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Soybeans, corn gain on yield concerns

Soybeans were sharply higher on commercial and technical buying. The USDA’s national good to excellent rating declined again last week and there are concerns about yield. Most near-term forecasts have continued dry weather in portions of the southern Plains against heavy rainfall in portions of the Delta, limiting moisture during pod filling and delaying early harvest activity, respectively. The USDA’s FSA cut planted area this week, which would also have an impact on yield. Domestic crush margins are solid, supporting soybean products, and China bought 110,000 tons of new crop U.S. beans Tuesday morning. That’s a sign of the seasonal switch from dwindling South American supplies to soon-to-expand U.S. supply. The USDA’s weekly sales numbers are out Thursday morning. Soybean meal and oil are also benefiting from slow farmer selling and negative crush margins in Argentina.

Corn was sharply higher on commercial and technical buying. 55% of the crop is rated good to excellent, one of the lowest for this time of year in a decade. A major crop tour is showing much lower than a year ago yield results in some key growing areas and the recent USDA FSA data does point to a reduction in the planted area total, also impacting crop size. The USDA’s first field-based numbers of the season are out September 12th. Corn is also monitoring crop weather issues in portions of Europe and China, in addition to the pace of exports out of Ukraine’s Black Sea ports and second crop harvest activity in Brazil. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday.

The wheat complex was higher on commercial and technical buying, along with lower trade in the dollar index. There are crop condition concerns due to drought in parts of the U.S., Europe, and China. The U.S. spring wheat rating was steady on the week, with harvest slower than average, and the end of this year’s winter wheat harvest is in sight. A big question for wheat, and other commodities, is when will the pace of Ukraine’s Black Sea exports really pick up steam. That’s a question mark in and of itself because of Russia’s continued attacks, which have impacted the winter grain harvest and new crop planting, in addition to exports. Russia’s own export pace is an additional uncertainty, partially due to the high costs of insuring vessels in war zones. Still, Russia is on pace for a record wheat crop this year, which should help blunt some of the impact of lower production in other parts of the world. The trade is monitoring the impact of a recent freeze on Brazil’s wheat crop. Brazil is typically a net importer, sourcing most of those imports from Argentina, which has had an uneven planting and growing season.

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