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Soybeans up as U.S. and China talk trade

Soybeans were modestly higher on commercial and technical buying, with contracts ending the session near the middle of the day’s range. Trade talks between the U.S. and China are underway, running through Tuesday, and discussions with the European Union and Japan start Wednesday. Wire reports had China buying at least three cargoes of U.S. soybeans Monday, but with the government shutdown, there’s been no confirmation. The weekly export inspections report had less than 75,000 tons of the U.S. beans heading to mainland China last week, via the Pacific Northwest. The trade is also watching weather in South America. Dry parts of Brazil got some rain over the weekend, but longer-term outlooks are generally dry. Several analysts have lowered their projections for Brazil recently, citing weather. Soybean meal was up and bean oil was down on the adjustment of product spreads.

Corn was fractionally lower on fund and technical selling after a narrowly mixed session. Corn is also watching trade discussions and conditions in South America, along with any possible advancement in U.S. budget talks. The USDA numbers scheduled for Friday have been delayed indefinitely by the current federal shutdown. Those reports included new supply and demand estimates, along with 2018 corn and soybean production totals and winter wheat acreage. Even if the shutdown is ended prior to the January 11th release date, it’ll take time to fully collate and report the numbers, maybe as much as a week. Ethanol futures were lower. The industry continues to watch margins, wait for details on the implementation of year-round E15 use and keep an eye out for advances in trade discussions. In addition to U.S. corn, there’s been talk of China buying U.S. ethanol, sorghum, and DDGS.

The wheat complex was modestly lower on fund and technical selling. A private firm did lower its outlook for winter wheat planting late last week because of planting delay, either because of weather or the slow 2018 soybean harvest, but the fundamentals remain bearish, especially on the global side of the ledger. While there are new rumors of U.S. wheat demand from China, nothing has surfaced. The USDA’s most recent export inspections report was bearish but did show a small amount of U.S. wheat heading to China out of the PNW last week. DTN does report several open export tenders for wheat.

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