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Shifting weather outlooks send soybeans lower

Soybeans were lower on fund and technical selling, unable to follow through on the early gains. Forecasts have moderated for parts of the Midwest and Plains, but some areas will continue to see stressful conditions. The USDA didn’t make any adjustments to the U.S. yield outlook this month but will likely lower the guess in the next couple of months. Unknown destinations bought 256,000 tons of new crop U.S. beans, the third day with an announced sale this week for a running total of 878,000 tons. That included a sale earlier this week to China. The USDA’s weekly sales numbers showed a solid improvement for old crop, but demand for old crop U.S. beans remains constrained by Brazil’s market dominance. Last week’s big buyers for old crop were the Netherlands and Germany, but with a cancelation by unknown destinations, while China and Mexico led the way for new crop. Soybean meal and oil futures followed beans lower.

Corn was mixed on bear spreading. Corn is watching development weather, waiting to see if the less stressful outlooks for parts of the region come to fruition.  That uncertainty comes with a large portion of the crop in the pollination phase, which has probably trimmed some of the crop’s yield potential. The USDA’s next round of supply, demand, and production estimates is out August 11th. The trade is also monitoring the harvest of Brazil’s second crop, with an updated outlook from CONAB scheduled for the 10th. The USDA says old crop corn export sales were above a week ago, primarily to Mexico and Japan, but new crop was down, with Canada and Mexico accounting for most of the weekly purchases. The new marketing year for corn, and soybeans, gets underway September 1st. Brazil holds a lot of the global market share, but there are opportunities for the U.S. to grab some of Ukraine’s exports following the collapse of the Black Sea Grain Initiative.

The wheat complex was mixed, with Chicago mostly firm, Kansas City down, and Minneapolis up. There has been some rain in the northern U.S. Plains this week, but it’s mostly too late to help much of the spring wheat crop. There’s a major crop tour in the region this week, projecting mostly lower than a year ago yields. Dry weather is also an issue on the Canadian Prairies and in parts of Australia. The ongoing war between Russia and Ukraine is leading to a lot of uncertainty for the export market. Russia’s domestic prices have moved higher over the past week but remain the cheapest on the global market. The European Union is exploring avenues for Ukraine’s grain exports that don’t include the Black Sea. U.S. wheat sales were higher than the prior week, but lower than average. The top purchasers were the Philippines and Nigeria.

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