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Soybeans down, corn mostly weak but still watching weather in Argentina

 

Soybeans were modestly lower on profit taking and technical selling, posting a big week to week gain. Near term forecasts had scattered rain in dry parts of Argentina, but there are uncertainties about totals and coverage. Rain in parts of Brazil will delay harvest activity, but overall, it looks like that nation is still on pace to produce a very large crop. China’s Lunar New Year celebrations are underway, which should affect the export market. Soybean meal was mostly higher, watching Argentina, and bean oil was down on technical selling. South Korea bought 28,000 tons of 2017/18 U.S. soybean oil. One of the main takeaways from the USDA’s 10-year baseline projections for soybeans is expectations for continued heavy export competition from Brazil.

Corn was mostly fractionally lower, but still managed to finish modestly higher on the week. Corn was also watching that expected rain in Argentina, along with the second crop planting delays in parts of Brazil because of soybean harvest delays in some areas. Portions of Brazil are getting close to the point yields may be reduced if the second crop, the larger of their two crops, is planted late. Corn also has an eye on conditions in the U.S. ahead of this year’s planting. The USDA’s Ag Outlook Forum next week will be the department’s first acreage projection, with prospective planting numbers out at the end of March. The USDA’s 10-year baseline numbers shows expectations for a near term decrease in production against a long term rise in response to demand expectations, but corn is expected to face increasing export competition. Japan bought 116,000 tons of 2017/18 U.S. corn. Ethanol futures were mixed. Commodity markets are closed Monday for Presidents’ Day.

The wheat complex was mostly modestly lower on profit taking and technical selling. Large parts of the Plains remain in drought or near drought conditions, providing some support to nearby Kansas City, but damage won’t be known until the crop comes out of dormancy in spring. Minneapolis is watching conditions in the northern U.S. Plains and Canada ahead of spring planting. Chicago was down – winter wheat conditions in the eastern Midwest are generally better than in the Plains, but there’s a chance for flooding in parts of the soft red winter growing region. The USDA’s next set of monthly state crop stories is out the week of the 26th. Condition ratings are expected to decline in most states. Strategie Grains lowered its soft wheat export projection for the European Union to 21.4 million tons, down 300,000 from the prior estimate and 2.7 million less than a year ago.

 

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