Soybean demand is 24 percent ahead of USDA predictions so far this season. Weekly soybean export sales exceed market expectations by nearly 35 percent at 1.349 million tons last week.
Palm oil prices rose 2 percent last week.
Argentina’s soybeans are 44 percent planted, but weather has been unfavorable for crop development. Planting in parts of Brazil has been delayed by rain.
Soybean markets are technically overbought. Soybean prices are expected to gain on corn. If that trend goes into planting season, corn acres will drop. Traders are buying soy oil and meal as feed demand increases.
Delayed harvest and quality problems associated with wet grain and diseases are bullish for corn. Corn harvest continued at a normal pace last week. With 90 percent of soybeans harvested, farmers paid more attention to corn.
Farmer selling of corn increased. Wet grain is difficult to store without quality losses. Farmer selling will limit upside price potential. Markets expect most of this crop to be sold.
Exports are slow, but Mexico increased exports substantially after drought conditions reduced corn production there. Chinese feed demand is increasing as their hog herds and chickens increase. This is bullish for corn and soybeans.
Corn export sales last week were below market anticipations at 353,000 tons. Total seasonal sales are 7 percent behind the USDA forecast.
Traders are speculating the EPA may increase ethanol fuel blend standards. Any increase in ethanol use will significantly affect corn prices.
United States export demand for wheat has dropped. Buyers are concentrating on lower-priced wheat from Asia and Europe. Another factor is the increase in ocean freight prices.
Weekly export sales met low expectations at 362,400 tons. Wheat sales are 8 percent below predictions this season.
Increased feed use will support wheat prices by taking more corn supplies out of circulation. Lower dollar values are making U.S. wheat more competitive on the world market. Higher ocean freight will continue to limit exports if oil prices continue higher. Asian and European wheat have the market for now. Trading volume declined during Thanksgiving week.
Demand for rice is fundamentally more positive. Vietnam export supplies have been exhausted until the next harvest. Thailand has large supplies available at lower prices than U.S. rice but ocean freight rates make that rice less competitive in the western hemisphere.
Central and South America are buying U.S. rice. Asia is the main supplier for rice demand from the Philippines and India where weather caused severe crop damage. Japan is increasing the amount of rice in storage.
Rice technical charts are mixed. Technical charts are a short-term market indicator. Current prices reflect increased world demand. The expectation is that rice prices will increase through planting next season but this is not certain.
Asia has another rice crop to harvest and Thailand supplies are near 6 million tons. Growers should consider pricing some of the next crop unless the news turns more bullish.
Markets are recognizing fundamental changes in cotton supplies. Not only is world production below earlier expectations, quality problems are significant. The United States and China both have lower-than-anticipated production and carryover. The quality of this year’s cotton is lower across the northern hemisphere.
Harvest has been severely delayed.
The pipeline is getting thin. Traders recognize the upcoming shortage. Carryover in the United States is now expected to drop below 5 million bales. A similar situation is expected in China. Only India anticipates increased cotton supplies.
Weekly export sales of cotton were 235,700 bales. This number is not particularly high, but it did exceed market expectations last week. Cotton sales for the season remain 5 percent behind USDA predictions.
Weather continues to support prices. World stock markets are supporting anticipations of increased demand. Investors continue to buy commodities anticipating inflation.
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