On Thursday, November 21 (Beijing time), the CBOT grain futures market displayed a mix of bullish and bearish trends. Wheat and corn prices rose due to geopolitical tensions and ethanol demand, while soybeans and related products saw notable declines driven by supply pressures, with soybean oil prices also sharply falling.
Wheat: Geopolitical Tensions Prompt Moderate Price Rebound
Wheat futures rebounded due to escalating tensions between Ukraine and Russia, with concerns over the safety of grain exports from the Black Sea region providing short-term support due to supply risks. CBOT March soft red winter wheat (WH25) closed at $5.72-1/4 per bushel, up 4-1/2 cents.
Additionally, Taiwan's purchase of 80,000 tons of U.S. wheat and Algeria's increased import of durum wheat injected momentum into the market. However, improved rainfall in the U.S. Plains has enhanced crop growing conditions, which is expected to suppress long-term price gains. The market exhibited overall caution, with price reactions not yet amplifying significantly.
Corn: Ethanol Demand Boosts Rebound
CBOT December corn (CZ24) closed at $4.30-1/4 per bushel, up 3 cents. Despite a slight dip in U.S. ethanol production last week to 1.11 million barrels per day, it remains near historical highs, supporting domestic market demand. Ethanol inventories increased to 22.563 million barrels, reflecting active production. Additionally, Algeria's feed corn purchase further boosted export expectations.
In the short term, corn prices are expected to fluctuate around $4.30, but export competition pressure from Brazil and Argentina may limit gains.
Soybeans and Related Products: Market Pressured by Excess Supply
Prospects of a bountiful South American harvest dragged soybean futures lower. CBOT January soybeans (SF25) closed at $9.90-1/2 per bushel, down 8 cents to a two-week low. Brazil's 2024/25 soybean production is projected to reach a record 167.7 million tons, further depressing market price expectations.
Soybean oil prices were weak, with December soybean oil (BOZ24) plunging 3.5% to 43.28 cents per pound. Malaysia's increased export tax on crude palm oil to 10% pressured the global vegetable oil market. Although the U.S. Department of Agriculture reported over 400,000 tons of new soybean export orders, half destined for China, it was insufficient to reverse market downturns.
China's soybean imports from Brazil in October reached 5.53 million tons, far surpassing imports from the U.S., exacerbating competitive pressure on U.S. soybeans in the international market.
Market Basis and Export Dynamics
Basis data shows export demand remains weak. November soybean CIF barge basis is 92 cents over January futures, with December basis down to 85 cents. For corn, November barge basis is 79 cents over December futures, with a slight rise to 81 cents in December, indicating resilient domestic spot demand.
In export dynamics, China's new orders and those to unknown destinations provide support for soybean exports, but competition from South America remains pronounced. Algeria's significant corn purchase and Jordan's wheat tender activities bring external demand support to the CBOT market.
A Cautious Market Amid Mixed Forces
Overall, the market is currently influenced by a mix of bullish and bearish factors, with geopolitical issues, ethanol demand, and harvest prospects guiding price trends. Wheat and corn are supported and stable, yet soybeans face significant downward pressure. Future market trends will depend on geopolitical developments, weather conditions in South America, and changes in export demand.
