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Solid gains for soybeans, wheat

Soybeans were sharply higher on commercial and technical buying. Soybeans continued to bounce off the recent lows, helped out Tuesday by the strength in soybean meal and the lower dollar. Soybean oil was down early but rallied with gains in crude oil. The USDA reports Friday are expected to show higher planted area and tighter stocks. The trade continues to monitor harvest activity in Brazil, now close to 80% complete, along with the conditions in Argentina. Recent rainfall in Argentina appears to have stabilized crops and might improve prospects for later planted beans. Meanwhile the increasing amount of Brazilian soybeans on the market is impacting demand for U.S. beans. The USDA’s next round of supply, demand, and production numbers is out April 11th, with CONAB’s updated outlook for Brazil set for April 13th.

Corn was mostly higher, adjusting spreads. Corn is getting ready for Friday’s USDA numbers, with analysts projecting a smaller supply against larger than a year ago planted area. China bought 136,000 tons of U.S. corn, the 10th reported sale in the last 11 business days, nine of those directly to China. Monday’s sale to unknown destinations could end up heading to China when it’s time for delivery. The running total for this streak of sales is 3,000,800 tons, surpassing trade rumors. The U.S. advantage should last until the harvest of Brazil’s second crop starts this summer. Second crop planting in Brazil is around 95% complete. 6% of Argentina’s corn crop is harvested, with early yields reflecting the weather impact. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was higher on fund and technical buying. Kansas City took the lead on concerns about drought impact, while Minneapolis saw support from talk about spring planting delays. U.S. winter wheat conditions in the Plains were mixed on the week, month, and year, with the USDA’s weekly crop progress and condition reports resuming Monday, April 3rd. Just over half of the winter wheat crop is impacted by drought, slightly less than last week and below a year ago. Chicago followed the Plains pits higher. The USDA is expected to show smaller quarterly stocks and higher acreage Friday. Domestic demand continues to be strong, while export demand for U.S. wheat remains slow. Russia, Ukraine, Australia, and the European Union continue to hold most of the market due to price advantages and the relative strength of the dollar. Ukraine’s spring planting is expected to be dramatically affected again this year by continued Russian aggression.

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