On Thursday (November 14), the CBOT grain market showed significant volatility. Corn and soybeans saw an increase in short positions, with prices under pressure due to growing concerns about weak demand and increased global supply. Wheat prices were capped by high global inventories, limiting upward momentum. The latest position data shows speculative shorts continuing to add, making the market sentiment increasingly cautious. With the end of the harvest season in the Northern Hemisphere and the progress of planting in South America, the subsequent price trends may become more complex. The market is awaiting the USDA's upcoming supply and demand report, hoping to gain more market-driven insights.
Soybean Market
On November 13, CBOT soybean futures fell by 2.75 cents to $10.07-3/4 per bushel. The December soybean meal contract dropped $1.3 to $291.6 per short ton. The price decline was mainly influenced by concerns over U.S. soybean supply and demand and uncertainty in Chinese demand. Although U.S. soybean harvest progress was smooth, with 97% completed, high farmer reluctance to sell did not effectively support prices.
In South Korea, the feed group MFG purchased 60,000 tons of soybean meal at $373.42 per ton, while Nonghyup Feed Inc. (NOFI) acquired 60,000 tons through international tendering at $379.49 per ton. These purchases reflect sustained high demand in Asia for U.S. soybean meal, but a strong dollar limits price competitiveness, leaving sellers cautious. Looking ahead, as Asian buyers begin restocking, demand for U.S. soybean meal is expected to remain high. Changes in policy may impact soybean oil prices, with particular focus on the new government's support for biofuel policies.
Wheat Market
In the wheat market, CBOT wheat prices on November 13 fell sharply, closing down 11.25 cents to $5.40 per bushel, hitting a low not seen since August. A strong dollar pressured the competitiveness of U.S. wheat exports, while USDA reports showed that 44% of winter wheat crops were in good or excellent condition, up three percentage points from last week.
In terms of international demand, South Korea's Nonghyup Feed Inc. purchased 65,000 tons of feed wheat at $261.74 per ton (including fees) through international tendering; Japan's Ministry of Agriculture, Forestry and Fisheries bought 4,100 tons of feed-grade wheat and 220 tons of barley at an SBS auction. Despite stable purchasing demand in the Asia-Pacific region, high inventories and a strong dollar will continue to limit the upward space for wheat prices.
Corn Market
As of November 13, the CBOT December corn contract fell by 2 cents to $4.26-1/2 per bushel. The USDA confirmed sales of 401,000 tons of corn to Mexico, with other countries purchasing 291,000 tons, signaling strong continued demand for U.S. corn. South Korea's Feed Leaders Committee (FLC) and Incheon Feed Association respectively purchased 68,000 tons and approximately 65,000-70,000 tons of corn to meet feed production needs. Additionally, Algeria's state agency ONAB recently conducted an international tender for 240,000 tons of Argentine or Brazilian corn, potentially pushing up South American corn prices.
Although international demand supports corn prices, a strong dollar and U.S. farmers' resistance to current prices may pose short-term obstacles. Should CBOT's position data indicate a build-up in long positions, corn prices may see an uptick before the end of the year. However, as South American supply increases, price volatility may intensify.
Summary
Overall, the grain market's volatility intensifies under the influence of a strong dollar and global demand uncertainties, with corn, soybean, and wheat prices demonstrating varied performances. Future price trends will still depend on Asian market purchasing conditions and the upcoming USDA supply and demand report. Market activity is expected to remain high.
