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Trade news supports corn, soybeans, wheat

Soybeans were higher on fund and technical buying, helping the most active months to double digit weekly gains. Phase one of the trade deal between the U.S. and China has been confirmed, but more details will need to be ironed out, including about purchases of U.S. ag goods. Reports have purchases in the tens of billions of dollars over two years, but not a lot of specifics have been reported. The December 15th tariffs will be averted and action will be taken on some duties, but President Trump says other tariffs will be used as leverage in phase two negotiations. Soybean meal and oil were higher, following beans. The National Oilseed Processors Association’s November member crush report is out Monday. On average, analysts see the crush at 172.032 million bushels, down from October, but still a monthly record. The trade is also watching crop conditions in Argentina and Brazil. ABIOVE sees Brazil’s 2020 soybean exports at 75 million tons, up on the year because of a smaller U.S. crop.

Corn was modestly higher on fund and technical buying, cementing the positive week to week close. China is also expected to buy more U.S. corn as a part of phase one. China typically doesn’t buy a lot of corn, the USDA increased their production outlook this week, pushing global ending stocks higher, but this would be viewed as a good faith measure. The USMCA still needs to be passed by Congress and NAFTA must be repealed. The probability of new U.S. tariffs on goods from the European Union is lingering in the background. Ethanol futures were higher. Corn is also watching development conditions in South America.

The wheat complex was steady to modestly higher, with the three major U.S. pits higher for the week. China is also expected to buy more U.S. wheat, but no specific amount has been announced for wheat either. Chicago and Minneapolis wheat, soft red winter and hard red spring, are probably the most obvious targets, given their uses for feed and blending, respectively. The trade is also watching dry conditions in parts of the southern Plains and the potential impact on the developing U.S. winter crop. The USDA’s next set of supply, demand, and production numbers is out January 10th. Russia’s Ag Ministry says it is looking for ways to restrict ag commodity sales if needed. That probably won’t be an issue this year. DTN says Japan bought 171,045 tons of food wheat from the U.S. and Canada.

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