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Soybeans continue to climb on weather concerns

Soybeans were higher on commercial and technical buying, capping off a very bullish week linked to weather concerns. Most forecasts continue to show a return to hot, dry weather in parts of the Midwest and Plains in the coming week. August is the critical month for soybean development in the Northern Hemisphere and any significant crop loss would have an impact on global oilseed and feed supplies. Unknown destinations bought 132,000 tons of new crop U.S. beans. Soybean meal ended the session mixed, consolidating after hitting new highs during the session and several times during the week, while bean oil was sharply higher on the strength in crude oil and proposed biodiesel tax credits. Both bean meal and bean oil have recently benefited from strong domestic demand for soybean products. Brazil’s government says it will begin soybean meal trade with China after some red tape is cleared out.

Corn was modestly higher on commercial and technical buying, rallying after some mixed midday activity and ending the week solidly higher. Corn is also watching the weather and the potential impact to yield. August is a bigger month for soybean development, but weather issues earlier in July followed by a return to hotter, drier conditions would likely lower prospects. The USDA’s first official yield projection of the season is in the supply and demand report out on August 12th. The current estimate of 177 bushels per acre is based on trend-line yields, not factoring in the late planting in some areas and widely mixed development conditions seen thus far this growing year. Corn is also watching harvest activity in Argentina and Brazil.

The wheat complex was lower on profit taking and technical selling, unable to follow through on the higher start to the session, but still able to post strong gains for the week. There is some talk that Ukraine should be able to export through the Black Sea at some point in the near future. A deal between Russia and Ukraine brokered by the U.N. was reached recently, but that’s been complicated by further Russian attacks on Ukraine and accusations by Moscow that Ukraine is responsible for the mines littering the Black Sea. Insurance for vessels traveling in the Black Sea has been hard to come by, but insurers connected to Lloyd’s of London have indicated they will provide coverage. Yield results from the spring wheat crop tour in the northern U.S. Plains were generally in-line with expectations. The expected August heatwave is also forecasted to impact spring wheat conditions in the northwestern U.S. Plains. The USDA’s attaché in Turkey says the wheat harvest is two weeks behind normal, with production projected at 17.25 million tons, compared to the most recent official guess of 17.5 million tons and the 2021/22 total of 16 million tons. Exports are expected to be 6.75 million tons, up slightly from last marketing year, with imports of 10.25 million tons, compared to 6.5 million in 2021/22.

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