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Corn, soybeans, wheat drop

Soybeans were sharply lower on profit taking and technical selling, pulling contracts lower for the week. The Russian invasion of Ukraine was ongoing during Friday’s session, but beans sold off with spillover from bean meal, vegetable oils, and crude oil. Ahead of Friday’s open, unknown destinations bought 285,000 tons of U.S. beans, with 159,000 tons for 2021/22 and 126,000 tons for 2022/23, and China purchased 334,000 tons, all for 2022/23. The new marketing year for soybeans starts September 1st. Last week’s old and new crop sales were down modestly from the previous week, but still topped 2 million tons as U.S. sales continue to spike because of lower production estimates out of South America. The big buyers last week for old crop were Egypt and China, with China and unknown leading the way on new crop. Near-term forecasts Friday did have an improved chance of rain in dry portions of Argentina, Brazil, and Paraguay, along with drier weather in northern and central Brazil, which would help ease some quality concerns following recent rain. Soybean meal and oil were sharply lower on the broadly negative tone in ag commodities.

Corn was sharply lower on profit taking and technical selling, with old crop contracts firm for the week and new crop lower. The big issue for commodities continued to be the volatility attached to the instability in the Black Sea region. Most near-term forecasts have improved chances of rain in dry parts of Argentina and southern Brazil, along with drier conditions in central and northern Brazil, which should help second crop planting pull even further ahead of average. Weekly export sales of corn moved back over a million tons, 27% above a week ago, with Japan and Mexico topping the list. China continues to ignore U.S. corn in favor of other origins, but there was routine interest reported from unknown destinations. Ethanol futures were unchanged. European ethanol prices hit two-month highs on that Russian invasion of Ukraine.

The wheat complex was sharply lower on profit taking and technical selling, with expanded trading limits, but with Chicago and Kansas City still posting strong weekly gains. Port operations in the Black Sea and Sea of Azov have been disrupted, with a lot of uncertainties about when full trade will resume. The situation continues to be volatile with no clear resolution as Russia reportedly looks to move into Kyiv. Both Russia and Ukraine are major wheat producers and exporters. That’s already having at least a small impact on business, with the only offer on the weekly tender from Egypt coming from France and the tender eventually being canceled by Cairo. The weekly old crop U.S. sales total was just over 500,000 tons, primarily to Mexico and Nigeria. Closing in on the fourth quarter of the marketing year, 2021/22 continues to trail 2020/21. Most forecasts have more dry weather in much of the U.S. Plains, which is expected to have an impact on quality and yield and could limit spring wheat planted area from the northern and northwestern U.S. Plains into Canada. Most of the soft red winter crop is in comparatively good conditions, but excessive soil moisture levels are a concern in parts of that region.

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