The crop consultant who specializes in South America said soybean planting in Brazil has dramatically turned around to being the second fastest on record at 54 per cent complete for early November. Cordonnier pointed to the above average rainfall Brazil received in October following a very dry September.

“The soybeans are germinating and emerging uniformly. The crop is in good condition for what’s up already,” he said, noting he’s very optimistic about the crop, projecting it to be 165 million tonnes.

“That might go up if the weather continues to co-operate,’ Cordonnier added.

As for Brazilian corn, he said the country’s first crop was 59 per cent planted, with some states such as Parana almost finished.

Cordonnier estimated that first crop at 23 million tonnes and the second crop, known the safrinha crop and planted in January and February, at 100 million tonnes.

“The concern was a month ago everybody thought the soybeans would be planted extra late and there wouldn’t be enough safrinha corn. That scenario has changed somewhat,” he explained.

Cordonnier said he’s not as optimistic when it comes to Argentine soybeans and corn.

“The weather in Argentina has not caught on as good as in Brazil. They’ve been having light to moderate showers,” he said, adding that’s the weather outlook for the next two weeks.

While soybeans planted in Argentina was only 3.3 per cent finished, Cordonnier said corn planting was at 34 per cent done.

A major benefit to Argentina corn so far this year he stressed was the estimated 90 per cent decline in corn leafhoppers compared to last year.

In 2023/24, corn leafhoppers spread spiroplasma disease that cut into the country’s corn output and made growers wary about this year’s crop.

“A month or two ago, everybody including myself thought farmers would reduce their (corn) acres because they were afraid of the leafhoppers and low prices,” Cordonnier commented.

But with improving weather, far fewer corn leafhoppers and prices beginning to rise, he suggested there could be more corn seeded in Argentina in 2024/25 than initially anticipated.

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According to the Ecuador-based International Center for Research on the El Niño Phenomenon (CIIFEN) and the Peruvian meteorology and hydrology agency SENAMHI, the recent El Niño was among the five strongest since 1950.

“The pattern has changed a lot,” said Yolanda Gonzalez Hernandez, director of CIIFEN, at a press conference after a meeting of experts from the region in Lima on climate.

“Where before there was no significant impact of the El Niño phenomenon, now they are occurring with more intensity.”

Gonzalez said temperature changes from one to the other will be faster, with a La Niña expected for the second half of this year, replacing the El Niño that is starting to weaken.

El Niño and La Niña hit different parts of the world distinctly. In Latin America they have affected crops such as wheat, soy and corn, damaging regional economies often highly dependent on farming.

“We are permanently breaking records at the local, national and global level in temperature anomalies,” said Gonzalez.

Temperatures are estimated to be above normal in much of South America, although below normal on the coast of Ecuador, northern Peru, and southern Argentina and Chile.

With the recent El Niño, Peru had the warmest winter in the last 60 years, according to CIIFEN, while in Colombia, temperatures reached records in different parts of the country.

Argentina and Chile saw more rain, which in the former helped soy and corn production after a drought the year before.

—Reporting for Reuters by Marco Aquino and Reuters Television

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Contracts for corn, soybeans and the three major United States wheat varieties were all lower during the week, mostly stuck in an ongoing grind downwards. However, they were given some relief as corrective buying on Jan. 30 provided some much-needed strength.

Ryan Ettner of Allendale Inc. in McHenry, Ill. said there were still residual effects from the U.S. Department of Agriculture’s January monthly supply/demand estimates released on Jan. 12. In that report, corn and soybean production estimates were raised, causing a bearish reaction in the markets. Low export figures for U.S. wheat have also been pulling prices down.

“You have larger yield increases for corn and soybeans than expected and at the same time, exports were left alone (in the report),” he said. “I don’t know if exports have really dramatically slowed more than expected recently, but I think the bigger thing is we thought we were ahead of things.”

