March corn traded lower on the day as traders took profits for the second day in a row and on steady to slightly negative outside markets.
The weaker trade was also linked to week and month end positioning. Supply fears around the globe continue to offer a solid foundation of support but export demand has been disappointing which is limiting the upside potential of the market in the short term.
The situation on the Mississippi River is worsening with weather forecasters calling for little to no rainfall in the near term to help stabilize water levels. Basis bids have firmed south of St. Louis as traders scramble to get ownership of supplies.
The weather forecast for Argentina continues to be too wet which is delaying corn plating. If the slow pace of planting continues, some analysts believe corn acreage may shift over to soybeans.
This could be a positive for corn prices long term as the world market is counting on record supplies out of South America.
January Rice finished up 0.16 at 15.27, equal to the high and 0.05 up from the low.
Soy Futures Closed Lower
January Soybeans finished down 9 1/4 at 1438 3/4, 13 1/4 off the high and 9 3/4 up from the low. March Soybeans closed down 8 1/2 at 1432 1/2. This was 10 1/2 up from the low and 11 3/4 off the high.
December Soymeal closed up 0.8 at 443.5. This was 5.8 up from the low and equal to the high.
December Soybean Oil finished down 0.36 at 49.41, 0.46 off the high and 0.23 up from the low.
January soybeans traded lower on the day but managed to close off the low end of the daily range. Meal saw modest gains while oil was lower on the day.
Weakness in the corn and wheat market added to the negative sentiment. Outside market volatility and a somewhat favorable weather forecast in South America has limited the bull camps ability to push futures higher in the short term.
However, strong soybean demand and the fact that the US has already sold the entire soybean oil USDA export estimate for the marketing year is offering support.
Basis held near a 3 month high in the Gulf of Mexico as traders scramble to get their hands on available supplies on the Mississippi River.
Rainfall is expected to be light in Midwest over the next 2 weeks which could drop Mississippi River water levels even further and may disrupt barge traffic.
China domestic crush margins have turned positive in the last couple weeks which could boost Chinese purchases of US soybeans before year end. The strong demand from China could limit the downside of the market in the coming weeks but high market volatility is expected.
Wheat Futures Closed Lower
December Wheat finished down 24 1/2 at 844 3/4, 25 off the high and 3/4 up from the low. March Wheat closed down 22 at 863 1/2. This was 1 up from the low and 23 1/2 off the high.
March Chicago wheat led the all three wheat markets lower on the day. KC and Chicago wheat both saw double digit losses. Thoughts that the recent run higher in prices was overextended triggered a round of profit taking in the last 48 hours.
Chicago and KC wheat continue to struggle in the global export market as prices are overvalued relative to other world origins.
Syria and Jordan still have tenders pending and Japan's Ministry of Agriculture bought a total of 149,481 tonnes of food wheat from the US and Australia yesterday.
The western plains forecast continues to offer support to the KC market with no favorable precipitation for the next two weeks which may accelerate the drought conditions in the west.
Weather maps call for light rainfall in the eastern Corn Belt and Delta next week and again in the 8-15 day forecast. Ohio has been trending drier as of late so the precipitation should be beneficial to soil moisture conditions.
Long term support in the wheat market is linked to poor weather conditions but soft export demand continues to limit gains.
December Oats closed unchanged at 360 3/4. This was 10 3/4 up from the low and equal to the high.
