Exchange at 41 million, and the U.S. Department of Agriculture optimistically at 45.5 million.

As for corn, Ettner said that commodity most often cools after USDA has released its January report and doesn’t follow the South American weather as much as the soybean market does.

“Corn doesn’t have too much to look forward to, in the way of major reports, until the traders start thinking about acreage,” he said.

That has been somewhat different this January, as he pointed to significant volumes in corn trading. Only on Wednesday were the volumes notably lower.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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The exchange also slashed its 2022-23 corn harvest estimate to around 45 million tonnes, down from 55 million previously.

Argentina is the world’s leading exporter of soybean processed oil and meal, and the world’s No. 3 corn exporter, but a drought that began damaging core agricultural regions in May is threatening output and delaying planting.

The 37 million tons estimated for soybeans would be the third worst soybean harvest in Argentina in the last 15 years, and the situation is likely to worsen, the exchange said.

In its monthly report, the exchange warned that losses in planting areas, especially late-planted soybeans, could skyrocket and become “massive” without “imminent help” from significant and widespread rainfall.

Argentine farmers recently ended their soybean planting period, sowing only 16 million hectares, the exchange said, 1.1 million less than forecast.

Regarding 2022-23 corn planting, the exchange said it also had to cut its estimate to a planting area of 7.3 million hectares, down from the 7.9 million it projected in December.

It attributed the slashed harvest forecast to “serious problems in sowing, stunted growth in late batches and enormous production losses in early-planted corn.”

The exchange estimated that the 2022-23 wheat cycle, whose harvest has already ended, should come in at 11.5 million tonnes, half of the 23 million tonnes produced last cycle.

The exchange said that its models suggested that rainfall over Argentina’s agricultural region remained unlikely until Jan. 18 at least.

Rainfall registered at the start of this year, it added, has not surpassed five millimetres over three-quarters of the core agricultural region — the area worst hit by the drought.

“In the long term, for February and March, the prediction that integrates 12 of the most consulted models in the world shows below-normal rainfall in Argentina,” the exchange said.

“Unfortunately, the worst behaviour would be in the centre-south of the Pampas region.”

Earlier on Wednesday, the Buenos Aires grains exchange said it could slash its corn and soybean crop forecasts by up to 25 per cent if the drought continues.

— Reporting for Reuters by Maximilian Heath; writing by Carolina Pulice.

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Wheat ended the session lower after trading near even much of the day, falling to fresh 13-month lows on strong global supplies. Corn followed wheat lower, despite support from the soybean complex.

Chicago Board of Trade’s most-active January soybeans climbed 17-1/4 cents, to $14.55 a bushel (all figures US$).

Corn ended down 3-1/4 cents to settle at $6.37-1/4 a bushel, while wheat slid 10 cents to settle at $7.29 a bushel, after falling to $7.23-1/2, the lowest level for a most-active contract since Oct. 15, 2021.

The U.S. Department of Agriculture announced that U.S. exporters sold 264,000 tonnes of soybeans for delivery China, as well as 240,000 tonnes to unknown destinations, both during the 2022-23 marketing year.

Strength in the soybean meal market added support. New life-of-contract highs were hit in every soymeal contract month, as top meal exporter Argentina faces drought conditions that are hampering soy plantings.

“Argentina is a crusher,” said Tom Fritz, commodity broker at EFG Group. “Right now, they’re holding off on planting. I think that’s helping the meal market.”

The most-active January soybean meal contract climbed $16.50 to settle at $448.60 per short ton.

The easing of COVID-19 quarantine rules in China could increase demand for soybeans.

Corn was supported by the firm soybean market, but a lack of export demand has added weight to the market, says Karl Setzer, commodity risk analyst at Agrivisor.

“We’re not seeing buyers jump into the market,” Setzer said. “The bottom line is, the United States is the most expensive corn on the global market, by a considerable amount.”

Wheat traded just above even after dropping the previous three sessions, as cheaper world supplies weigh on the market.

Pakistan bought 950,000 tonnes of wheat on Monday, with Russian supplies expected to dominate. Russian wheat export prices fell last week amid a record domestic harvest. A record wheat harvest is expected in Australia.

— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.

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