With soybean (ZSF26) and wheat (ZWH26) (KEH26) markets presently experiencing a downturn and corn (ZCH26) trading sideways, grain traders will receive a fresh batch of economic data from the United States Department of Agriculture early this week. On Tuesday, the USDA will release its December World Agricultural Supply and Demand Estimates (WASDE). Analysts surveyed by Bloomberg, on average, project the agency to lower its estimate of U.S. corn ending stocks by 8.2 million bushels from its November figure to 2.146 billion bushels. The analysts anticipate the USDA to peg U.S. soybean ending stocks at an increase of 16 million bushels, reaching 306.1 million bushels. Furthermore, analysts forecast a decrease in U.S. wheat stocks by 7.2 million bushels, totaling 893.8 million bushels.
Growing weather conditions in South American corn regions are poised to become a central focus of the market in the coming weeks. Weather forecasters are predicting frequent rainfall and improving conditions for crops throughout most growing regions of Brazil and Argentina for the next two weeks. In Argentina, timely rains are expected during the same period. Soybean traders are increasingly concentrating on production potential within South America. Weather forecasts late last week indicated improving rainfall in Brazil, which is expected to bolster soil moisture levels and support better soybean crop development over the coming weeks. Soil moisture levels in Argentina are currently regarded as favorable across most soybean-growing regions. Brazil’s soybean shipments in November climbed by 64% compared to the previous year, reaching 4.2 million metric tons (MMT).
Simultaneously, the USDA attaché in Beijing maintained a forecast of 106 MMT for China’s 2025/26 marketing year soybean imports, representing a reduction of 1 MMT from the prior year. The downward revision reflects China’s ongoing efforts to limit import growth. The attaché also projects China’s soybean production at 19.9 MMT for the same period. Ongoing monitoring of China’s purchases of U.S. soybeans will be a key factor for traders as they assess whether the nation honors its commitments made at the fall summit between Presidents Trump and Xi Jinping.
March soft red winter (SRW) wheat futures last week declined by 2 3/4 cents, while March hard red winter (HRW) futures saw an increase of 3 3/4 cents. The winter wheat market has experienced choppy, sideways price action over the past two weeks, and remains trapped in downtrends as observed on daily bar charts. This continues to afford the bears a technical advantage in the near term, due to the ongoing abundance of global supplies. Canada last week confirmed its estimate of a record wheat crop.
The ongoing Russia-Ukraine peace talks have yet to yield a sustained ceasefire between the two warring nations. While reports indicate some progress has been made, most agree that a lasting ceasefire remains elusive. Grain traders will continue to scrutinize the situation closely, as a ceasefire would enable increased shipments of wheat from the Black Sea region in the coming months.
Jim Wyckoff enjoys receiving emails from his readers. For those interested in sharing their thoughts, he invites emails to jim@jimwyckoff.com. All information and data in this article is solely for informational purposes.
