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Soybeans down Friday, still up on week

Soybeans were modestly lower on fund and technical selling, but still saw a good weekly gain after the post-USDA report jump on Monday. The outside markets were mostly bearish Friday on concerns about inflation and domestic and global economic growth. Demand from China in the delayed sales reports was better than expected, limiting losses. That demand was despite concerns about China’s economic health impacting purchases. The USDA did recently lower its 2022/23 soybean import guess for China. The USDA’s next set of supply and demand estimates is out October 12th. Soybean meal was lower and bean oil was higher, adjusting product spreads. Bean oil had additional support from bullish NOPA stocks numbers. The trade is also monitoring conditions in South America as planting starts to pick up steam.

Corn was mixed, mostly firm, ending the week modestly lower. The USDA is projecting a 10-year low in U.S. ending stocks, cancelling out some of the concerns about demand. That’s not only export demand, with the U.S. losing market share to Brazil and Ukraine, but also domestic demand for ethanol use. The trade expects the USDA to report good week-to-week harvest progress in the Monday crop progress and condition update, out at 4 Eastern/3 Central. Corn planting in Argentina is reportedly being delayed by drought conditions in some key growing areas. Production in South America will likely see at least some impact from a third consecutive La Nina event expected to fully get underway this winter.

The wheat complex was higher on fund and technical buying, helping the U.S. pits finish the week in the black. Most forecasts have more hot, dry weather in parts of the southern and southwestern U.S. Plains, potentially limiting hard red winter acreage. Soft red winter planting conditions in the eastern Midwest are comparatively better. The spring wheat harvest in the northern U.S. Plains is close to wrapping up, with the USDA’s small grains production summary out on the 30th.  The trade is also watching planting issues and export uncertainties in Ukraine. Russia’s attack on Ukraine has also had a significant impact on grain storage, with 15.73% of storage facilities destroyed. Russia has reportedly harvested 96.4 million tons of wheat. The Rosario Grain Exchange says 70% of Argentina’s wheat crop is rated fair to poor, up 16% on the week following recent frost/freeze events, which is expected to slash yields.

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