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Soybeans, wheat mixed as corn moves to new lows

Soybeans were mixed on spread adjustments. Contracts remain oversold, with the most active months up modestly, even with the demand concerns linked to the COVID-19 spread. There was also support from dry weather in parts of Argentina and Brazil, which has led some to lower their production outlooks. The Brazilian Soybean Producers Association reduced its’ outlook to 121 million tons, down 2 million on the month. Still, the combined South American crop will be large and their prices remain below U.S. prices, in some cases by significant margins. There’s been more talk about China buying beans from Brazil recently because of that price advantage. Phase one purchasing by China might not be aggressive until this summer. Operations at Brazil’s Santos port and Argentina’s Rosario port are reportedly back to normal. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. Meal had additional support from reports Argentina will quarantine ships from Europe for 14 days.

Corn was lower on fund and technical selling, establishing another round of new lows. The trade expects an increase in U.S. acreage, but that does depend on the weather and parts of the Corn Belt could see a wet start to spring. The USDA’s prospective planting numbers are out on the 31st, along with quarterly stocks data. Demand is a big question mark, not only for corn, but also ethanol with the drop in crude oil, which closed just above $20 per barrel Wednesday. That’s on expectations for less travel because of coronavirus, which would also lower blending demand for ethanol. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production last week averaged 1.035 million barrels a day, down 9,000 on the week, and stocks were 24.598 million barrels, up 264,000 on the week and the fourth largest inventory on record. The USDA’s attaché for Mexico projects 2020/21 corn production at 27.1 million tons, compared to 25.6 million in 2019/20, with total imports seen at 18.25 million tons, compared to 17.3 million during the current marketing year. Mexico’s sorghum crop is seen at 4.5 million tons, compared to 4.3 million in 2019/20, with imports from the U.S. at 750,000 tons, up 50,000 on the marketing year.

The wheat complex was mostly higher. Chicago and Kansas City were up – Paris milling wheat futures were higher heading into the U.S. session and there’s talk of China buying U.S. wheat. The USDA’s weekly export sales numbers are out Thursday at 8:30 Eastern/7:30 Central. Also, Coceral lowered its estimate for European Union soft wheat production to 135.4 million tons, the second reduction this week, and parts of the Black Sea region are dry. Minneapolis was steady to lower ahead of widespread spring wheat planting. The trade is also monitoring U.S. winter wheat conditions as the crop emerges from dormancy. More precipitation is in the forecast, welcome for hard red winter, but not most of the soft red winter crop. The USDA’s attaché in Mexico estimates 2020/21 wheat production at 3.3 million tons, compared to 3.29 million in 2019/20, with imports from the U.S. at 4.3 million tons, compared to 4.32 million this marketing year.

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