3 Big Things Today, November 25, 2020

Grains, Soybeans Slightly Lower Overnight; Brazil Long-Term Precipitiation ‘Inconsistent.’

1. Grains and Soybeans Slightly Lower in Overnight Trading

Grains and soybeans were modestly lower in overnight trading as investors weigh the lack of large export sales recently against dry weather in parts of South America.

Exporters have reported sales of 100,000 metric tons of corn in the past week but no large sales of soybeans in more than two weeks, according to the U.S. Department of Agriculture.

A sale of 334,000 metric tons of corn was reported on Monday, and sales totaling 289,270 metric tons of the grain were reported on Friday, the government said. On Nov. 18, a sale of 140,000 metric tons of corn to an unnamed country was reported.

The last time a sale of more than 100,000 metric tons of soybeans was reported was on Nov. 9, the USDA said. Exporters are required to report export sales topping 100,000 metric tons of a single commodity.

Demand, however, had been strong until the recent dry spell, which could be underpinning prices.

Also keeping futures from falling too far are concerns about dry weather in parts of South America.

Rains yesterday were near expectations in growing areas in Brazil, and some rains this week should favor the states of Mato Grosso, Goias, and Minas through Thursday, forecaster Maxar said in a report on Tuesday.

Still, dryness and crop stress will increase in central and northwestern growing areas of the South American country, Maxar said in its report.

Soybeans earlier this week hit the highest price in more than four years while corn reached a 16-month high.

Corn futures for December delivery fell 2¢ to $4.30½ a bushel overnight on the Chicago Board of Trade.

Wheat futures for December delivery lost ½¢ to $6.17 a bushel while Kansas City futures declined 1¼¢ to $5.69½ a bushel.

Soybean futures for January delivery fell ¼¢ to $11.91 a bushel overnight. Soymeal was up $1.90 to $398.80 a short ton, and soy oil added 0.21¢ to 37.93¢ a pound.

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2. Long-Term Weather Outlook Shows ‘Inconsistent’ Rains in Brazil

The long-term outlook for Brazil and Argentina looks ominous while precipitation for wheat in the U.S. Plains is expected to be limited, according to Commodity Weather Group.

Rainfall in Brazil, the world’s biggest exporter of soybeans, is expected to be “inconsistent” throughout the South American summer, increasing crop risks because of lower soil moisture reserves, the forecaster said in its Ag Seasonal Outlook report this week.

In Argentina, the risk of corn and soybean losses is increased due to continued heat and dry weather, CWG said.

“Greater odds for persistently hot (and) dry weather conditions to prevail in much of Argentina (or) Uruguay, with notable corn/soy/rice losses,” the report said. “Most persistent dryness in Brazil extends into corn/soy/rice areas of Rio Grande do Sul.”

In the U.S., meanwhile, precipitation will be limited in the central and southern Plains, the forecaster said, where hard-red winter wheat is overwintering.

Winterkill chances are limited due to a lack of more widespread cold weather, but there are still concerns for the winter-wheat crop, CWG said. The dry weather is expected to impede wheat growth.

Spring rains are expected to be almost normal in much of the eastern Midwest, eliminating concerns about wetness in the region, but in the western Midwest the weather patterns are forecast to be drier, the group said in its report.

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3. Strong Winds, Freezing Fog May Develop in Parts of Oklahoma and Arkansas

Strong winds are expected and some freezing fog may develop in parts of northeastern Oklahoma and northwestern Arkansas today and tonight, according to the National Weather Service.

Winds will gust frequently to 25 to 35 mph today and some patchy fog or some freezing fog may develop late Wednesday night, the NWS said in a report early this morning.

Farther north in eastern Iowa, meanwhile, it’s going to be a wet day today, though rain and fog will lift heading into Thanksgiving Day.

The only thing in the forecast for the area overnight is perhaps some fog that could be dense at times, the agency said.

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