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Grains, oilseeds mostly up ahead of USDA numbers

Soybeans were higher on fund and technical buying. Contracts bought back part of Tuesday’s losses, watching U.S. harvest activity and yield reports. It’s anecdotal, but yields have come in lower than expected in some key growing areas at a time when beans will need a trend-line yield or better. U.S. soybeans hold an export price advantage into early next year. There’s been more talk of Chinese interest in U.S. beans but only one reported sale so far this week, with the USDA’s export numbers for last week out Thursday morning. Also Thursday, the USDA will be releasing the as-of-September 1st quarterly grain stocks report, effectively the ending stocks for the 2020/21 marketing year. Ahead of the numbers, the average guess for soybeans is 172 million bushels, compared to 525 million on September 1st, 2020. The trade is also monitoring early planting paces in Argentina and Brazil. CONAB’s first production estimate of the season for Brazil is out October 7th. Soybean meal and oil were modestly higher, following beans.

Corn was higher on fund and technical buying. Corn was also watching harvest activity, with near-term rain delays in the forecast for some areas through the weekend. Corn is also looking at mixed yields in many parts of the Midwest and Plains, with the USDA’s next projection out October 12th. Similar to beans, corn will need a trend-line yield or better to replenish supplies and limit further price inflation for end users. The average estimate for Thursday’s quarterly stocks report has corn at 1.167 billion bushels, compared to 1.919 billion a year ago. Export operations at the U.S. Gulf continue to come back on-line following damage from Hurricane Ida. Corn continues to monitor planting activity and precipitation in South America. The Buenos Aires Grain Exchange says producers have sold 40.9 million tons of the current corn crop, compared to 37.2 million this time last year. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 914,000 barrels a day, the lowest since late August, and a decrease of 12,000 on the week, but an increase of 33,000 on the year. The domestic supply of 20.22 million barrels was 109,000 above the previous week and 529,000 more than this time last year.

The wheat complex was mixed, with Chicago and Kansas City up and Minneapolis mostly down. Rain will help planting prospects in the hard and soft red winter regions, but the white winter region in the northwestern U.S. Plains remains dry. The USDA’s next wheat production estimate is out Thursday. On average, analysts see total production at 1.681 billion bushels, with winter wheat at 1.321 billion and spring wheat at 329 million. In August, the USDA’s estimates were 1.697 billion for the total crop, 1.319 billion for winter wheat and 343 million for spring wheat. The spring wheat harvested area and implied abandonment numbers will be watched closely. The same drought issues in the northern U.S. Plains that hit U.S. spring wheat hard are also impacting white winter planting and slashed Canada’s spring wheat crop. Quarterly wheat stocks are estimated at 1.857 billion bushels, compared to 2.158 billion last year. Both reports are out Thursday at Noon Eastern/11 Central. Wheat is also keeping an eye on planting and development weather in Australia, Argentina, Europe, Russia, and Ukraine. Ukraine is reportedly 29% planted, while Kazakhstan’s spring wheat harvest is almost complete. The USDA’s attaché in Pakistan says just 57,000 tons of wheat have been imported so far this marketing year but left the overall guess unchanged at 2 million tons, expecting purchases to increase in the coming months. Still, that’s less than the official USDA estimate of 2.5 million tons and the 2020/21 total of 3.5 million following a rise in domestic production. DTN says Algeria bought 500,000 to 550,000 tons of optional origin milling wheat.

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