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Tight supply supports soybeans

Soybeans were higher with nearbys leading the way up on commercial and technical buying. Old crop supplies remain very tight and even if exports have slowed down, domestic demand is solid. China bought 252,000 tons of new crop U.S. beans and while there are concerns about increased soybean acreage, it’s too early to tell how much of a shift we’ll see. Soybean meal was up, following beans with additional support from the firm cash basis, and bean oil was mostly firm. The Buenos Aires Grain Exchange held its soybean production estimate for Argentina steady at 48.5 million tons, adding 38.6% of the crop is harvested. According to Agriculture and Agri-Food Canada, domestic soybean production should be 5.000 million tons, unchanged from last month and up 70,000 tons from last year’s total.

Corn was lower on fund and technical selling. With more rain around the Midwest and snow in the Plains, we’re continuing to look at widespread planting delays, but it is still fairly early and the precipitation is recharging soil moisture. In any event, the cash grain basis is trending lower and it was a bearish week for export sales numbers. Ethanol futures were mixed with nearby contracts up. The Buenos Aires Grain Exchange reports 31.7% of Argentina’s corn crop has been harvested, with production projected at 25 million tons. Agriculture and Agri-Food Canada sees 2013/14 Canadian corn production at 12.500 million tons, steady with the month ago guess but down from the year ago total of 13.060 million tons.

The wheat complex was mixed. Chicago was steady to weak with soft red winter in comparatively good shape. Kansas City was up on the poor condition of the hard red winter crop with colder than normal weather in the forecast for the Southern Plains. Minneapolis was modestly higher thanks to spring planting delays and good demand for milling wheat. European wheat was lower on spillover from the trade in Chicago. Japan bought 105,425 tons of milling wheat (31,570 tons Australian standard white, 25,470 tons Canadian western red spring, 24,330 tons U.S. dark northern spring, 18,725 tons U.S. hard red winter, and 5,330 tons U.S. western white) and Morocco is tendering for 50,000 tons of durum wheat from Europe. Agriculture and Agri-Food Canada left its 2013/14 domestic wheat production estimate unchanged at 28.400 million tons, with durum at 4.6 million tons, down 200,000 on the month.

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