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Soybeans surge on Argentina weather woes

Soybeans were sharply higher on speculative and technical buying, along with the higher dollar, but still closing lower on the week. Just 8% of Argentina’s soybean crop is rated good to excellent with more hot, dry weather in the forecast. That also supported soybean meal and oil as Argentina is usually the world’s largest exporter of soybean products. This crop damage will likely improve demand for U.S. soybean products, at least to some extent. Unknown destinations bought 132,000 tons of 2022/23 U.S. soybeans ahead of the open. Weekly numbers weren’t great, but it was a holiday week, soybeans were one of the few commodities to see an improvement, and the pace of shipments was above what’s needed to meet projections for the current marketing year. The top purchasers were China and Turkey, with a net cancellation by unknown destinations. 2023/24 sales were also solid, mostly to China and unknown.

Corn was mixed, mostly firm, ending the week with sharp losses. 13% of Argentina’s corn crop is called good to excellent, down 2% on the week and well below a year ago. The Buenos Aires Grain Exchange says 40% of the corn crop in central growing areas has been lost. Parts of southern Brazil are dry, but the big test will be how the second crop performs. CONAB’s updated outlook for Brazil is scheduled for January 12th, along with several reports from the USDA: preliminary 2022 corn and soybean production totals, quarterly grain stocks, and supply and demand numbers. Corn export sales were down from the previous week, with Mexico and Honduras leading the way, but with a cancellation by unknown destinations. Ahead of Friday’s open, Mexico bought 112,000 tons of U.S. corn, with 89,600 tons for 2022/23 and 22,400 tons for 2023/24.

The wheat complex was lower on fund and technical selling, adding to the week-to-week decline. Near-term forecasts have continued dry conditions in the southwestern U.S. Plains, likely limiting hard red winter yield potential. Conditions for the soft red winter crop are comparatively good, with some states showing an improvement in condition ratings over the past month. The USDA’s winter wheat seeding numbers are out Thursday, January 12th. Still, even as U.S. and global supplies grow tighter, export demand for U.S. wheat remains very slow due to the relative strength in the dollar. Russia and Ukraine continue to hold most of the global wheat market. Ukraine’s government says export movement out of the Odesa port on the Black Sea has resumed. Ukraine’s winter crops are moving into dormancy even as last year’s crops are still being harvested due to delays from Russian attacks. Weekly U.S. wheat export sales were about a tenth of the prior week, failing to break 48,000 tons. The big buyers were China and Thailand. Private estimates now have Australia’s wheat crop as large as 42 million tons thanks to better-than-expected yields.

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