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Corn up from recent contract lows

Soybeans were mixed on old crop/new spread adjustments, ending the session mostly weak. Nearby contracts continued Tuesday’s late oversold bounce with help from the broader market, but deferred months were down with some reluctance about buying some acreage back from corn because of demand uncertainties. China bought 198,000 tons of old crop U.S. beans, their first announced outright purchase in weeks as Beijing continues to rely on Brazil for their soybean needs. The USDA’s weekly numbers are out Thursday morning. China’s Phase One trade obligations on beans might not be met for months because of Brazil. The USDA’s attaché in Argentina sees 2019/20 soybean production at 51.5 million tons, down from the previous guess because of dry weather in the Santa Fe Province, with exports of 6.5 million tons. 2020/21 production is projected 51 million tons with lower planted area because of higher export taxes for beans and products. Argentina is the world’s biggest exporter of soybean products and the third largest seller of beans. Soybean meal was lower and bean oil was higher on the unwinding of product spreads. Bean meal is also keeping an eye on demand signals from the livestock sector.

Corn was higher on short covering and technical buying. Corn bounced off the recent lows despite another bearish set of weekly ethanol numbers as demand continues to be limited by the drop in blending demand caused by COVID-19 related stay at home and social distancing orders. The U.S. Energy Information Administration says production last week averaged 563,000 barrels per day, down 7,000 on the week for a record low, with stocks of 27.689 million barrels, up 220,000 for a record high, the third week in a row with new all-time marks. Still, that’s a smaller decline and smaller build than we’ve seen over the last few weeks and the EIA says U.S. gasoline demand was up modestly on the week. Feed demand is also an uncertainty because of the slowdown in processing. Ethanol futures were higher. This week’s planting progress is expected to be mixed, better in northern and western areas of the Corn Belt than in the south and the east.

The wheat complex was lower on fund and technical selling. Most forecasts have more rain in dry parts of the southern U.S. Plains and Europe and the trade is also waiting to see what happens with weather in and exports from the Black Sea region. Losses in Chicago were limited by concerns about the impact of more wet weather on the soft red winter crop. That said – even with the week to week decline in the USDA’s crop condition rating for winter wheat, it’s still at a high level for this time of year, and spring wheat planting could make some progress this week. DTN says Taiwan has an open tender for U.S. milling wheat. The USDA’s attaché in Romania reports that nation has reversed its’ decision earlier in the month to suspend exports outside of the European Union following an outcry from industry organizations. The department’s attaché in Australia estimates 2020/21 wheat production at 23 million tons, up more than 50% from 2018/19 thanks to expectations for better weather, higher planted area, and improved yields.

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