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Soybeans, corn slide, watching weather

Soybeans were modestly lower on fund and technical selling, unable to follow through on early gains. The USDA says China didn’t buy any old or new crop U.S. beans last week with negotiations scheduled to resume in October. For now, the trade seems content to take a wait and see attitude toward the talks. Near-term weather forecasts are generally non-threatening, at least into mid-month. Still, even an on-time freeze would likely cause some damage in some areas. The trade is also watching pre-planting weather in South America. FC Stone projects Brazil’s crop at a record 121.41 million tons, compared to the USDA’s last guess of 123 million. Brazil’s soybean exports during August were 5.4 million tons, down sharply on the year, with year to date purchases by China also lower, probably because of African Swine Fever’s impact on demand. Allendale says union workers at crush plants in Argentina are on strike because of a wage dispute. Soybean meal followed beans lower and bean oil was steady to firm on spread adjustments. Statistics Canada says canola stocks at the end of July were 3.873 million tons, up 55% on the year.

Corn was modestly lower on fund and technical selling. Corn is also watching the weather, while getting ready for the USDA’s supply, demand, and production numbers on the 12th. Ahead of the report, there’s a wide range of estimates given the variable conditions impacting the crop from planting through present day. Old crop exports were a net reduction, with just a couple of reporting days remaining in 2018/19. The 2019/20 marketing year got underway September 1st. Brazil exported 7.65 million tons of corn in August, a new monthly record. Argentina and Ukraine are also increasingly competitive on the export market. Ethanol futures were lower. The industry is waiting for more details on President Trump’s “giant package” plan to address concerns about small refinery exemption waivers. Commodities in general are also waiting for the trade deal with Japan and enaction of the USMCA.

The wheat complex was mixed, with Chicago and Minneapolis pressured by fund and technical selling and Kansas City mixed, adjusting spreads. The USDA’s weekly export numbers were neutral, showing signs of slowing down as the world harvest advances. The USDA is expected to project a large world crop and sizable stocks in the coming week. There are concerns about dry weather in Argentina and Australia, but those are largely in the background because of the generally good conditions in most of the rest of the world. DTN says Turkey is tendering for 250,000 tons of milling wheat, while a South Korean flour mill rejected all offers on a 26,000-ton tender for U.S. milling wheat, citing uncompetitive prices. DTN reported the sale of about 137,000 tons of U.S. and Canadian wheat to Japan. Statistics Canada says all wheat stocks at the end of July were 6.184 million tons, down 4.6% on the year. Durum accounted for 1.619 million tons, up 13.5%, while other types of wheat made up the remaining 4.565 million tons, down 9.7%.

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