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Corn, soybeans, wheat up after USDA numbers

Soybeans were modestly higher on short covering and technical buying. Beans are optimistic about China, with reports the U.S. and Beijing are working to delay the next tariff increase on the 15th. That increase could still take place though and phase one of the trade deal remains unsigned. The sticking points are essentially the same as they have been during the entire negotiation. The amount of soybeans China will use a tariff waiver on remains unspecified, but China has reportedly purchased U.S. beans this week. The USDA left U.S. ending stocks unchanged and South American production numbers were also steady with November. The USDA did lower the export outlook for Argentina slightly with ongoing dry weather expected to impact production at least somewhat, while leaving exports for Brazil and imports for China unchanged. The soybean production guess for China was slightly higher, a little bit above the official estimate from Beijing. CONAB pegs Brazil’s soybean crop at 121.092 million tons, compared to 120.86 million a month ago and the current USDA projection of 123 million tons. CONAB’s export estimate was unchanged at 72 million tons, compared to 70 million in 2018/19. Soybean meal and oil were modestly higher, following beans.

Corn was modestly higher on short covering and technical buying. A deal has been made on the USMCA, but the trade pact will still need to be passed by Congress and NAFTA will need to be repealed. U.S. corn ending stocks were steady on the month with no changes to production, exports, or ethanol use, and there were no changes to production guesses for Argentina, Brazil, or Ukraine. Export demand continues to be an issue, largely because of increased competition from those three nations. The USDA’s survey for the January crop numbers is underway. Harvest is more than 90% complete, but part of the crop may not be harvested until 2020. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. CONAB has Brazil’s total corn crop at 98.409 million tons, including first crop production of 23.313 million and second crop production of 70.936 million tons. Exports, mostly out of the second crop, are expected to be 34 million tons, steady with last month, but down from 39 million last marketing year.

The wheat complex was modestly higher on short covering and technical buying. About halfway through the 2019/20 marketing year, U.S. ending stocks were down on the month on lower imports and higher exports, now below a billion bushels, while the global supply was modestly higher. Downward production revisions were confirmed for Argentina, Australia, and Canada. New USDA supply, demand, and production numbers are out January 10th. DTN says South Korea bought 60,000 tons of feed wheat from an unknown origin, while Egypt issued a tender for an unspecified amount of milling wheat, Japan is in the market for 171,045 tons of food wheat from the U.S. and Canada, and Syria is tendering for 150,000 tons of wheat from Russia. France reportedly had the lowest offer on the tender by Egypt. France’s Ag Ministry reduced its winter wheat area guess by 4.8% on the year because of weather problems during planting. CONAB expects Brazil’s 2019 wheat imports to be 6.8 million tons, compared to 7.2 million in November.

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