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Soybeans soar as wheat drops

Soybeans were sharply higher on commercial and technical buying. Old and new crop export sales were up on the week, with China back in the market, but still not at expected levels. Demand from China has been impacting by COVID lockdowns and unloading delays at port, while soybean demand in general has been somewhat impacted by relatively high prices and the recent trend in the dollar. China’s National Grain and Oil Information Center says that nation’s crush rate last week was lower than expected. There was also some spillover from a solidly higher move in bean meal, which was up solid demand and bullish crush margins. Bean oil was mostly lower following Indonesia’s decision to end its palm oil export ban. China has reportedly ended its ban on canola seed imports from Canada. Soybeans continue to monitor U.S. planting conditions and any signs of acreage adjustments. ANEC estimates Brazil’s soybean exports for May at 11.5 million tons, which would be below a year ago. The International Grains Council estimates 2022/23 world soybean production at 387 million tons, compared to 383 million in April and the 2021/22 total of 349 million tons.

Corn was mixed. Corn consolidated, keeping an eye on U.S. planting conditions, with more near-term delays expected in some areas, and development weather for the critical second crop in Brazil. Much of central Brazil is expected to remain dry, while southern Brazil has the change of a frost/freeze event in the near future. ANEC projects Brazil’s May corn exports at 1.26 million tons, considerably larger than last year, while AgroConsult lowered its outlook for that critical second crop, the source of most of their exports, to 87.6 million tons. Ethanol margins are good and China bought old and new crop U.S. corn last week. China has recently turned to U.S. corn in the absence of Ukraine. The International Grains Council projects 2022/23 world corn production at 1.184 billion tons, compared to 1.197 billion a month ago and 1.214 billion tons last growing season. The IGC also slashed global trade and consumption outlooks, while increasing ending stocks slightly.

The wheat complex was sharply lower on follow-through fund and technical selling. Old crop U.S. exports were a marketing year low, new crop was neutral, while recent estimates for Russia’s crop have moved higher. SovEcon has the crop at a record 88.6 million tons, compared to IKAR’s outlook for 85 million tons. There’s some rain in the forecast for parts of the southern U.S. Plains, but it’s too late for portions of the hard red winter crop, spring wheat planting delays persist in much of the northern U.S. Plains, and while soft red winter is in comparatively good condition, some growing areas remain excessively wet. India’s ag ministry lowered its wheat production outlook to 106.41 million tons, citing a surprise heatwave. India has become a significant wheat exporter and has recently filled some of the void left by Russia’s invasion of Ukraine. French firm Arvalis says drier than normal weather is lowering that nation’s crop production potential. The International Grains Council sees 202/23 world wheat production at 769 million tons, compared to 780 million last month and 781 million last marketing year. The IGC did increase trade by a small amount, but decreased projections for consumption and carryover.

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