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Soybeans, corn down ahead of USDA numbers

Soybeans were modestly lower on fund and technical selling, unable to follow through on early gains. China’s Ministry of Commerce has confirmed the vice premier will sign phase one of the trade deal on the 15th. Chinese purchases of U.S. ag goods are expected to increase after phase one is signed, but details about the deal in general remain scarce. Beans were also preparing for Friday’s supply, demand, production, and quarterly stocks numbers. Weekly export sales have been delayed until Friday at 8:30 Eastern/7:30 Central by weather earlier this week in Washington D.C. Overall, conditions in South America look good, but there are some areas of concern, especially in Argentina. Ahead of a crop tour, AgroConsult has Brazil’s crop at 124.3 million tons, compared to 124 million in December, following “irregular” rainfall in Rio Grande do Sul. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.

Corn was modestly lower on fund and technical selling. Corn was getting ready for the USDA’s supply, demand, and production update, also out Friday, expecting a lower 2019 crop estimate. The USDA is also expected to lower exports and could reduce the ethanol use projection. The reports are out at Noon Eastern/11 AM Central. Corn is also monitoring conditions in South America, with some dry pockets in parts of Argentina and Brazil. Those two major South American producers and Ukraine have made a big cut to the U.S. share of the corn export market. The USDA’s attaché for Brazil has 2018/19 total corn production at a record 101 million tons because of record yields and planted area, with 2019/20 also at 101 million tons, with expanded area canceled out by a return to normal yields. 2018/19 exports are seen at 37 million tons, dipping to 34 million in 2019/20. Ethanol futures were lower. China has suspended the plan to move to 10% ethanol nationally because of tight domestic corn stocks and a lack of infrastructure, but the potential for imports of U.S. ethanol still exists. U.S. DDGS and sorghum are also potential purchase targets for Beijing.

The wheat complex was higher on short covering and technical buying. The USDA’s quarterly grain stocks and winter wheat acreage numbers are also out Friday. Planted area is expected to be significantly below a year ago following planting delays in some key U.S. growing areas. Still, any year to year losses in production, domestically and internationally, are expected to be canceled out by larger crops in other countries and the USDA will likely continue to project a record global supply. DTN says Jordan is tendering for 120,000 tons of milling wheat. Ethiopia, Japan, Morocco, Syria, and Turkey also have open wheat tenders. Wednesday, Egypt bought 300,000 tons of wheat from Romania, Russia, and Ukraine. The USDA’s attaché in Brazil sees 2019/20 wheat production at 5.4 million tons, a little bit less than 2018/19, with imports of 7.5 million tons, including 400,000 from the U.S.

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