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Soybeans, corn down on rain in some areas

Soybeans were lower on profit taking and technical selling, pulling contracts modestly lower for the week. Some dry parts of the Midwest and Plains have recently received rain, helping to stabilize conditions. Still, some of the drier growing areas could see a return hot, dry conditions in early August, a critical development period for the U.S. soybean crop. The USDA’s weekly crop progress and condition numbers are out Monday afternoon, while the next production estimate is due August 12th with the supply and demand report. Soybeans will need a trend-line yield or better to meet demand expectations and prevent the already historically tight carryout projections through 2021/22 from getting even tighter. The new marketing year starts September 1st. Soybean meal and oil were lower, following the lead of beans. A survey by Datagro has Brazil’s soybean producers increasing acreage for the 15th year in a row, with the average guess calling for a 4% rise and production of 144.06 million tons. Planting begins in September.

Corn was lower on profit taking and technical selling, ending the week very narrowly mixed, with slight gains in deferred months. Corn was also watching the weather and more potential crop stress in parts of the Midwest and Plains. There’s been talk, but no confirmation, about China buying new crop U.S. corn. The continued issues with Brazil’s second crop did limit losses. The latest issue is a third frost freeze event, which followed planting delays and dry conditions during key development phases. DERAL, the ag department for Brazil’s state of Parana, cut its outlook for second crop corn to 6.11 million tons, compared to the last guess of 9.82 million tons and the initial expectation of 14.6 million tons. Parana is the second largest corn producing state in Brazil. According to a producer survey by Datagro, Brazil’s planted area for Brazil’s upcoming first crop is expected to rise 4% with production of 28.83 million tons, with planted area for the next second crop jumping 5% to 90.84 million tons. Brazil’s first crop is usually used for domestic livestock feeding, while the second crop is the source of most of their exports. Of course, that all depends on weather. 81% of Argentina’s corn crop is harvested. Ethanol futures were unchanged. The European Commission projects 2021/22 corn imports by the European Union at 14 million tons, 1 million less than the previous estimate.

The wheat complex was mixed, mostly lower, adjusting spreads, but still closing with week-to-week gains. Minneapolis was mostly lower even as further degradation of the spring wheat crop in the U.S. and Canada is likely, but that’s priced in for now. Results from a spring wheat crop tour have shown yields below the USDA’s guess and the five-year average, but quality and protein levels in some areas have reportedly been better than expected. There are also concerns about conditions in parts of South America, Europe, and Russia. Despite recent flooding in parts of France and Germany, the European Commission raised its European Union soft wheat outlook by 1.9 million tons to 127.7 million, compared to 117.2 million a year ago. 2021/22 exports are seen at 30 million tons, steady with the last guess and up 3 million from 2020/21. Ukraine’s Ag Ministry says the running total for wheat is 16.9 million tons, compared to 23.4 million this time last year. The USDA’s attaché in the United Kingdom estimates 2021/22 wheat production at 15 million tons, compared to 9.658 million in 2020/21 thanks to somewhat improved crop weather. The attaché in Turkey has wheat production at 16.5 million tons, a half a million below the official guess and down from the year ago total of 18.25 million tons due to weather issues. DTN says Pakistan purchased 220,000 tons of optional origin wheat, while the Philippines picked up an unknown amount of wheat from Australia.

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