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Soybeans up, wheat down, corn mixed after USDA reports

Soybeans were higher on commercial and technical buying. The USDA says the 2021 crop was record large at more than 4.4 billion bushels, with domestic ending stocks up on the month. The lone change to the domestic balance sheet was that increase in production, with no adjustments to exports or crush demand, but with a big jump in the average estimated farm price. World ending stocks were down, with reduced expectations for South America. The USDA now has Argentina at 46.5 million tons and Brazil at 139 million, also lowering exports for Argentina while leaving Brazil unchanged. The USDA also left soybean imports and crush demand by China steady with December, but those estimates could come down on February 9th. China bought 132,000 tons of 2022/23 U.S. soybeans, possibly tied to those declining production projections for Argentina and Brazil. Unknown destinations also bought new crop U.S. soybeans last week. The USDA’s weekly export sales numbers are out Thursday morning. Soybean meal and oil futures were higher. Soybean oil for biodiesel use was steady and exports were up, while soybean meal exports were down from December.

Corn was mixed, adjusting old crop/new crop spreads. The 2021 crop was more than 15 billion bushels with a record average yield and U.S. ending stocks were above a month ago on that upward revision for the crop and higher ethanol use against a reduction for export demand. The USDA did lower production for Argentina and Brazil but raised the outlook for Ukraine. Argentina and Brazil are pegged at 54 million and 115 million tons, respectively, and Ukraine is seen at 42 million tons. The USDA did leave South American exports unchanged, while increasing the projection for Ukraine. Ukraine has become a big competitor on the export market, especially for Chinese business. Unknown destinations bought 100,000 tons of 2021/22 U.S. corn Wednesday. The U.S. Energy Information Administration says ethanol production last week averaged 1.006 million barrels a day, down 42,000 on the week, but up 65,000 on the year, while stocks were a 47-week high at 22.911 million barrels, an increase of 1.552 million from the previous week, but a decrease of 781,000 from a year ago. The USDA raised the corn for ethanol use estimate to 5.325 billion bushels, compared to 5.25 billion last month and 5.028 billion last marketing year. Ethanol futures were unchanged.

The wheat complex was lower on fund and technical selling. Winter wheat planted area was a little bit larger than expected at 34.397 million acres, 2% above a year ago. Weather is a concern in most U.S. winter wheat growing areas, whether its dry to drought conditions across large swaths of the Plains or excessively wet weather in portions of the eastern Midwest. U.S. ending stocks were up from December as the USDA reduced imports, seed use, and exports, but while boosting the average estimated farm price by a dime to $7.15 per bushel. The spring wheat crop was down sharply on the year 331.14 million bushels, with sharply lower yield and harvested area totals due to drought in the northern and northwestern U.S. Plains. That drought also dramatically impacted Canada’s spring wheat crop. The trade continues to monitor U.S. conditions, in addition to overwintering weather in Europe and the Black Sea region, political tensions between Russia and Ukraine, and harvest activity in Argentina and Australia. Globally, the USDA raised production and ending stocks projections. Production guesses were higher for Argentina and the European Union, with the USDA increasing exports for the E.U., while decreasing the outlook for Russia.

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