Soybeans, a hot commodity
It's the hot commodity these days in the grain pits, with new recent highs this week putting the spotlight on the soybeans. Corn and wheat are struggling a little more as their export market is not very alive at all. But soybeans, ah soybeans, they have an export market that is red hot right now. Export sales and shipments of 50 mb/week continue to rack up strong export demand for this commodity, with China leading the way buying 50-65% of these exports every week. The soybean export market is hot all right! Its not often that soybean exports exceed corn and wheat combined, but some weeks we are actually doing that so it is indeed a strong export market. West coast terminals are loading/unloading soybean trains instead of corn trains recently, an unusual event for sure in the West Coast market.
But the soybeans are selling like hotcakes, and it doesn't take much to see where this export train is heading. USDA projections continue to rise for soybean exports, and the US is likely the only game in town until the South Americans start exporting their new crop market again in March/April. For now, the US dominates the soybean export activity, and it is indeed very good for the US soybean market.
Not only is the export market strong for soybeans, but also the dollar is weak (new lows again this week) along with a strong gold market (new highs again this week) that are continuing to add to the strong fundamentals of the soybean market.
On the negative side for soybeans, harvest has accelerated to the point where 94% of the crop is now (finally!) harvested, almost equal to the pace of the normal harvest (97%). The threat to the US soybean crop might finally be over, with the soybean crop mostly harvested in the corn belt and only a few areas still struggling (like the Red River Valley of ND/MN, where soils are still too wet in many locations to support combines). What damage has been done is now history, and the soybean crop has finally been harvested in most corn belt locations.
Corn harvest is still slugging along, with 68% now harvested Nov. 22 vs. the 94% that is usually done at this time. The slow pace is mostly due to the still very wet corn crop, with growers still struggling to get it harvested, and struggling even more to get it dried after harvesting it. This is indeed a problem, as the lateness of the crop development and the awful October have left us with less drying days to get the crop dried down. We just don't dry as well in November as we do in October, when temps are warmer and the days are longer.
The struggle continues with corn harvest, but the market seems more comfortable with corn's situation as exports are poor thus far for corn. There seems to be plenty of feed grains available to the world for now, so the market is content to let the corn production flow into ethanol and feed chains for now. The export market right now must improve immensely in future weeks to meet the current USDA export projection. We just aren't selling or shipping much corn for now. Will it increase after the South American harvest, which includes less corn in their rotations? Perhaps the US will get a larger corn export market share? Or is there enough feed wheat, barley, and oats in the world where importers will not want to pay to ship US corn to them? This is still a question mark when it comes to the corn market.