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Soybeans, corn, wheat recover some recent losses

Soybeans were sharply higher on commercial and technical buying. Contracts bought back part of last week’s losses, with no changes to the fundamental outlook. Weekly export inspections were bullish, with China the biggest single destination, followed by Mexico. Conditions look generally beneficial for South America over the next couple of weeks, further aiding production. Brazil is likely to produce a record crop, but while harvest is underway, it’s being slowed down by rain. Planting in both Argentina and Brazil was delayed by dry weather early in the season. AgRural has Brazil’s crop at a record 131.7 million tons, unchanged from the firm’s last guess. The USDA’s next set of supply, demand, and production estimates is out February 9th and quarterly grain stocks are due March 31st. Soybean meal and oil joined in the rally.

Corn was higher on commercial and technical buying. Corn also bought back part of last week’s losses while watching weather in Argentina and Brazil. Corn demand continues to be solid, with the U.S. holding a price advantage over other exporters. Weekly export inspections were bullish, with Japan and Mexico topping the recipient list. Sorghum inspections were also bullish, entirely to China. Grain movement to the Rosario port in Argentina has reportedly resumed following a recent truck strike. The trade is also watching conditions in the U.S. ahead of spring planting. The USDA’s Ag Outlook Forum in February will have the first official planted area estimates, with the prospective planting numbers out at the end of March. Ethanol futures were unchanged.

The wheat complex was higher on commercial and technical buying. Wheat bounced back, but without the solid fundamental backing of beans and corn. Even as U.S. supplies have tightened, global stocks remain near record large, and U.S. export demand has slacked off in the back half of the marketing year, with a bearish week for inspections. Most forecasts have more near-term precipitation in U.S. winter wheat growing areas, helping production prospects. The trade is also monitoring overwintering conditions in the European Union, Russia, and Ukraine, along with harvest activity in Australia. SovEcon estimates Russia’s upcoming winter wheat crop at 77.7 million tons, compared to 85.9 million in 2020. There has been no official update from Moscow on Russia’s upcoming export tax, but Russian wheat export prices were down last week in anticipated of the measure. DTN says Turkey bought 95,000 tons of wheat from an unknown origin and Taiwan is tendering for 85,340 tons of milling wheat. China reportedly sold almost all of the wheat on offer from state reserves in its weekly auction, most of that likely destined for feed use.

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