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Soybeans, corn, wheat drop

Soybeans were sharply lower on fund and technical selling, along with spillover from world vegetable oils and the broader market. There was talk that China has canceled on U.S. beans, switching to Brazil, but there was no confirmation. Export inspections were bearish, just over 350,000 tons, mainly to Mexico and Germany, with only a routine amount on the way to China. Near-term weather looks hot and dry in parts of the region ahead what’s expected to be a more seasonal pattern. The USDA says 63% of U.S. soybeans are in good to excellent shape, down 3% on the week, with 96% of the crop emerged, matching the five-year average, 16% blooming, compared to 22% on average, and 3% at the pod setting stage, equaling the normal pace. Soybean meal and oil dropped on recession concerns, with bean oil picking up additional pressure from the losses in vegetable and crude oils. Those losses in vegetable oils were despite heavy weekend rainfall in parts of eastern Australia jeopardizing the canola crop. Statistics Canada says producers in that nation planted 21.416 million acres of canola this year, 4.7% less than 2021 following switches to cereal crops. Soybean planting in Canada was pegged at 5.274 million acres, 0.9% less than last year.

Corn was sharply lower on commercial and technical selling. Corn was also watching U.S. development conditions, expecting another slight week-to-week decline in the USDA rating. As of Sunday, 64% of U.S. corn is rated good to excellent, 3% lower, and 7% of the crop is silking, compared to 11% on average. New USDA’s supply, demand, and production numbers are out on Tuesday, July 12th at Noon Eastern/11 Central. Significant changes to the production outlook will wait until August, if not later, but this round of numbers will use the USDA’s updated acreage total. Export inspections were down sharply on the week and the year, with Mexico and Japan topping the list. The USDA’s attaché is projecting Brazil’s 2022/23 corn crop at 120 million tons on higher planted area, strong demand, and better than expected fertilizer availability. The 2021/22 crop was pegged at 120 million tons. 2022/23 exports are seen at 46.5 million tons, compared to the official guess of 47 million and the 2021/22 total of 44.5 million. AgRural says 31% of Brazil’s second crop has been harvested. CONAB’s next round of estimates for Brazil is out Thursday. Statistics Canada says producers planted 3.633 million acres of corn, 4.1% above a year ago.

The wheat complex was sharply lower on fund and technical selling. Wheat is very oversold, but demand is slow and Paris milling wheat was lower ahead of the U.S. session. For winter wheat, 31% of the crop is called good to excellent, 1% higher, with 54% harvested, compared to 48% normally in early July. For spring wheat, 66% of the crop is reported as good to excellent, a gain of 7%, and 20% has headed, compared to 57% on average. Negotiations on an export corridor for Ukraine in the Black Sea have reportedly resumed. This round of talks does directly involve Ukraine, in addition to Russia and Turkey. The anticipated boost in U.S. exports because of Russia’s invasion of Ukraine and crop damage in India has not happened. U.S. export inspections were below last week and last year, mainly to Mexico and Colombia. Egypt reportedly bought 444,000 tons of wheat over the weekend, including 214,000 tons from Russia, 170,000 tons from France, and 60,000 tons from Romania. U.S. prices are competitive, but that’s at least somewhat blunted by freight costs. The USDA’s attaché in Brazil sees 2022/23 domestic wheat production at 8.7 million tons, compared to the official guess of 8.5 million and the 2021/22 total of 7.74 million, with the increase in planted area tied to global demand. The USDA does expect Brazil to remain a net importer of wheat, with exports only up slightly from last marketing year. Heavy weekend rainfall in parts of eastern Australia likely had some impact on the wheat crop. Statistics Canada says producers planted 25.395 million acres of all types of wheat, the largest in a decade and 8.7% more than in 2021, including 18.212 million acres of spring wheat, 10.5% higher.

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