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Corn down on ethanol numbers

Soybeans were mostly modestly higher on spread adjustments. Production estimates have been lowered for Argentina and Brazil, but both are on pace for very large if not record crops, even with dry weather cutting projections. The USDA’s attaché in Brazil sees 2019/20 production at 123 million tons, rising to 129 million in 2020/21 on higher planted area, with exports of 77 million tons this marketing year, going up to 79 million next marketing year. While some of the port issues in Argentina have cleared up somewhat, low water levels on the Parana River has led to companies loading less freight onto ships. Brazil is still shipping a lot of beans to China and Beijing is releasing 500,000 tons from state reserves for commercial crush demand. Soybeans are also trying to buy back some acreage from corn. The USDA’s WASDE report is expected to show an increase in domestic ending stocks. Soybean meal was mixed, following beans, and oil was lower on profit taking. The USDA’s attaché for the Philippines says soybean meal demand in 2019/20 has been limited by African swine fever and COVID-19, but that should recover in 2020/21. The Philippines is the biggest buyer of U.S. soybean meal.

Corn was modestly lower on fund and technical selling. Ethanol production last week was the lowest on record while stocks hit an all-time high for the second week in a row because lower blending demand due to coronavirus related stay at home restrictions and social distancing orders. The U.S. Energy Information Administration says production averaged 672,000 barrels a day, a drop of 168,000, while stocks were up 1.374 million barrels to 27.091 million. Ethanol futures were higher. Additionally, traders were getting ready for Thursday’s weekly export numbers and monthly supply and demand estimates. Ahead of the report, most analysts expect an increase in the U.S. ending stocks projection. For now, concerns about planting delays are on the back burner. The USDA’s attaché for Brazil has 2019/20 corn production at 100 million tons, with 2020/21 at 103 million. DTN says a feed mill in Taiwan is tendering for U.S. corn, while Algeria wants to buy corn from Argentina.

The wheat complex was mixed, mostly modestly higher, the exception being the May Chicago contract. Most forecasts have drier weather in the southern U.S. Plains along with a much colder forecast for many areas starting next week, potentially damaging the developing winter crop and delaying early spring wheat fieldwork and planting activity. The trade is also monitoring weather and exports for Russia and Ukraine. U.S. wheat ending stocks should be just about unchanged on the month but the global supply outlook continues to be neutral to bearish, which should be reinforced in Thursday’s supply and demand estimates, with just under two months left in the 2019/20 marketing year for wheat. The USDA’s attaché for Brazil projects 2020/21 wheat production at 5.6 million tons, with planting about to get underway.

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