The U.S. Federal Reserve announced on Jan. 31 that its key interest rate will remain unchanged with the expectation of rate cuts later this year. However, both the Fed’s announcement and the ongoing tensions in the Middle East don’t seem to have any effect on prices, according to Ettner.

One aspect that could affect prices, however, is early harvest reports from South America. Any figures outside trade expectations could pull corn and soybean prices one way or another.

“If there’s any kind of disappointment from early harvest reports, that can make an impact,” Ettner said. But it’s a grind lower unless we hear news otherwise. It’s pretty much the lull we’re in until at least the end of February. Once you move to (multi-year) lows, that grind lower is going to slow down quite a bit. We would slowly pick up exports.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man. 

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Corn futures hit their lowest in more than a week and wheat notched a one-week low as declines in crude oil CLc1 and a stronger U.S. dollar added to bearish sentiment in grains.

Chicago Board of Trade (CBOT) March soybeans SH24 settled down 15 cents at $11.94-1/4 per bushel after dipping to $11.91-1/2, the lowest on a continuous chart of the most-active contract Sv1 since November 2021.

CBOT March corn CH24 ended down 6 cents at $4.40-1/4 a bushel and March wheat WH24 was fell 6-3/4 cents to finish at $5.93-1/2 a bushel.

Soybean futures sagged as traders focused on rising expectations for large crops in Argentina and Brazil despite periods of stressful weather in both countries.

“Fear about weather in South America has gone, which in turn leads to worry about lack of demand for U.S. soybeans and corn. Should soybean demand from China return in the near future, this is likely to be met with Brazilian supplies,” said Matt Ammermann, StoneX commodity risk manager.

Chinese demand for commodities seemed less certain, analysts said, as a real estate crisis deepened with a Hong Kong court ordering the liquidation of property giant China Evergrande Group.

“With the China economic news, there is still a worry about their economy over there. That is part of the problem today,” said Sherman Newlin, an Illinois farmer and analyst with Risk Management Commodities.

Soy product futures were mixed. As soybeans declined, March soybean oil futures BOH24fell 2.9 per cent while March soymeal SMH24 bounced to end up 1.5 per cent after setting a life-of-contract low.

Russian wheat export prices continued to decline last week amid oversupply pressure in the Black Sea region, but export volumes have gone up, analysts said.

–Additional reporting for Reuters by Michael Hogan in Hamburg and Peter Hobson in Canberra.

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Corn futures set a three-year low, while wheat ended nearly unchanged after touching a seven-week low on Tuesday.

Traders monitored production potential and exports from Brazil, the world’s top soy supplier, as rains recently improved conditions for South America’s soybean and corn crops.

Analysts have slashed forecasts for Brazil’s harvests due to earlier drought damage.

However, February and March shipments of soybeans to China, the world’s biggest importer of the oilseed, are cheaper from Brazil than from the U.S. Gulf, said Arlan Suderman, chief commodities economist for broker StoneX.

“That tells me that Brazil is not concerned about the size of their crop,” Suderman said. “The world can get it a lot cheaper from Brazil right now.”

The CBOT’s most actively traded soybean futures Sv1 ended down 21-1/2 cents at $12.05-3/4 a bushel. They finished close to the session low of $12.05 and near Friday’s two-year low of $12.03.

Corn futures Cv1 slipped 1-1/4 cents to close at $4.42-1/4 per bushel after falling earlier to $4.40, the lowest level since December 2020.

“Expectations of big crops in South America have got everyone running for the hills,” said Ole Houe at IKON Commodities in Sydney.

Corn also remained under pressure after the U.S. government on Friday raised its U.S. yield estimate to a record high and said domestic stocks in December were up 13% from a year earlier.

Gains in the dollar and a risk-off trading mentality also loomed over agricultural markets, said Matt Wiegand, commodity broker for FuturesOne. The dollar index hit a one-month high, making U.S. farm products look less attractive to importers.

“You’ve had a massive dollar spike to start the week,” Wiegand said. “That’s certainly not helping.”

