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Corn, soybean oil hit fresh highs on fundamentals

Soybeans were lower on profit taking and technical selling. Export sales were up on the week, but lower than average, and soybean meal was also down on profit taking. Soybean oil notched another round of highs on commercial buying linked to the tight globally of and strong demand for vegetable oils. Indonesia is restricting exports of both crude and refined palm oil and Ukrainian exports of sunflower oil have all but ceased because of Russia’s invasion. China was the leading purchaser last week for old and new crop U.S. soybeans, with Mexico claiming second place for both marketing years. China’s National Grain and Oil Information Center says domestic soybean stocks moved higher for the fourth week in a row last week, but remained tighter than a year ago, with the crush rate also up on the week and down on the year. Most forecasts have more near-term U.S. planting delays. Friday is the first notice day for May grain and oilseed contracts.

Corn was mostly higher on spread trade and commercial buying, with the most active months establishing new highs for the move. Corn hung near those highs for much of the session, also watching the slower than normal U.S. planting pace. China was the big buyer of U.S. corn last week, both old and new crop, and picked up 1,088,000 tons of U.S. corn Thursday morning. 476,000 tons are for delivery this marketing year with 612,000 for next marketing year, after September 1st. China has stepped up purchases of U.S. corn due to Ukraine’s near-total absence from the market after the invasion by Russia. Corn is also watching dry weather in central Brazil lowering quality of that nation’s critical second corn crop.

The wheat complex was mostly lower. There’s rain in the forecast for parts of the southern Plains, but the eastern Midwest is too wet and spring wheat planting is delayed in the northern Plains. Still, contracts were unable to hold onto periodic gains as export demand remains slow with about a month left in the marketing year. Mexico was the top buyer of old crop U.S. wheat last week and the Philippines led the way on new crop, while Nigeria canceled on both old and new crop. The slower than anticipated demand is due to U.S. prices, which have been heavily impacted by the recent relative strength in the dollar. The trade continues to monitor the planting and export impacts of Russia’s invasion of Ukraine. A major Romanian rail hub has reportedly started accepting Ukrainian grain for re-export. Even if the war ended this week, there would still need to be significant repairs to Ukraine’s Black Sea port infrastructure.

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