A greatly over sold Chicago soybean market weighed on US grain futures last night. Soybeans saw the second softer close since November 3rd. Technically soybeans may come under short term pressure but fundamentally there remains good global support for US soybeans and the by-products. Selling in beans dragged both corn and wheat futures lower. Corn wasn’t terribly over bought but could come under some technical pressure leading into the last few weeks of life of the December contract, as could wheat. Wheat is far from over bought though, it’s technically over-sold and continuing south. This may see a bounce in wheat next week depending on whether corn and beans can sort their charts out.
Fundamentally wheat is more bullish than bearish at this level. Prices from alternative sellers into Asia continue to make Aussie wheat look cheap. The Rosario Exchange in Argentina cut wheat production estimates again. Now pegged at 16.7mt, that’s a fair way below the WASDE number of 18mt that came out earlier in the week.
Pakistan announced another milling wheat tender for 400kt. This follows on from a purchase of 320kt last week.
Russia implementing export quotas on all grain between February and July next year is probably worth noting. From the outside one might wonder why Russia is so worried about domestic stocks. There’s a good chance their wheat stocks will actually be higher leading into next season according to official data…..or will it. USDA project wheat ending stocks will have moved as so, 20/21 = 10.73, 19/20 = 7.23mt, 18/19 = 7.78mt. Black Sea prices continue to be firm (depending on USD/RBL) maybe things are tighter than they appear.