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Solid gains in soybeans, wheat

Soybeans were sharply higher on fund and technical buying, along with gains in crude oil. Contracts bounced off the recent lows, while watching U.S. crop weather. Near-term forecasts for most of the Midwest are generally dry, with scattered rain and warm temperatures. It’s early, but that could still cause some early development issues. Soybean meal and oil were supported by concerns about crop damage, following the lead of beans. Reports have U.S. buyers purchasing a combined 120,000 tons of soybeans from Brazil due to tight domestic supplies and Brazil’s price advantage, with shipment set for the first half of this month. The USDA says the April soybean crush was 187 million bushels, a decline of 11 million from March, but a rise of 6 million from April 2022.

Corn was mixed, mostly higher. Corn is watching the weather, expecting minimal rainfall in most of the Midwest over the next week, with some scattered early reports of stress in portions of the region. Ethanol production was up on the week, while stocks were above a week ago, but below a year ago. The U.S. Energy Information Administration says production averaged 1.004 million barrels a day, up 21,000 on the week, down 67,000 on the year, with stocks of 22.332 million barrels, an increase of 291,000 from the prior week, but a decrease of 692,000 from last year. The USDA says 415.738 million bushels of corn were used for ethanol production in April, 4% lower than in March and 1% less than April 2022, with DDGS production of 1,619,677 tons, 5% under both the prior month and a year ago. Corn is also monitoring early harvest activity and development conditions for Brazil’s second crop.

The wheat complex was higher on fund and technical buying, in addition to the lower move in the dollar during the session. Wheat is heavily oversold, expecting a big increase in abandonment for the hard red winter crop. Soft red winter is in good shape and spring wheat planting could wrap up in some areas this week. Globally, recent heavy rainfall in key growing areas of China and Russia are creating concerns about quality, and Ukraine is expected to see a much smaller crop for the second consecutive year due to the war with Russia. Moscow is reportedly unhappy with the Black Sea Grain Initiative despite agreeing to an extension in May.

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