Global Corn, Wheat, and Soy Markets: Weekly Insights & Price Outlook

Published 22-12-2024, 04:41 pm

Corn: Holding Steady Amid Mixed Signals

Corn markets grappled with mixed momentum this week as they struggled to regain traction following the WASDE report. March corn managed to claw back much of its post-WASDE losses, but the lack of fresh bullish inputs and pressure from the soybean market kept gains in check.

China’s Customs General Administration reported a sharp 91.8% year-over-year drop in November corn imports, with year-to-date imports nearly 40% behind 2023. While China’s diminished appetite for corn is well known, the data added a bearish tone to trade.

In contrast, U.S. export data brought some positive news. Weekly export inspections reached near marketing-year highs at 1.129 million metric tons (mmt), though cumulative exports of 13.621 mmt remain 25% behind USDA’s implied pace. Export sales hit 1.177 mmt, above the marketing week average of 1.048 mmt. Ethanol production also exceeded expectations, marking its sixth consecutive week of record output and reinforcing the likelihood of surpassing WASDE’s projection of 5.500 billion bushels (bbu).

U.S. corn export sales reached 46.2 million bushels (mbu), 7% ahead of the pace required to meet USDA’s projection of 2.475 billion bushels (bbu). However, competition from Argentine and Ukrainian offers remains strong. While sales to Mexico are 40 mbu higher than last year due to drought-related production problems, the final export tally will depend heavily on South America’s crop size and pricing in the latter half of the marketing year.

Global dynamics also highlighted a mixed picture. Argentina’s corn crop showed improvement, with 46% rated good/excellent versus 40% last year, and plantings at 66% complete versus 59% last year. Brazil, buoyed by a favorable USD/REAL exchange rate, is preparing for maximum planting capacity with minimal weather stress reported.

Price Outlook
As 2024 draws to a close, the corn market appears set to maintain its current landscape. Holiday trading could lead to exaggerated price moves, but significant reports, such as corn crush data, will only emerge in early January. Managed money is likely to rebuild long positions, supporting prices above $4.30 per bushel. Upside resistance is expected at $4.52 and $4.60. 
 
Wheat: Searching for Demand in a Competitive Landscape
Wheat markets endured significant pressure this week, with SRW wheat leading the declines, shedding 40 cents post-WASDE highs. HRW and spring wheat also declined by 30.5 cents and 28.25 cents, respectively. Strong competition from Russian and Southern Hemisphere exports, coupled with a strengthening U.S. dollar hitting a two-year high, further impeded U.S. wheat’s competitiveness.

On the global front, Germany’s winter wheat acreage increased by 12% year-over-year, and Coceral raised the 2025 EU wheat crop estimate to 140.4 mmt, driven by improved acreage and yield prospects. FranceAgriMer’s upward revision of 2024/25 wheat stocks from 2.79 mmt to 2.87 mmt also contributed to the bearish sentiment.

USDA’s weekly export sales provided a glimmer of hope, with 458,000 mt reported, ending a streak of below-average sales. However, cumulative exports are still 7% behind USDA’s pace. Notably, Russia’s reduced export quota from 11 mmt to 10.6 mmt offers some potential for U.S. wheat to capture demand, albeit in a highly competitive environment.

Price Outlook

The wheat market faces ongoing challenges as global buyers prioritize cheaper origins. While U.S. wheat may see a bottom form if importers shift focus, extending the downside to $5.10-$5.15 in March SRW appears likely in the near term. Signs of U.S. wheat gaining demand could stabilize prices as 2024 concludes.

Soy: Pressured by Bearish Fundamentals
Soybeans led the grains lower this week, facing headwinds from seasonal export declines, a robust South American crop outlook, and fund-driven selling. While November NOPA crush data set a record at 193.2 mbu, surpassing the previous November high, it wasn’t enough to offset bearish sentiment.

Weekly export inspections dropped slightly to 1.676 mmt, though cumulative exports remain well ahead of pace with over 25 mmt shipped this year. Export sales totaled 1.424 mmt for soybeans, 261,600 mt for meal, and 6,000 mt for oil, showcasing strong demand. However, Brazil’s FOB discounts and an increasingly competitive REAL continue to challenge U.S. soy’s global appeal.

South American weather remains favorable, with Argentina’s soybean crop rated 66% good/excellent versus 37% last year. Plantings are at 77% completion compared to 60% last year. The next six weeks will be critical as Brazilian soybeans begin entering ports, potentially pressuring U.S. exports further.

Price Outlook
Soybean prices are expected to face continued pressure as the year-end approaches. While rumors of Chinese buying offered a brief recovery, the lack of substantial weather threats in South America and growing bearish fund positions suggest a reversion towards the $9.50 area. Confirmation of Chinese buying could provide short-term support but would need to be significant to alter the current trajectory.

Conclusion

The global grains and oilseeds markets remain highly dynamic as 2024 concludes, influenced by mixed signals from trade, export competition, and evolving weather patterns. While corn holds steady, wheat continues its search for demand, and soybeans face bearish pressures. As we enter the holiday season, market participants should brace for potential volatility driven by speculative positioning and shifting global dynamics.

Disclaimer: The views expressed in this article are solely those of the author, who has spent over a decade analyzing the grains and oilseeds markets. With a deep understanding of global agricultural market dynamics, the author offers insights based on extensive experience in trade analysis and market trends. While every effort has been made to ensure the accuracy of the information presented, the views shared are subjective and reflect the author’s perspective on the evolving global grains market.

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