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Soybeans, wheat rally as corn closes mixed

Soybeans were higher on commercial and technical buying. Beans are a little oversold after last week’s drop, with planting in Brazil about 75% complete, but still slower than normal. Parts of northern and central Brazil have recently received some rain, while there’s been less rainfall in southern areas, but some damage has likely been done. There will need to be replanting in key growing areas areas and there is talk of some farmers switching from soybeans to cotton. More private firms have downgraded their projections for Brazil’s crop due to the weather issues. CONAB’s updated outlook for Brazil is scheduled for December 7th. Those delays are linked to better demand for U.S. beans with unknown destinations buying 123,000 tons ahead of the open. That said – Brazil continues to export beans at a strong pace, with ANEC projecting November exports at more than 5 million tons, which would be considerably larger than last year. Farmers in Argentina are holding sales because of tight supplies, while anticipating a shift in trade and monetary policy under the incoming president. Soybean meal was mostly lower on bear spreading, while bean oil was up on demand expectations and a rally in crude oil.

Corn was mixed on bear spreading, with December and March both dipping to new lows for the move. Corn is watching the slow soybean planting pace in Brazil, which would push back second crop corn planting, potentially boosting U.S. exports. Brazil’s second crop is the largest of the three and the source of most of their exports. Most were already anticipating a smaller second crop due to better returns on beans. At 96%, the record U.S. harvest is essentially complete, aside from late delays in some areas. Near-term, U.S. corn is the lowest priced on the global market. The USDA’s next set of supply, demand, and production numbers will be released December 8th, with the preliminary 2023 production totals set for January. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out this Wednesday.

The wheat complex was higher on short covering and technical buying. Wheat found some support after the recent move to new lows, thanks in part to the lower dollar during the session, even with the USDA’s winter wheat condition rating now at its highest level in four years. 50% of the crop is called good to excellent, with another 35% rated fair, and the remaining 15% poor to very poor, with about 40% of the crop is in some stage of drought, well below a year ago. Still, there are definitely issues due to continued drought in parts of the central and southern Plains. Moscow has ordered monitoring of state grain reserves and there is some talk Russia will curb some exports to preserve domestic supplies, but nothing official, yet. The big bearish factor for wheat continues to be the slow export demand because of Russia’s price advantage, offsetting support tied to tighter U.S. and world supplies. Ukraine’s government has passed resolutions to expand port capabilities on the Danube River as Kyiv tries to keep exports flowing after the collapse of the Black Sea Grain Initiative. A storm this week in the Black Sea region is hampering movement for both Ukraine and Russia. The European Union’s crop agency MARS says winter crop plantings in some areas have been delayed by wet weather.

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