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Soybeans, corn up on continued weather concerns

Soybeans were modestly higher on fund and technical buying. There was spillover from vegetable oils, including U.S. soybean oil futures, with drought in Canada hitting canola hard. 59% of U.S. beans are rated good to excellent, with the lowest ratings in the Dakotas and Minnesota, due to that drought in the northern and northwestern U.S. Plains, extending into the Canadian Prairies. The margin of error for this year’s crop remains razor thin because of historically tight ending stocks projections for both 2020/21 and 2021/22, which gets underway September 1st. Monday’s USDA supply and demand numbers were essentially neutral, with the department delaying a production and yield estimate until the August 12th supply and demand update. China’s General Administration of Customs says soybean imports for January to June of 2021 were almost 49 million tons, up nearly 9% from the first six months of last year. Soybean meal was mostly lower on spread adjustments ahead of the July contracts’ expiration.

Corn was modestly higher on fund and technical buying. 65% of corn is in good to excellent shape, up 1%, with near-term rain in the forecast for many areas. That rain is however expected to miss some of the drier parts of the region, including portions of Minnesota, North Dakota, and South Dakota. After that, most weather outlooks are generally drier and warmer for much of the region, heading into the later stages of the month. Also there are uncertainties about damage after crops were pummeled by hail in some areas and experienced flooding in others. That helped contracts shrug off what could have been construed as a neutral to bearish set of supply and demand estimates. The soon-to-expire July contract traded as high as $7.50 and ½ due to strong near-term demand and the lack of deliveries. China’s domestic corn prices have moved to multi-month lows recently but remain well above U.S. prices. China’s General Administration of Customs says imports during the first half of the year were 15.3 million tons, considerably larger than the same period in 2020. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. SovEcon estimates Russia’s wheat crop at 15.9 million tons, compared to the previous projection of 15.75 million. The trade is also watching second crop harvest activity in Brazil.

The wheat complex was mixed, mostly modestly lower. Minneapolis was mostly higher as spring wheat conditions continue to deteriorate with 55% of the crop now rated poor to very poor, up 5% on the week. That’s in stark contrast to a year ago, when 68% of the crop was in good to excellent shape. Those conditions are also impacting spring wheat in parts of Canada. Chicago and Kansas City were down watching winter wheat harvest activity and yield results. There are anecdotal reports of quality concerns in some hard and soft red winter areas, but those are still being assessed. Large portions of the white winter crop in the northwestern U.S. Plains have been effectively written off. Monday’s domestic USDA numbers were bullish, but the global outlook continues to be neutral to bearish, including record expected world production. SovEcon estimates Russia’s wheat crop at 82.3 million tons, compared to the last guess of 84.6 million, due to lower-than-expected winter wheat yields. DTN says Japan is tendering for 118,911 tons of food wheat from the U.S. and/or Canada, while Taiwan is in the market for 55,000 tons of U.S. milling wheat and Iraq is looking for 60,000 tons of milling wheat in an international tender.

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