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Soybeans, corn up modestly, watching weather

Soybeans were modestly higher on speculative and technical buying. Parts of the region will see some rain this week, but forecasts for next week are generally warmer and drier, leading to potential crop stress. The USDA’s updated production projection is out Friday. While the overall pace of sales remains slower than expected and what’s needed to meet Phase One trade deal obligations, China was the biggest buyer last week for old and new crop beans. U.S. soybean prices are below those of Brazil, but political tensions between the world’s two largest economies have had an effect on trade. Brazil’s CONAB says the soybean harvest has wrapped up with record production of 120.9 million tons, 5.1% above last year, with exports at 80 million tons. Soybean meal was higher and bean oil was lower on product spread adjustments.

Corn was modestly higher on speculative and technical buying. By next week, some key U.S. growing areas are expected to see potentially stressful conditions during key development phases. Considering the USDA’s record reduction from March’s planted area estimates to June’s acreage totals, a record corn crop was already unlikely and the weather event is expected to trim that potential even further. The USDA’s new production guess using the updated acreage total is out on the 10th. With less than a quarter left in the 2019/20 marketing year, U.S. corn continues to be higher priced than most other origins, including both Argentina and Brazil. The Rosario Grain Exchange sees Argentina’s corn crop at 51.5 million tons, up 500,000 from the last guess, with the Buenos Aires Grain Exchange has the crop at 50 million tons, with harvest 86.4% complete. Brazil’s CONAB says the first corn harvest is nearly complete, estimated at 25.6 million tons, down 0.3% on the year, and the second crop harvest is underway, projected at a record 73.5 million tons, up 0.5%. There are also uncertainties for domestic demand, especially for feed and fuel use. Ethanol futures were higher.

The wheat complex was steady to mostly higher on speculative and technical buying. Many analysts have lowered production outlooks for the European Union and Black Sea region because of weather. The Buenos Aires Grain Exchange lowered its’ 2020/21 outlook for wheat in Argentina citing lower planted area because of dry weather on the Pampas, and the Rosario Grain Exchange also cut its’ projection. New USDA supply, demand, and production estimates are out Friday at Noon Eastern/11 Central. Some of the recent adjustments to the international production expectations have been made recently enough that they won’t show up until at least the August report. Weekly export numbers were bearish, but it is still early in the 2020/21 marketing year. DTN says Jordan is tendering for 120,000 tons of milling wheat. France’s AgriMer says 2019/20 soft wheat exports outside of the European Union were 13.6 million tons, up 41% from 2018/19, but 2020/21 is expected to be down sharply because of a smaller crop.

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