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Soybeans, corn lower, watching weather

Soybeans were sharply lower on speculative and technical selling. Parts of the Midwest got rain over the weekend and parts of the region are expected to get more this week. Some damage has been reported because of severe weather, but that took a backseat Monday to this week’s forecasts. The USDA says 48% of U.S. soybeans are blooming, compared to the five-year average of 40%, and 11% are blooming, compared to 10% on average, with 68% of the crop rated good to excellent, down 3% on the week. The trade is also concerned about sustained demand from China. Political tensions between the U.S. and China persist and last week, President Trump said Phase Two of the trade deal is not being considered. China was the leading destination for export inspections last week, but the total fell short of the mark needed to meet USDA expectations for the current marketing year. Soybean meal was also down sharply, leading bean oil lower.

Corn was lower on speculative and technical selling. Corn was also watching the weather and the chances for rain around the Midwest and Plains over the next few days. However, temperatures will be hotter than normal in parts of the region and if the expected rain doesn’t fall, corn could reverse course. As of Sunday, 29% of corn is silking, compared to 32% normally in mid-July, and 3% is at the dough making stage, matching the average pace, with 69% of the U.S. crop called good to excellent, 2% lower than last week. There were no reported deliveries on the July corn contract, which expires this week. Ethanol futures were mostly lower. With less than two months remaining in 2019/20, weekly export inspections were short of what’s needed to meet USDA projections for the current marketing year. Last week’s purchase of U.S. corn by China was their second-largest single day buy on record, putting them closer to the WTO’s import target of 7.2 million tons.

The wheat complex was lower on speculative and technical selling. The USDA was expected to report good winter wheat harvest progress and at least some improvement in the spring wheat condition rating. For winter wheat, 68% of the crop is harvest, compared to 66% normally this time of year. For spring wheat, 80% has headed, compared to 85% on average, and 68% is called good to excellent, 1% less than last week. There was also follow through pressure from the USDA’s recent record world production estimate. The USDA did lower outlooks for a couple of major export competitors last week, but to small degrees. The next set of supply and demand estimates is out August 12th. According to reports, Russia’s wheat prices moved higher last week on the higher weekly finish for Chicago, along with slow farmer selling because of disappointing yields in Russia and Ukraine. France’s AgriMer says 10% of that nation’s soft wheat crop was harvested as of July 6th, ahead of the 2019 pace. Weekly export inspections were more than what’s needed to meet USDA projections for the current marketing year.

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