Soybean Futures Drop Along With Crude Oil -- Daily Grain Highlights

By Kirk Maltais

-- Soybeans for January delivery fell 1.4% to $13.59 1/4 a bushel on the Chicago Board of Trade on Wednesday, with the contract under pressure because of weakness in crude-oil futures along with indications of lower export sales.

-- Corn for December delivery fell 0.3% to $4.69 a bushel.

-- Wheat for March delivery rose 0.6% to $5.86 3/4 a bushel.

HIGHLIGHTS

Fuel Flow: Corn and soybeans followed crude oil for much of the day, with crude down on indications that OPEC countries are disagreeing about world oil supply.

"What's likely going on is that Saudi Arabia realizes that the marketplace isn't in agreement with OPEC's prediction of a tighter oil market in early 2024," said Ira Epstein of Linn & Associates in a note.

Analysts say that for grains, this is being felt with soybeans and corn dropping because of their usage in producing biofuels. Light crude oil was down over 2% this afternoon, although pared losses later in the day.

On the Books: The USDA confirmed on Wednesday morning a new flash sale of U.S. wheat exports to China. Beijing purchased 110,000 metric tons of soft red winter wheat for delivery in the 2023-24 marketing year. The confirmation was seen as giving CBOT wheat support throughout the day, with fund traders covering sizable short positions.

INSIGHT

Clear Choice: According to data compiled by StoneX, more than 4.8 million metric tons of soybeans were sold from Brazil to China in October, while the U.S. sold only 228,623 tons of soybeans to China in the same period, a near 71% slide from the same time last year. The clear favoring of Brazil over the U.S. by China hurts sentiments around export demand.

Bombs Away: Providing wheat with support in overnight trading was reports of a Russian attack on Ukraine's port city of Odesa.

"There remains uncertainty over potential Ukraine reaction on Russia ports," said Steve Freed of ADM Investor Services in a note.

Uncertainty about what Black Sea exports may look like in the coming months is a factor moving grains, particularly wheat.

Missing the Mark: Average daily production of ethanol in the U.S. fell below the estimates of analysts surveyed by Dow Jones this week. The EIA said that production fell to 1.023 million barrels a day as of the week ended Nov. 17. In the prior week, it was reported at an average of 1.047 million barrels a day.

Surveyed analysts had forecast production to slightly increase, rising to between 1.05 million barrels a day to 1.055 million barrels a day, making the decline in production seen as a surprise by analysts.

AHEAD

-- The USDA and CME will be closed in observance of the Thanksgiving holiday. The USDA will reopen on Friday, while grains trade in an abbreviated session.

-- CBOT grain and livestock futures will close trading early at 1:05 p.m. EST Friday.

-- The USDA is scheduled to release its weekly grains export inspections report at 11 a.m. EST Monday.

-- The CFTC is due to release its delayed Commitments of Traders Report at 3:30 p.m. EST Monday.

-- The USDA is scheduled to release its weekly crop progress report at 4 p.m. EST Monday.

Write to Kirk Maltais at [e-mail]

(END) Dow Jones Newswires

11-22-23 1554ET