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Soybeans, corn, wheat up strongly on weather worries

Soybeans were sharply higher on speculative and technical buying. The USDA’s national soybean good to excellent condition rating fell 5% following another week of mostly dry weather on some key U.S. growing areas. While the critical month for soybeans is August, conditions during these early development phases will inform this year’s yields to some degree. Soybean oil was mostly limit down on the EPA’s lower than expected conventional biodiesel numbers in the RVO. That also impacted global vegetable oil prices. Soybean meal was up sharply on demand expectations and product spread adjustments. Export demand for U.S. beans, especially from China, continues to be limited by Brazil’s price advantage. Brazilian export group ANEC projects that nation’s June soybean exports at 14.3 million tons. The USDA’s weekly sales numbers are out Friday morning, pushed back by Monday’s holiday.

Corn was sharply higher on speculative and technical buying. The USDA’s national rating for corn was down 6% including significant drops in some of the top Corn Belt production states. There are chances of rain in the forecast, but coverage and totals are uncertain, and some yield potential has likely been lost. The USDA’s next set of supply, demand, and production numbers is out July 12th. The U.S. Energy Information Administration’s weekly ethanol numbers are out Thursday. The EPA’s new ethanol RVO numbers had a limited effect on those gains in corn. The European Commission says European Union corn imports from the start of the marketing year July 1st, 2022 through June 18th are 25.3 million tons, compared to 16.1 million a year ago. Brazil’s second crop harvest is moving forward, with their FOB prices below U.S. prices, limiting global demand for U.S. corn.

The wheat complex was sharply higher on speculative and technical buying. The USDA’s spring wheat condition rating declined, but there are better chances for rain in that region than in some others. There are rain related winter wheat harvest delays in parts of the central and southern Plains. It’s far, far too late to be of any real help to the hard red winter crop and might be further cutting quality, but that will help recharge soil moisture, to some extent, ahead of new crop planting. The European Commission says European Union soft wheat exports since the start of the marketing year are 30.4 million tons, compared to 27.3 million this time last year. China’s wheat harvest is nearly complete, with pre-harvest rain and wind in Henan causing significant damage, which is expected to lead to an increase in imports, especially from Australia. There’s about a month remaining in the current version of the Black Sea Grain Initiative and Moscow is claiming there are “no grounds” for an extension to the deal. Ukraine’s exports and planting have been severely curtailed by the ongoing war with Russia. SovEcon estimates Russia’s 2023/24 wheat crop at 86.8 million tons, 1.2 million less than the prior projection.

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