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Corn, soybeans manage modest gains

Soybeans were modestly higher on short covering and technical buying but finished closer to the session lows than the highs. China bought 272,000 tons of old crop U.S. beans, bringing the two-day purchase total to 470,000 tons, all for 2019/20 delivery. Weekly numbers were bearish, but there’s talk of even more new demand from China. Prices are near one-year lows and while U.S. beans remain at a disadvantage to Brazil because of the recent losses in their currency, but China will need to fill Phase One purchase obligations eventually. The big weekly buyers of U.S. beans were Spain and Egypt. Soybean meal was mixed on spread adjustments and bean oil was firm, following beans. Meal continues to monitor signs of flagging domestic feed demand because of processing slowdowns related to COVID-19.

Corn was modestly higher on short covering and technical buying, also finishing the day near the session lows. Weekly corn export numbers were bearish, but there’s also talk of China being interested in U.S. corn as Beijing tries to shore up state reserves. Planting delays are probable in parts of the Corn Belt over the next few days, especially southern and eastern areas. The trade is also watching feed and fuel demand signals. Ethanol futures were higher on the recent bounce in crude oil, with some talk the energy market has put in a near-term low. The USDA’s attaché for Argentina estimates 2020/21 corn production at 48.5 million tons, about steady with 2019/20, with exports of 34 million tons, 1.5 million less than the current marketing year. The department’s office in Ukraine estimates 2020/21 corn production at 35.2 million tons, compared to 35.8 million in 2019/20.

The wheat complex was mixed, with nearby Chicago contracts up and Kansas City modestly lower. The trade is watching weather in the U.S., Europe, and the Black Sea region, especially rainfall chances for either some dry areas or some areas that are already excessively wet, like the U.S. soft red winter growing region. Minneapolis was supported by concerns about the spring wheat planting pace and slow planting in other parts of the world. Export restrictions are probable for Russia and Ukraine, which is expected to help the U.S. pace at least to some extent, but maybe not until the 2020/21 marketing year gets underway June 1st. 2019/20 U.S. exports were bearish. DTN says Taiwan bought 220,000 tons of U.S. milling wheat and Saudi Arabia is tendering for 655,000 tons of wheat. The USDA’s attaché in Argentina estimates 2020/21 wheat production at a record 20.2 million tons thanks to a 2% increase in planted area, with the export potential for exports at 13.4 million tons, including wheat flour. The department attaché in Ukraine sees 2020/21 wheat at 27.6 million tons, compared to 29.1 million in 2019/20 on lower planted area.

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