Soybean Cancellations Add Bearish Sentiment to Market

The grains were mixed in the overnight with corn up 1 ¾ cents, soybeans down 2 cents and wheat up 3 ¼ cents going into the morning pause in trade. In a report from FAS this morning, China canceled 285,000 metric tons of Soybeans which will likely pressure the market lower this morning. FAS also reported a 101,600 metric ton old crop sale of corn to unknown destinations.

NOPA crush numbers were released on Thursday showing that the total number of soybeans crushed in the month of December was 165.383 million bushels falling just shy of 165.384 which is the monthly crush record set in December 2013. Despite the fact crush was near record highs, this report disappointed many analysts whose average guess was to see 166.9 million bushels crushed last month. This surprise further pressured soybeans causing the oilseed to close out the day at $9.91 ¾ just a fraction of a cent above the extreme lows of the range soybeans has traded in since late October. Producers should be alert in this trading environment looking to hedge prices if soybeans were to fall below $9.91 on strong volume.

Keep a close watch on March corn in the 60 minute chart today after yesterday the contract printed a bounce off $3.76. Another test of that level would leave me suspicious that corn could continue lower.

Chinese flour mills purchased 83.6% of the 2 million metric tons of high protein wheat offered to lock in import quotas for high-protein wheat. Another 630,000 metric tons of Chinese wheat will be offered at regular auctions on the 20th. It was also stated in an announcement today that China will sell 139,000 metric tons of imported high protein wheat from state reserves on January 21st in an effort to provide relief to a tight domestic market. U.S. wheat has closed lower for seven consecutive sessions and since December 19th has only posted four days out of eighteen where the contract closed higher than it opened.

—Cody Bills