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Soybeans, corn, wheat drop after USDA numbers

Soybeans were sharply lower on fund and technical selling, pulling contracts to a modestly lower weekly finish. Soybean stocks were below a year ago, but larger than expected, with slower indicated fourth quarter disappearance. The stocks total also serves as the unofficial first guess for final 2022/23 U.S. ending stocks. The USDA did downgrade the 2022 production total slightly, but it wasn’t much of a factor due to the slower than anticipated export demand. There’s been talk, but no confirmation, of China switching some U.S. purchases to Brazil. Safras e Mercado projects 2024 soybean exports for Brazil at 99 million tons, compared to the 2023 guess of 98 million. U.S. harvest activity is ongoing with most forecasts showing minor near-term delays. Soybean meal and oil were lower, with meal leading the way down on heavier than expected first notice day deliveries for the October contract. Crush margins remain bullish but have narrowed.

Corn was lower on fund and technical selling, with the most active months steady to fractionally lower for the week. Quarterly corn stocks were a little smaller than expected, but that was more due to a downward revision for the 2022 crop than demand. Most of the region is expected to make good harvest progress over the next week. Mexico bought 223,540 tons of 2023/24 U.S. corn Friday morning. That was the second announced purchase by Mexico of the week for a total of 1,884,700 tons, with 1,273,311 of that for delivery this marketing year. Overall, export demand continues to be slow with reports of Ukraine shipping corn to China a bearish background factor. Corn is also monitoring planting weather in Argentina and Brazil and conditions for U.S. interior movement on the Mississippi River. The Buenos Aires Grain Exchange says 7.3% of Argentina’s corn crop is planted.

The wheat complex was sharply lower on fund and technical selling, adding to what already would have been a week of significant losses for the most active contracts. Quarterly wheat stocks were up on the year, while the wheat production total was above all pre-report expectations. That followed a better growing season for soft red winter than hard red winter. New crop winter wheat planting is moving forward, with most forecasts calling for minor near-term delays in the Midwest and Plains. There was also a general sense of bearish in ag commodities connected to concerns about a shutdown of the federal government. The trade continues to monitor crop weather in Argentina and Australia, along with exports out of the Black Sea region. Russia continues to hold a price advantage over most other origins and grain is moving out of Ukraine. The Buenos Aires Grian Exchange says 27% of Argentina’s crop is in poor to very poor shape.

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