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Another big day in wheat

Soybeans were mixed, with nearby contracts weak. Soybeans adjusted spreads and took profits, continuing to monitor conditions in South America. AgRural pegs production at 122.8 million tons, compared to the previous projection of 128.5 million, due to drought conditions impacting southern Brazil. Those have also affected production in Argentina and Paraguay. China bought 132,000 tons of U.S. beans, half old crop, half new crop, the seventh business day in a row with an announced sale, for a running total of 2,272,860 tons, including 1,126,000 tons of new crop. Sales have picked up steam as production projections for South America have declined. China’s General Administration of Customs says January and February soybean imports were 13.94 million tons, up just over 4% from the first two months of 2021. Weekly export inspections were up on the week and the year, mainly to China and Egypt. Soybean meal was mixed, adjusting spreads, and bean oil was up on the strength in crude oil and global vegetable oils, including Malaysian palm oil. Ukraine is the world’s largest exporter of sunflower oil and a major exporter of canola.

Corn was mixed on bear spreading. Corn also adjusted spreads and took profits, with widespread weekend rainfall in parts of Argentina and Brazil, and more in the forecast for this week ahead of a drier pattern. The Rosario Grain Exchange sees Argentina’s crop at 48 million tons, compared to the most recent USDA guess of 54 million. The USDA’s next set of supply and demand estimates is out Wednesday, with CONAB’s updated outlook for Brazil to be released Thursday. Losses in the nearby contracts were limited by concerns about shipments from Ukraine. Weekly corn inspections were a marketing year high at nearly 1.6 million tons, primarily to China and Mexico. Ethanol futures were unchanged.

The wheat complex was sharply higher on commercial and technical buying, including a new-trading-limit-gain of $.85 in May Chicago, which opened and closed at $12.94. The trade continued to react to Russia’s invasion of Ukraine and the potential impact on global supply. Ukraine’s government has announced export licenses for wheat, corn, and sunflower oil. With the Black Sea closed, what exports are leaving Ukraine are traveling by rail. Weekly U.S. export inspections were down from the previous week and a year ago, mostly to Mexico and Japan. Drought or near drought conditions remain an issue in much of the U.S. Plains, while portions of the eastern Midwest are excessively wet. After some early concerns about spring wheat acreage in the U.S. and Canada, producers are expected to increase planted area despite drought conditions to help make up for the expected delay in planting in Ukraine. There are also winter wheat production concerns in parts of China, with planting delays last year and quality issues.

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