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Soybeans, corn mixed, adjusting spreads

Soybeans were mixed, adjusting spreads. Contracts started the session higher, but couldn’t follow through, with recent improvements in conditions for sections of Argentina and Brazil, ahead of another drier pattern in Argentina. The Buenos Aires Grain Exchange says 10% of Argentina’s bean crop is rated poor to very poor, compared to 18% a week ago. Precipitation has missed some areas in both of those key exporters, leaving them at risk of stress or yield loss, but the rain has been welcome where it has fallen. Harvest activity is underway in parts of Brazil. The trade is also waiting to see what changes to trade policy could be made by the Biden Administration, especially how it pertains to China. China and Mexico bought 136,000 tons and 163,290 tons, respectively, of old crop U.S. beans. The USDA’s weekly export sales numbers are out Friday, delayed a day by Monday’s Martin Luther King Jr. holiday and Wednesday’s inauguration. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.

Corn was mixed on spread adjustments. Corn is also watching weather in South America, in addition to expanding drought conditions in parts of the U.S. ahead of planting. The USDA’s prospective planting numbers are out March 31st, along with quarterly grain stocks, representing the second quarter of the 2020/21 marketing year. DTN says U.S. corn is now at a slight discount to Argentinian corn, at least for April delivery, and their sales are spiking ahead of possible restrictions, but U.S. corn still holds a price advantage over most other exporters. A truck strike in Argentina is reducing the amount of goods heading to ports. The Buenos Aires Grain Exchange says 8% of Argentina’s corn crop is in poor to very poor condition, half of last week’s total. Unknown destinations bought 336,500 tons of old crop U.S. corn. Ethanol futures were lower. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Friday. The USDA’s attaché in Mexico estimates 2020/21 corn production at 27.8 million tons, compared to the 2019/20 total of 26.658 million, with imports of 16.5 million tons this marketing year, compared to 16.526 million last marketing year.

The wheat complex was modestly lower on fund and technical selling. U.S. wheat prices are competitive on the export market, but the global supply outlook continues to be neutral to bearish, with the next set of supply and demand estimates out February 9th. Nigeria purchased 138,000 tons of new crop U.S. hard red winter wheat. DTN says Japan bought 72,635 tons of milling wheat from the U.S. and Canada, Algeria purchased 390,000 tons of milling wheat from the European Union, and Jordan picked up 120,000 tons of milling wheat from an unnamed origin, while Tunisia is tendering for 92,000 tons each of soft wheat and durum. The USDA’s attaché for Mexico projects 2020/21 wheat production at 2.9 million tons, compared to 3.27 million for 2019/20, with imports at 5 million tons, compared to 5.08 million in the previous marketing year.

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