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Soybeans up on demand factors

Soybeans were modestly higher on short covering and technical buying. Crush margins are strong, weekly export inspections were bullish, and soybean meal was up on commercial support. Soybean oil finished firm, rallying as crude oil recovered from the session lows. Soybean export inspections were above 2.3 million tons, mainly to China and Mexico. China’s zero-COVID policy and the impact on demand are wildcards for U.S. soybean export demand. That’s also because of Brazil’s expected record new crop. Safras e Mercado sees Brazil’s 2023 soybean exports at 93 million tons, compared to 77.2 million for 2022. Planting and development conditions in South America continue to generally favor Brazil over Argentina. AgRural says recent rainfall has delayed planting somewhat in Brazil, but that should help set up good development conditions. The U.S. harvest is officially wrapped up for the year. The USDA’s next set of supply, demand, and production estimates is out December 9th, with the preliminary final 2022 production numbers scheduled for January 12th. China’s General Administration of Customs says it bought 923,176 tons of soybeans from Argentina in October, up sharply on the year following Buenos Aires’ “soy dollar” experiment. Imports from Brazil and the U.S. were down from September, but up at least slightly on the year.

Corn was lower on fund and technical selling, along with higher trade in the dollar. Near-term harvest weather looks mixed with a lot of snow on the ground in some areas against good conditions in others. The USDA says 96% of U.S. corn is harvested, compared to the five-year average of 90%. Low river levels continue to limit interior movement. Long Export inspections fell short of a half million tons, below both last week and last year, with Mexico and China leading the way. Long-term demand from both China and Mexico remains a question mark because of Mexico’s impending ban on GMO corn imports and because of trade patterns between China, the U.S., Brazil, and Ukraine. Still, Chinese business with Ukraine has been hampered by Russia’s invasion and some of Ukraine’s crop might sit in the fields for months. Ukraine’s Ag Ministry says half of their corn crop is harvested, with APK-Inform projection production at 27.5 million to 27.9 million tons, well below the 2021 total. There’s more rain in the forecast for parts of Brazil against dry weather in Argentina. The Buenos Aires Grain Exchange says 24% of Argentina’s corn crop is planted, with just 11% is in good to excellent condition. CONAB’s updated outlook for Brazil’s new crop year is out December 8th.

The wheat complex was mostly lower on the higher dollar and disappointing export demand despite tighter global supplies. That trade in the dollar and slow export demand for U.S. wheat remain fully linked. Export inspections were up on the week and the year, Yemen and Mexico topped the list, and while they are on pace to meet USDA projections, those projections have been downgraded. The trade is also monitoring recent developments in the Black Sea region. There was more Russian aggression against Ukraine over the weekend following the extension of the grain export agreement, but for now, shipping lanes are open. Most forecasts have another round of dry weather in the U.S. Plains with mostly warmer temperatures. As of Sunday, 87% of U.S. winter wheat has emerged, compared to 86% on average, with 32% of the crop rated good to excellent, steady with a week ago. India’s winter wheat acreage is expected to be up on the year.

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