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Soybeans, corn mostly higher, still watching weather

Soybeans were mostly modestly higher, adjusting spreads. Most forecasts have hot, dry weather in some key growing areas into early August, a critical time for U.S. soybean development. The lowest ratings are in the Dakotas and Minnesota, which account for more than a fifth of U.S. soybean production. Because of the historically tight ending stocks projections for this and next marketing year, beans will need a trend-line or better yield to meet demand. The new marketing year for soybeans gets underway September 1st. Soybean meal was higher and bean oil was lower, adjusting product spreads. Continued low water levels on the Parana River in Argentina are limiting their exports and could lead to some bump in U.S. business. Argentina is the world’s biggest export of soybean meal and oil. The USDA’s weekly export sales numbers are out Thursday morning.

Corn was mostly modestly higher on spread adjustments. Corn is also watching the weather and potential stress during critical development phases, with the heat dome moving east into the central Corn Belt. The USDA’s next production guess is out August 12th, along with supply and demand estimates. The trade is also watching Brazil and the assessment of recent frost/freeze damage. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 1.028 million barrels a day, down 13,000 on the week but up 120,000 on the year, with stocks at 22.518 million barrels, the largest domestic supply since late February, and an increase of 1.384 million from the week before and 2.521 million from a year ago. China is set to auction 23,488 tons of corn imported from Ukraine. Demand for imported corn in China has dipped ahead of this year’s harvest. China’s domestic corn prices have moved lower recently but remain priced about most exporters.

The wheat complex was mixed. Minneapolis was down on profit taking and overbought signals, despite the weather concerns for spring wheat. A significant amount of damage has likely been done to the spring wheat crop in the U.S. and Canada and the big question now is less about yield and more about abandonment. The USDA’s attaché in Canada estimates 2021/22 production at a total of 32 million tons, compared to 35.183 million for 2020/21. Exports by Canada in 2020/21 are pegged at 27.1 million tons, compared to the USDA’s official guess of 27.5 million tons, but that’s expected to fall to 22.5 million tons in 2021/22 because of the smaller spring wheat crop. There’s a chance for rain in Canada, but it might be too little too late. Chicago and Kansas City were up on higher global prices and some world weather concerns. That includes recent flooding in parts of the European Union and continued hot, dry weather in portions of Russia. Winter wheat harvest activity should pick up steam in some areas because of the expected dry U.S. weather.

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