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Corn bounces off of recent lows

Soybeans were mostly firm on spread adjustments, with nearby contracts down and deferred months up. The trade is trying to buy back some acres from corn but remains wary about the demand impact of COVID-19. Nearby contracts had an up and down day, eventually closing weak as crude oil moved towards session lows and the broader market pulled back from earlier gains. South America continues to be a bearish factor. Brazil’s harvest is 86% complete with a big discount to U.S. prices. AgRural did lower its’ production estimate for Brazil to 123.8 million tons, a reduction of 500,000 from the previous guess, but still a record large crop. The USDA could lower production estimates for both Argentina and Brazil later this week. Beans continue to wait for South America to run out of supplies and for China to really begin buying U.S. beans in earnest under the Phase One trade agreement. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.

Corn was modestly higher on short covering and technical buying. Corn was oversold after Monday’s move to new contract lows, with spillover support from the broader market. The trade is monitoring U.S. weather ahead of widespread planting, with most forecasts showing mixed conditions in some key U.S. growing areas. Wheat progress that has been reported as all been in the south and southeastern Corn Belt. The May supply and demand report will have the results, if warranted, from the USDA’s resurvey of producers in the northern Plains and upper Midwest following the delayed 2019 harvest. DTN says there are open corn tenders from feed mills in South Korea and Taiwan. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Poet is idling production at three biorefineries and delaying the opening of a fourth because of the drop in fuel demand as governments try to stem the spread of coronavirus. The USDA is expected to lower the corn for ethanol use in the next supply and demand report.

The wheat complex was modestly lower on profit taking and technical selling. At 62% good to excellent, the USDA’s first national condition rating of the season for winter wheat was up 10% from the last rating in November and 2% above a year ago. That’s despite wet weather in some soft red winter growing areas and dry weather in parts of the hard red winter region. New supply and demand estimates are out this Thursday at Noon Eastern/11 AM Central. The trade is also monitoring dry weather in parts of the Black Sea region. France’s Farm Ministry says 2020 soft wheat planting will hit a 17-year low, down 7.5 on the year because of poor weather conditions during last autumn. Global analyst Refinitiv says France’s soft wheat shipments during March were the highest for the month in at least a decade at 1.63 million tons. Saudi Arabia’s state grain company is requesting citizens who have invested in foreign farm land import about 350,000 tons of wheat from that land to shore up supplies. DTN says Jordan is tendering for 120,000 tons of milling wheat and Turkey is looking for 250,000 tons of milling wheat, while Japan is in the market for 128,760 tons of food wheat from the U.S. and/or Australia.

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