Glacier FarmMedia | MarketsFarm — As the likelihood of tariffs loom over United States soybean, corn and wheat exports, that trio of commodities has been facing their share of pros and cons, said analyst Tom Lilja of Progressive Ag in Fargo, N.D.
He explained soybeans on the Chicago Board of Trade continued to contend with the strong prospect of a massive South American harvest. Most estimates for Brazil’s upcoming soybean harvest exceed 160 million tonnes, pushing towards 170 million as much of the weather has been favourable.
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Then Argentina’s soybean crop has been pegged at 51 million tonnes.
“It’s really going to be a weather market through the next couple of months,” Lilja commented.
But come the swearing-in of President-elect Donald Trump, the threat of tariffs hover over the markets, which if imposed could prove harmful to exports of U.S. commodities.
As for corn, Lilja said those “futures are doing a little bit better than soybeans,” crediting strong demand.
The National Oilseed Processors Association reported ethanol production consumed a record amount of almost 200 million bushels of corn in October and there were a series of corn purchases made by Mexico.
“We need the demand to keep going. There’s a pretty good argument that the corn market is in an equilibrium. Prices are where they should be for export demand to be solid,” he stated.
Meanwhile, U.S. wheat futures took a hit as U.S. crop conditions improved.
“In a month, we went from the second lowest ratings since 1986 and on (Nov. 18) we are now showing the best ratings in the last five years,” Lilja said.
The U.S. Department of Agriculture reported corn rated 49 per cent good to excellent as of Nov. 17, up five points in that week.
However, support for U.S. wheat has been coming from the recent escalation in the Russia-Ukraine war. The Biden administration gave Ukraine the go-ahead to use U.S.-made long-range missiles on targets in Russian territory. In response, Russian President Vladimir Putin stated such action by the U.S. is now a pretext for the use of nuclear weapons.
