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A dismal end to the week for grains

Soybeans were lower on fund and technical selling as the broader markets continue to show concern about rising interest rates and the potential for slowing economies.  Soybeans were also under pressure and crude oil and soybean oil both fell.  Among the concern, there is a bright spot as demand for soy products, specifically from China, has remained strong.  The next big headwind for soybean markets will come from Brazil, where decent growing conditions could mean a record harvest early next year.  The recent strength in the dollar and that week’s uncertainties about a railroad strike are likely contributing factors.

Corn futures ended the day lower as markets were faced with several bearish concerns.  However, concerns about rising interest rates and slowing economies around the world are the number one threat right now.  Harvest is picking up pace around the country, and while the projected smaller crop isn’t really bearish, there could still be some pressure to prices this time of year.  It is early, but the 2022/23 pace is way behind 2021/22, partially because of slower demand from China and the hefty competition from Ukraine and Brazil. That’s in addition to the recent strength in the U.S. dollar against other currencies. Ukraine’s State Customs Service says corn exports for the marketing year to date are 4 million tons, compared to 1.4 million this time last year. 

Wheat futures were also lower amid rising interest rates and a soaring US Dollar Index.  Planting is underway or is right around the corner for winter wheat crops, and much rain is still needed.   The market is also waiting for developments in the Black Sea region. Russia is expected to take more action in Ukraine, impacting exports and planting, and Moscow is unlikely to extend Ukraine’s Black Sea export corridor past November 22nd. Ukraine’s State Customs Service says wheat exports since the start of the marketing year are 2.3 million tons, 68% slower than the year ago pace. Russia’s wheat exports are also slower, impacted by sanctions following their invasion of Ukraine in February.

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