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More strength for soybeans

Soybeans were higher on commercial and technical buying, establishing another set of contract highs. The NOPA monthly crush numbers were bullish, reflecting the strong demand, and rain coverage has been mixed in South America this week. While planting has advanced very well in many areas, the delays earlier in the season will extend global reliance on U.S. beans. The U.S. Soybean Export Council thinks China could import 100 million tons of soybeans in 2021, projecting 3% to 4% annual growth over the next decade, with U.S. market share potentially reaching 40%, roughly the amount prior to the recent trade tensions. There’s been talk this week of China buying U.S. beans, but no confirmation. The U.S. harvest should be able to wrap up in the next several days, with the biggest lags in southern and southeaster areas that have been impacted by recent hurricanes. Soybean meal and oil were supported by commercial demand. DTN says Egypt is tendering for 30,000 tons of soybean oil.

Corn was mostly higher on commercial spread trade. Corn is also watching planting and development conditions in Argentina and Brazil and harvest activity in the U.S. Stateside, things could wrap up soon in most of the Midwest and Plains. The dry weather has delayed corn planting in South America, and while Brazil’s first crop has caught up to the average pace, the second crop, the source of most of their exports, isn’t planted until after soybeans are harvested. Mexico bought 195,000 tons of U.S. corn on Tuesday – the first sale of any major commodity announced by the USDA since the purchase of U.S. corn by South Korea on the 10th. There is talk about more interest in U.S. corn by China, but nothing’s surfaced yet. APK-Inform estimates Ukraine’s 2020 corn crop at 31.8 million tons, with potential exports of 25.2 million tons, both down from their last guesses following widespread weather issues. France’s AgriMer sees 2020/21 corn exports within the European Union at 4.3 million tons, compared to 4.01 million a month ago, with ending stocks of 2.2 million, unchanged from the prior projection. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday.

The wheat complex was lower on profit taking and technical selling. Parts of the southern U.S. Plains should see some precipitation, which should help conditions ahead of dormancy. 46% of U.S. winter wheat is rated good to excellent, up 1% on the week, but 6% below a year ago, while planting and emergence are running a little bit ahead of average. Still, there’s not always a strong a correlation for crop conditions ahead of dormancy and yields after dormancy. The trade is also monitoring the dry weather ahead of dormancy in parts of Russia and Ukraine and harvest activity in Australia. France’s AgriMer estimates 2020/21 soft wheat exports to non-European Union nations at 6.85 million tons, compared to 6.7 million in October, with ending stocks of 2.5 million tons, compared to 2.6 million last month.

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