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Soybeans, corn up on demand, weather concerns

Soybeans were higher on commercial and technical buying. The near-term domestic supply remains very tight, supporting the cash basis, and crush margins are solid. 91% of Brazil’s soybean harvest is complete, with Mato Grosso reportedly wrapped up for the season, and the trade is also watching early U.S. planting activity. As of Sunday, 3% of U.S. soybeans are planted, compared to 2% a year ago and the five-year average of 2%. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. Weekly export inspections were down on the week and the year, largely a reflection of the fast pace earlier this marketing year, with Mexico and Japan the top destinations. The current marketing year for beans, and corn, runs through the end of August.

Corn was higher on commercial and technical buying. Near-term forecasts have snow and rain in parts of the Midwest and Plains, along with cooler temperatures, while other areas will see more dry weather. The USDA says 8% of U.S. corn is planted, matching the normal pace, and 2% has emerged, compared to 1% on average. Similar to soybeans, the near-term domestic supply of corn is tight, with strong demand from end users, but the recent rally has led to an uptick in farmer selling. Parts of Brazil are very dry, only expected to see limited near-term rainfall, potentially stressing their critical second crop, and areas of Argentina could see harvest delays. Ethanol futures were higher. Weekly U.S. corn export inspections were down on the year, up on the year, and ahead of what’s needed to meet USDA projections for the current marketing year, with China and Mexico taking the top slots.

The wheat complex was mixed. Parts of the northern Plains will see some precipitation, but long-term outlooks are mostly dry, while near-term conditions in the central and southern Plains are mixed and some soft red winter areas are too wet. The USDA says 53% of U.S. winter wheat is rated good to excellent, steady on the week and down 4% on the year, with 10% of the crop headed, compared to 14% on average. 19% of spring wheat is planted, compared to the usual rate of 12%. There are also concerns about dry conditions in parts of Europe. The global supply fundamentals and slow U.S. export demand limited the upside. Weekly export inspections were up on the week and the year, with the Philippines and Thailand leading the list of recipients. The USDA’s next set of supply and demand estimates is out May 12th and new marketing year for U.S. wheat starts June 1st. The trade is monitoring a Russian troop build-up near Ukraine for any disruptions in shipping out of the Sea of Azov, through the Black Sea.

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