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Soybeans bounce, corn closes weak

Soybeans were modestly higher on short covering and technical buying. Soybeans were oversold, still waiting for signs of improved demand from China. Phase One trade agreement or not, that demand has been slow to surface, with the spread of coronavirus and big crops in South America. The May contract has dropped sharply this year on that slow demand from China and production expectations for Argentina and Brazil. Brazil’s beans remain at a competitive advantage to U.S. supplies. Argentina’s Ag Ministry is reportedly suspending its’ export registry in advance of a hike in soybean export taxes, which could be officially announced this weekend. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. Bean oil picked up additional pressure from a lower move in Malaysian palm oil ahead of the regular U.S. session.

Corn was modestly lower on fund and technical selling. Corn was also keeping an eye out for new demand and watching conditions in South America. Near-term, most forecasts have wet weather in parts of Brazil and dry conditions in portions of Argentina, but damage is expected to be limited. Early expectations are for planting delays in some key U.S. growing areas, with official USDA projections out at the end of March. The USDA estimate at the Annual Ag Outlook forum is calling for an increase in acreage, but that is dependent on weather. Export demand has improved recently, but physical shipments remain slow and the USDA could lower the target again next month. South Korea bought 123,000 tons of optional origin corn for 2019/20 delivery. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production last week averaged 1.054 million barrels a day, up 14,000 on the week, while stocks were 24.718 million barrels, down 63,000.

The wheat complex was mixed, with Chicago mostly lower, Kansas City weak, and Minneapolis mostly higher. The recent decline in price could help U.S. wheat be more competitive on the export market. Still, prices in some competing exporters have also moved lower recently, the U.S. dollar has gained, and the global supply outlook remains bearish. The USDA’s next set of supply and demand estimates is out March 10th. U.S. winter wheat conditions are mixed, generally better for hard red than soft red, and spring wheat planting delays are probable in parts of the northern U.S. Plains. DTN says South Korea bought 85,000 tons of milling wheat from the U.S. and Jordan purchased 60,000 tons of milling wheat from an unspecified source, while Syria is tendering for 200,000 tons of wheat from Russia.

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