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Corn up, expecting more harvest delays

Soybeans were modestly lower on fund and technical selling, failing to follow through on the firm open. Weekly export numbers were bullish, larger than expected and China was the big buyer, but it’s been another week of conflicting signals about trade negotiations from both Beijing and Washington D.C. Phase one of the proposed deal is unsigned and might not be signed for a while. Talks are reportedly ongoing and China’s Ministry of Commerce has extended an invitation for U.S. negotiators to visit China, but both sides seem to be preparing for the trade war to continue. Political tensions around Hong Kong are also an issue. Crop conditions in Argentina and Brazil look beneficial to non-threatening. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. Egypt will reportedly double soybean planted area to lower vegetable oil imports. The International Grains Council estimates 2019/20 global soybean production at 341 million tons, unchanged on the month, while raising the ending stocks guess.

Corn was modestly higher on short covering and technical buying. Corn contracts were oversold with probable near-term harvest delays, including some of the areas that are already the furthest behind. Most of those are also areas where the propane supply is tight, but federal and state officials and other groups are working to alleviate the shortages. Weekly export numbers were bearish, Mexico was the leading buyer, reflecting the competition from Ukraine and South America. Unknown destinations did buy 106,000 tons of 2019/20 U.S. corn Thursday morning, bringing their week to date total to 429,000 tons. Unknown destinations for corn frequently turns out to be Mexico. Commodities are also waiting for passage of the USMCA. Ethanol futures were higher. The International Grains Council projects 2019/20 world corn production at 1.103 billion tons, compared to 1.098 million in October, with slightly higher consumption and ending stocks.

The wheat complex was lower on fund and technical selling, with Chicago and Kansas City unable to follow through on their modestly higher start. Weekly export numbers were neutral, the biggest reported buyer was unknown destinations, and the USDA does expect a record global supply at the end of the marketing year. New USDA supply, demand, and production estimates are out December 10th. The International Grains Council sees 2019/20 world wheat production at 762 million tons, steady with last month and up from 2018/19, with no changes to consumption and carryover. DTN says Tunisia bought 92,000 tons of durum and Algeria purchased an estimated 500,000 tons of milling wheat, both from unknown origins. The USDA’s attaché in Canada says 96% of spring wheat has been harvested, with “significant abandonment” in some areas because of rain and snow during harvest activity, lowering their production guess to 32 million tons. Exports were also revised lower. Canada’s government is reportedly making progress towards ending a strike by workers on the nation’s largest railroad.

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