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Soybeans, corn see profit taking to start week

Soybeans were lower on profit taking and technical selling. Contracts gave back part of Friday’s gains with additional pressure tied to soybean oil, crude oil, and the dollar. Additionally, Malaysian palm oil was down sharply ahead of the U.S. session. The trade is watching planting and development weather in South America. Conditions in Brazil are generally good, with AgRural reporting 69% of the crop has been harvested, but early planting is behind schedule in Argentina due to dry conditions in some key growing areas. Soybean meal was mixed on bear spreading. The USDA says 96% of U.S. soybeans are harvested, compared to the five-year average of 91%. Export inspections were just shy of 1.9 million tons, down on the week and the year, mainly to China and Mexico. There are two big questions about sustained demand from China. The first is Beijing’s potential relaxation of its zero-COVID policy and the second is tensions with Taiwan, a key U.S. ally in the region. Following a Monday meeting with China’s Xi Jinping, President Joe Biden said there was no imminent threat of an invasion of Taiwan by China.

Corn was modestly lower on profit taking and technical selling. Snow and cold temperatures are causing some late harvest delays with part of the crop probably left in the field until spring. As of Sunday, 93% of the crop is harvested, compared to 85% on average. Demand continues to be mixed: solid for feed and fuel, slow for exports. Export inspections were a little bit above 480,000 tons and above a week ago, but well below a year ago, primarily to China and Mexico. The European Union says third quarter corn imports from Brazil were 4.2 million tons. Corn conditions in South America continue to generally favor Brazil over Argentina. Parts of Argentina are expected to see rain this week ahead of a return to a drier pattern. The Buenos Aires Grain Exchange says corn planting in Argentina remains slow and just 9% of the crop is in good to excellent condition.

The wheat complex was higher on fund and technical buying. Bitterly cold conditions have hit most of the U.S. winter wheat growing region with minimal or no snow cover in some areas. According to the USDA, 96% of winter wheat is planted, compared to 93% normally in mid-November, with 81% of the crop emerged, matching the typical pace, and 32% rated good to excellent, up 2% on the week, but down 14% on the year. The Black Sea situation remains fluid, with the export deal set to expire this weekend. Ukrainian shipments have slowed down ahead of the expiry due to the uncertainty about a renewal, but many are reportedly cautiously optimistic. Negotiations are ongoing with Russia pushing for some major concessions. U.S. export inspections were below last week and last year, mainly to the Philippines and Mexico. Saudi Arabia bought more than 1 million tons of optional origin hard wheat over the weekend. India’s government says domestic wheat stocks on November 1st were a little bit larger than expected at 21 million tons, but half of the year ago levels. Last year’s wheat crop was hit hard by weather, with Indian farmers expected to increase planted area this year. Harvest is gaining steam in parts of Australia, but with concerns about quality due to flooding and heavy rain in some eastern growing areas.

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