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Wheat surges on weather concerns in Plains

Soybeans were modestly higher on commercial and technical buying, in addition to the strength in wheat. Weekly export numbers were bullish, but while demand is strong, the supply is a growing issue. Friday, USDA is expected to increase its acreage number from March’s guess and report larger quarterly stocks. Soybean meal was mixed, consolidating after a new marketing year low for exports, and bean oil was up, following beans. Statistics Canada puts 2017 soybean acreage at a record 7.3 million acres, up 33.2% on the year, with canola at a new all-time high of 22.8 million acres, 12.1% more than in 2016.

Corn was modestly higher on commercial and technical buying, along with spillover from wheat. Weekly export numbers for corn were also bullish and there’s a lot of uncertainty about this year’s acreage ahead of Friday’s numbers. The reports are out at Noon Eastern/11 AM Central. Rainfall around the Cornbelt is expected to be mixed, possibly missing some of the drier areas. Ethanol futures were higher. According to Statistics Canada, 2017 corn acreage is 3.6 million acres, a 7.5% year to year increase.

The wheat complex was sharply higher on speculative, commercial, and technical buying. Minneapolis took the lead again on the continued drier than normal weather in the Northern Plains. U.S. spring wheat is in greater demand than other varieties because of higher protein content. Also, protein results from harvest activity in the Plains have generally been well below ideal levels. Kansas City and Chicago both hit new multi-month highs, pulled along by the new multi-year highs in Minneapolis. Weekly export sales were bullish and quarterly stocks should be up on the year. Statistics Canada says farmers planted 22.4 million acres of wheat in 2017, down 3.7% on the year, with a 15.9% decline in durum against a 2.5% rise in spring wheat. The current issues with dry conditions in the northern U.S. Plains also partially extends into Canada. The CME Group will launch a wheat futures contract tied to Australia’s export price July 24th.

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