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Soybeans, corn mostly down as wheat falls

Soybeans were mostly lower on bull spreading, with nearby contracts up and deferred months down. Beans consolidated after the recent losses, watching the harvest of Brazil’s record crop. There’s some rain in the forecast for Argentina, but it’s mostly too late to help and is only expected to stabilize conditions in some areas. The USDA’s next round of supply, demand, and production numbers is out April 11th, with CONAB’s updated outlook for Brazil due April 13th. Soybean export inspections were up on the week and the year, mainly to China and Japan. Just over the halfway point of the marketing year, inspections are ahead of the year ago pace. China’s General Administration of Customs says imports of soybeans from the U.S. in January and February were 11.59 million tons, up 15.4% on the year, while imports from Brazil were just 2.24 million tons because of early harvest delays. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Additionally, soybean oil has bullish demand projections tied to biofuels and global vegetable oil supplies are expected to get much tighter in the second half of the year.

Corn was mostly lower on bear spreading, pressuring nearby months, and supporting far off deferred contracts. Corn is watching the planting of Brazil’s expected record second crop, along with U.S. weather ahead of widespread planting. The USDA’s prospective planting report is out March 31st, in addition to quarterly grain stocks. Global economic uncertainties connected to banking were an additional bearish background factor, even if the U.S. broader market was mostly bullish during Monday’s commodity session. Export demand has improved as U.S. corn has become the most competitively priced on the market, but sales and shipments remain behind last marketing year. Last week’s inspections were above the prior week, but below last year, primarily to Mexico and Japan. China took third place. Most of last week’s announced U.S. corn export sales to China will show up in this week’s export sales report. China’s General Administration of Customs says it bought 2.35 million tons of U.S. corn in January and February, well above the totals for both Brazil and Ukraine. That U.S. dominance on the export market is expected to last until Brazil’s second crop harvest gets underway this summer. Projections for a second consecutive much smaller crop in Ukraine should limit some of that Brazil impact.

The wheat complex was lower on fund and technical selling, along with profit taking after last week’s gains. The Black Sea Grain Initiative has been extended, keeping U.S. wheat non-competitive on the export market. How long that extension is for is the question mark. The pact specifies a 120-day extension, backed by Ukraine, Turkey, and the U.N., but Russia only wants a 60-day extension. Ukraine has been pushing for access to more ports and faster inspections, while Moscow is insisting on several concessions even as it continues to attack Ukraine. That’s also impacting spring planting in Ukraine for the second year in a row. There is some precipitation in the forecast for the southwestern U.S. Plains. Still, it might miss some of the drier areas. That region’s not expected to see a sustained shift in weather until the El Nino pattern emerges this summer, well after this drought damaged hard red winter crop is harvested. Soft red winter conditions are comparatively good and the trade is monitoring weather in the northern U.S. Plains and Canada ahead of spring wheat planting. The USDA’s weekly national crop progress and weather reports resume Monday, April 3rd. Weekly U.S. wheat inspections were above both the week before and a year ago, with the pace of inspections remaining just ahead of what’s needed to meet estimates for the marketing year, which ends May 31st. The top destinations were China and the Philippines. Egypt reportedly bought 120,000 tons of wheat from Ukraine.

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