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Trade talk optimism supports soybeans, corn

Soybeans were higher on commercial and technical buying. There’s more talk about a deal with China, but nothing’s been confirmed. China has reportedly acknowledged U.S. hacking and intellectual property concerns, two big sticking points in recent negotiations. Weekly export sales were larger than expected, with China last week’s big buyer. Soybean meal and oil were higher, following beans. The USDA and Statistics Canada say the two nations crushed 65.2 million tons of beans in 2018, up 10% from 2017, for crude oil production of 24.9 billion pounds, an increase of 2 billion on the year. The canola crush of 12.1 million tons was less than 1% above the year before, with crude oil production of 10.7 billion pounds, 1% higher. 75% of Brazil’s soybean crop has been harvested and Argentina is expected to produce a much larger crop this year than last year. The USDA’s attaché in Paraguay estimated 2019/20 soybean production at 10 million tons, compared to 8.8 million in 2018/19, thanks to improved weather conditions.

Corn was modestly higher on commercial and technical buying. Corn is also waiting to see what happens with China, while watching U.S. weather. More rain is expected over the next several days in some already very wet parts of the Delta, Midwest, and Plains. DTN says river traffic concerns appear to be declining, but there’s snow still melting in the northern Plains. The USDA’s next set of crop progress and condition numbers is out Monday at 4 Eastern/3 Central. Ethanol futures were lower, continuing to deal with margin concerns, large supplies, and slow export demand. U.S. ethanol is a potential purchase target for Beijing, along with corn, DDGS, and sorghum. Informa Economics projects Brazil’s corn crop at 94.5 million tons, up 500,000 from the previous guess, and has Argentina at 45 million tons, up 1 million. The USDA’s attaché for India expects 2019/20 corn imports to hit 1 million tons on growing feed demand.

The wheat complex was mixed, with Chicago adjusting spreads, Kansas City up modestly, and Minneapolis lower. Hard red winter conditions are good, but there are concerns about wet weather in soft red winter areas. Minneapolis continued to struggle, notching another round of contract lows, even with probable spring wheat planting delays in parts of the northern Plains. The fundamental outlook remains bearish, with new supply and demand estimates out Tuesday, April 9th at Noon Eastern/11 Central. Ahead of the report, most analysts expect slightly tighter domestic and world balance sheets. The USDA’s attaché in India projects 2019/20 wheat production at 100 million tons, the third record crop in a row. Exports are expected to remain minimal at 550,000 tons. DTN says Japan bought 84,254 tons of U.S. food wheat, along with 35,648 tons from Canada.

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