Most-active CBOT wheat Wv1 settled up 1/2 cent at $5.82-1/2 per bushel, while deferred wheat contracts weakened.

–Additional reporting for Reuters  by Gus Trompiz in Paris and Peter Hobson in Canberra.

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The January canola contract closed at $702.30 per tonne on Wednesday a weekly loss of $7.40. The contract fell below the $700 level on U.S. Thanksgiving on Nov. 23, a day with little volume.

However, Ball said, canola is trying to recover.

“There’s nothing all that exciting to look at,” he said. “It’s going to hinge exclusively on how well the (soyoil) will do.”

While Ball said a slower export pace than last year will put some pressure on canola prices, he cautiously thinks there could be some strength in both canola and soyoil in the short-term.

“Weather is going to come into play a lot, because the soybean market has been well supported by soymeal prices. But if the South American rainfall comes through over the next four to six weeks, that’s going to break the meal market and the bean market could fall off a lot,” he added.

“I think canola could rebound $20, $30, $40/tonne if soyoil could maintain its strength.”

Ball also believes the upcoming crop production report from Statistics Canada on Dec. 4 may already be affecting prices on ICE Futures.

The average trade estimate for this year’s crop was 18.3 million tonnes, derived from a range between 17.2 million and 19.7 million. In 2022-23, Canada produced 18.7 million tonnes.

“The general feeling is that this year’s crop is not that far off from last year. There were some poor areas; some good areas. Some areas improved; some didn’t,” he said.

Canola, he added, “seems a bit reluctant at times to go up. It’s lagging behind the (Chicago soy complex) a bit, which is not uncommon… but traders may be a little bit leery in buying canola if there is indeed a large upswing in production expected.

“If we do get a number around 18.3 million… that may keep the market somewhat subdued.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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With traders in the United States moving to the sidelines for the U.S. Thanksgiving holiday, activity should be thin and choppy until next Monday.

Speculators moving money around accounted for much of the activity, with movement in the Chicago soybean market in reaction to Brazilian weather forecasts another feature.

“It’s purely technical and we’re waiting to see how the (South American) weather develops,” said commodity futures specialist Jamie Wilton, of RJ O’Brien in Winnipeg.

While canola fell on Wednesday, the nearby trend is still pointing higher, according to MarketsFarm analyst Mike Jubinville.

With speculative fund traders holding a large net short position in canola, he expected the January contract would need to close above $735 per tonne to trigger a more sustained move higher, with $750 the next upside target.

The 200-day moving average around $741 per tonne was another chart point to watch, according to Wilton, with the nine-day exponential moving average around $709 a key support level.

“Monday will be key,” according to Jubinville, who expected U.S. traders returning from the Thanksgiving holiday would look at the South American situation and set the direction of the oilseed markets going into December.

“It will just be modest shifting of fund positions until we see a real signal from a chart perspective, and we have not seen that signal yet,” he said.

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

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Capinegro said the December corn contract has been unable recently to stay above US$5 per bushel.

“Basically it’s in no man’s land. I don’t know what’s going to drive it anymore,” he stated, noting a lack of fresh bullish news.

When it came to soybeans, Capinegro placed resistance for the November contract at around $13.20-$13.30/bu. (all figures US$).

“The [soy] complex is being led by meal, it has been for a good week and a half. If you want bullish beans, then you want meal to be the leader,” he explained.

As for wheat, Capinegro was flabbergasted by that complex’s erratic nature of late.

“One day up, one day down. It just drives you nuts,” he said.

One source of support for CBOT commodities has been low water levels on the Mississippi River.

“It’s hard to get any barges to move when you got that river that low,” he said, but noted levels improved somewhat. However, he said, dry conditions of the U.S. Midwest have meant insufficient water to bring the river much higher.

Also he pointed to the low water levels for vessels using the Panama Canal, which has slowed global traffic.

Capinegro said the trade has been keeping a keen eye on the weather in South America. He said northern Brazil has been wet while the south has been dry, with both causing problems for planting.

