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Soybeans, corn, wheat up ahead of Memorial Day

Soybeans were higher on short covering and technical buying. Traders bought back some of the recent losses and pulled contracts to solid weekly gains, while watching U.S. planting and development weather. Near-term forecasts for most of the Midwest are warm and dry, which could cause some early stress. The critical month for soybeans will be August when the crop will be in the pod filling stage.
Soybean meal and oil were higher, following the lead of beans. There’s additional support from soybean products tied to export demand expectations due to the much smaller crop in Argentina. That could help offset some of the slowdown in global demand for U.S. soybeans, which has been hampered by Brazil’s record crop. The USDA’s next round of supply and demand estimates is out June 9th, with CONAB’s updated outlook for Brazil set for June 13th. Bean oil is also seeing speculative interest because of the potential for lower palm oil production in southeast Asia due to El Nino.

Corn was higher on short covering and technical buying, ending the week in strongly positive territory. Corn is keeping an eye on potentially stressful development conditions in the Midwest over the next couple of weeks. That’s in contrast to beneficial rainfall in some of the drier areas of the central and southern U.S. Plains. Commodity markets and most USDA offices are closed Monday for Memorial Day, pushing the weekly crop progress and condition numbers to Tuesday. Cash basis levels are firm, the near-term supply is tight, and domestic demand is solid. That’s even with some uncertainties about domestic livestock feed demand. Exports continue to be a bearish factor, with global buyers betting on a record second crop out of Brazil. Parts of Brazil are dry, but other areas have received recent rainfall and overall, all expectations are for a record second Brazilian crop on top of a possible record U.S. crop.

The wheat complex was higher on short covering and technical buying. Russia is reportedly restricting ship movement out of the Black Sea, limiting Ukraine’s exports. There are also reports of Russia slowing down inspections of the vessels that are being allowed to leave port. It’s unlikely this will help U.S. wheat exports all that much, but it’s possible. Russia continues to control the export market thanks to a significant price advantage. Early harvest activity is underway for U.S. winter wheat and spring wheat planting weather has improved. The weekly finish was mixed, down for July Kansas City despite rain in the southern Plains being too late to help, and up for July Chicago and September Minneapolis. France’s AgriMer says 93% of their soft wheat crop is in good to excellent condition.

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