Cash markets saw positive movement as the 2016 year nears a close.
On average corn was up 1 3/4 cents, building on last week’s gains. Ethanol plants moved higher as well up 1 1/2 cents per bushel. Corn along the river broke its downward trend gaining 3 1/2 cents this week. Pork producer Smithfield Food Inc. has begun buyer grain elevators and purchasing grain directly from handlers. Last September Smithfield bought two Ohio grain elevators and now buys about 65% of its feed directly from farmers. The long-term effects on cash prices if any are yet to be know.
Soybeans saw upward movement as well this week gaining 1 1/4 cents per bushel. Crush facilities lost the momentum built over the past two weeks and lost 1/4 cents. Soybeans along the river moved higher, gaining 2 cents. Soybean exports were below expectations this week with only 974,000 MT of beans exported. USDA pegged expectations between 1 million MT and 1.5 million MT.
Grain futures saw positive movement overall this week. Corn gained 2 1/2 cents, Soybeans 8 3/4 cents, and wheat 7 3/4 cents over last week.
Wheat futures are poised for an annual decline of 13%. Record global supplies have continued to drive prices lower. Corn is set to finish the year down nearly 3% after a huge US harvest. This will be the fourth year of annual declines for corn and wheat. Soybeans are expected to break their three-year declines and gain 17% over last year.
Cold patterns in the plains and midwest put wheat on alert for winterkill in the next 2 weeks according to Commodity Weather Group. However, there are no specific threats on their models yet.
Argentina is still getting hit with rain with their wettest days expected to be Saturday through Monday this week. Rainfall is expected to be about 3 inches during those three days. Late corn and double-crop seeding will struggle in nearly half of Argentina. Dryness in Brazil is expected to slow over the next 2 weeks with scattered showers on the horizon.
Argentina is predicted to harvest 15 million tons of wheat in the 2016/17 crop year, the Buenos Aires Grains Exchange said on Thursday, up from a prior estimate of 12.5 million tons as farmers plant the grain in some areas previously dedicated to soybeans. The 2016/17 crop year is the first since President Mauricio Macri ditched the wheat export curbs and taxes. Argentine growers are expected to plant 20.3 million hectares with soy this crop year, according to the Agriculture Ministry, short of the 20.6 million hectares dedicated to soy in the 2015/16 season.
China plans to boost its reserves of farm and arable land over the next three years. China currently has about 124.3 million hectares of arable land and more than 100 million hectares of farmland. The government said it will add 1.3 million hectares of arable land, partially replacing land lost over the past 13 years.
China has not yet set import taxes for 2017 yet and expects to do so by the end of January, a customs official said. This comes among speculation that China has ditched tariffs for U.S. and Brazilian importers. The 5% tariff was introduced at the start of this year and is set to expire December 31.
A rise in US inventory has helped stall the upward trend in oil prices that has pushed global crude prices to their highest levels since July of last year. Many analysts expect oil prices to continue moving higher in early January.