Markets have also been watching the lead-up to next week’s presidential election in Argentina.

“With their inflation and interest rates, their farmers are not selling. They want to see what happens in the election,” Capinegro said.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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Trading was choppy and subdued before the U.S. issues its monthly world agricultural supply and demand estimates (WASDE) report on Tuesday (Sept. 12).

“It’s just simple consolidation, basically ahead of next Tuesday’s WASDE report,” said Karl Setzer, brokerage research lead for Mid-Co Commodities.

“When we have these early-week WASDE reports, you tend to see — the Thursday, Friday beforehand — the consolidation and shoring up of positions.”

Most-active wheat futures ended down four cents at $5.95-3/4 a bushel (all figures US$). The contract earlier fell to $5.90-1/2, its lowest price since May 31.

Poor overseas demand for U.S. supplies hung over the market, analysts said. Traders also assessed ongoing efforts to preserve exports from war-torn Ukraine.

In CBOT soybeans, futures closed up 3-1/2 cents at $13.63 a bushel, after touching their lowest level since Aug. 23 at $13.52-1/2. Corn slipped 2-1/2 cents to $4.83-3/4 a bushel.

Expectations for large supplies from South America limited gains in soy futures, as traders awaited a clearer picture of upcoming U.S. harvests, analysts said.

The Buenos Aires grains exchange on Thursday forecast Argentina’s 2023-24 soybean crop at 50 million metric tonnes, more than double last year’s level, and a rebound in corn output.

“The pressure (on CBOT prices) was partly due to improved U.S. weather forecasts and optimistic crop forecasts in South America,” brokerage Copenhagen Merchants said in a note.

China has recently bought Brazilian soybeans for October and November delivery, brokers said.

Still, the U.S. government on Friday said exporters sold 121,000 tonnes of U.S. soybeans to China for delivery in the 2023-24 marketing year. Weekly U.S. soybean export sales for 2023-24 were 1.78 million tonnes in the week ended on Aug. 31, within estimates for 1.4 million to two million tonnes.

— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz, Naveen Thukral and Peter Hobson.

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The Black Sea grain deal, which allows the safe passage of grains through three Ukrainian ports, was extended on May 17 for two months — a shorter time than expected.

“The corridor is definitely not performing as it was at the beginning,” Jan Dieleman, president of Cargill’s ocean transportation business, told Reuters.

“It’s more focused on the smaller (ship) sizes now… I do think that with some quite big crops in Brazil, you might also see some of the demand being switched out of the Black Sea into Brazil at some point, on corn, for instance.”

Record production of both corn and soybeans in Brazil in the current 2022-23 season has led to strong demand for vessels in South America.

Dieleman said if the Black Sea grain corridor deal ended, the price impact would be less “simply because it is a smaller (export) program already.”

“The grain market is not the same as it was a year ago.”

Dieleman added that the Black Sea area was “still a war zone and ships are being attacked and it’s not business as usual.”

This week, President Vladimir Putin said Russia was considering withdrawing from the deal, which was also brokered by Turkey. He alleged the West had cheated Moscow by not delivering on promises to get Russian farm goods to world markets.

The appetite of western companies to ship Russian grains out of the Black Sea was expected to weaken going forward.

In March Cargill said it would no longer handle Russian grain exports from July, although the shipping unit has said it will continue to carry grain from the country’s ports.

Other leading traders, including Louis Dreyfus and Viterra, have also joined the Russian grain export exodus in recent months.

“It has become more complicated for us,” Dieleman said. “Our activity is clearly less.”

Cargill is one of the world’s biggest charterers of dry bulk ships.

Dieleman said shipping activity from Russia was being replaced by a shadow fleet of ships that were not chartered in the same way as in international markets.

“We see more of the grey/black fleet moving more stuff as well. That is taking a bigger share of the exports at the moment,” he said.

“There is still a bit of self-sanctioning going on in this market, and people don’t want to get involved unless they have to.”

— Jonathan Saul is a Reuters correspondent in London, England.

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