Limit Up

By Tori Uhland

November 30, 2022

Markets are down to start the week on news of increased Covid cases in China and protests in Shanghai and Beijing over their zero-Covid policy. Protesters are demonstrating against the disruptions that the Covid policies have continued to have on their lives three years into the pandemic and restrictions on freedoms and livelihoods. There are reports that police have been asking people for their phones to check and see if they have virtual private networks (VPNs), which are illegal in China, and the Telegram app, which is blocked from China’s internet. The protests have made an impact on global markets: crude oil, Chinese stocks, the yuan, and grains are all lower. As China’s economy continues to be slowed by the pandemic, it results in lower demand across the agriculture sector, leading to the lower prices.

First Notice Day for December futures is November 30, so positions are getting cleared out. This week the nearby trade will start using the March futures contract in corn and wheat, the January contract for soybeans and feeder cattle, and the February contract for live cattle and lean hogs.


U.S. Secretary of Agriculture Tom Vilsack is set to meet with Mexican President Andres Manual Lopez Obrador to discuss genetically modified corn. Mexico is set to ban genetically modified corn in 2024, and Vilsack is calling for clarity on the ban as it would decrease Mexico’s imports of U.S. corn by half.

Weekly corn export sales were up again this week from 10.4 million bushels two weeks ago, to 46.0 million bushels last week, to 72.8 million bushels on the most recent reporting week that ended on November 17. The 72.8 is the highest for this week of the year since 2015, but we are still behind last year’s pace by 11.6 million metric tons (mmt) and China is 8.5 mmt of the lag while Mexico is 1.1 mmt behind.

Last week, it was announced that Brazil could export 5 mmt of corn to China this marketing year. Brazil has never had China as a corn trading partner, and that quantity would be greater than the entire corn program that Ukraine previously held with China.


Despite weakness in the U.S. Dollar, there isn’t much strength in the wheat market due to the Chinese situation and continued competition from Russia.

Oklahoma and Kansas received rains last week which should help crop conditions. Australia is seeing better harvest weather, but quality issues have continued to come up.

As I mentioned last week, the U.S. wheat futures remain overpriced. On paper, European wheat would work into the U.S. currently. Historically, 99% of the U.S. wheat imports come from Canada, so when European wheat would work, it is a serious issue

Ukraine is claiming that Russia is slow-walking grain inspections despite agreeing to extend the grain agreement.


Soybeans are trading lower on the disruptions in China as well as weakness in the energy markets.

Argentina is re-establishing a favorable exchange rate in an effort to get farmers to sell their beans to increase movement and exports up until the end of the calendar year.

Soybeans had terrible export sales on Friday last week, but total commitments are still .44 mmt ahead of last year. Taking into account the USDA’s lower export projection, we are 2.1 mmt ahead of pace. China is the surplus as they have 1.94 mmt more on the books right now than they did one year ago.

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Data shows that there were record Black Friday sales this year, indicating that consumers are still spending money despite the economic situation.

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