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Minneapolis takes the lead for wheat

Soybeans were higher on commercial and technical buying. Contracts bounced off the recent lows, with some support from the export sales announcements over the past week. Thursday, the USDA reported the sale of 132,000 tons of 2021/22 U.S. beans to unknown destinations, bringing total announced sales since the 7th to 921,624 tons, all to either unknown, China, or Mexico. The USDA’s weekly numbers are out Friday at 8:30 AM Eastern/7:30 Central. Planting conditions are good in Brazil, but Argentina needs rain. The USDA’s attaché in Buenos Aires has lowered its planted area estimate for Argentina citing better returns on other crops, putting production at 49.7 million tons, compared to the official guess of 52 million and the office’s 2020/21 total of 44.5 million tons. Exports are seen at 6.5 million tons, compared to 5.2 million last marketing year. Crush use is projected at 42.5 million tons, compared to the official estimate of 43 million and the year ago total of 40.5 million tons. Argentina is the world’s biggest exporter of soybean products. Safras e Mercado says 28.1% of Brazil’s 2021/22 soybean crop has been marketed, slower than forward sales of the 2020/21 crop. Soybean meal and oil followed beans higher.

Corn was modestly higher on commercial and technical buying. Corn also bounced off the recent lows, while watching the mixed planting weather in South America. Both Argentina and Brazil are trying to rebuild domestic supplies and lower prices following smaller than expected production last year. That could be a challenge because of the expected La Nina pattern, which would likely trim yields. Most U.S. forecasts have favorable harvest conditions starting this weekend or next week. The trade is also watching harvest activity in Ukraine, with production likely record large. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production moved over a million barrels a day for the first time since July, averaging 1.032 million barrels, an increase of 54,000 on the week and 95,000 on the year, while stocks shrank to a 13-week low at 19.847 million barrels, a decrease of 84,000 from the previous week and 161,000 from a year ago.

The wheat complex was higher on commercial and technical buying, with December Minneapolis notching a fresh contract high. U.S. and world wheat supplies have gotten tighter, especially for milling wheat, confirmed in the most recent USDA supply and demand report, which should provide continued background support. Near-term rain forecasts are mixed for U.S. winter wheat growing areas. Rain is generally welcome in the southern Plains, but there are concerns about drought conditions expanding this winter, while white winter growing areas remain dry and parts of the soft red winter region have excessive moisture. The trade continues to monitor winter wheat planting conditions in Europe, Russia, and Ukraine, along with development conditions in Australia and Argentina. Russia’s spring wheat harvest is reportedly 95% complete at a gross total of 76.4 million tons. DTN says Japan bought 119,512 tons of food wheat from the U.S., Australia, and Canada, while Turkey is tendering for 300,000 tons of optional origin wheat.

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