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USDA numbers send corn, soybeans, wheat higher

Soybeans were sharply higher on commercial and technical buying, establishing another round of new highs, with nearby months closing above $14. The USDA lowered the 2020/21 ending stocks estimate, 2020 production, and quarterly ending stocks, confirming the bullish supply and demand situation. The production guess for Argentina was down on the month, with Brazil holding steady for now. CONAB’s new production estimates for Brazil are out Wednesday. Most forecasts have good near-term rain for South America, but there are long-term uncertainties because of La Nina. The USDA also left the soybean import estimate for China unchanged. China’s ag ministry raised its 2020/21 soybean production and import estimates. Soybean meal was sharply higher, following beans, while bean oil was steady to firm on bear spreading inside of that pit. The USDA did raise bean meal exports and soybean oil for biodiesel use projections. Unknown destinations bought 120,000 tons of 2020/21 U.S. soybeans, the fourth business day in a row with an announced sale.

Corn was sharply higher on commercial and technical buying, with nearby months limit up, closing above $5. U.S. corn ending stocks were at the low end of estimates with a larger than expected cut in 2020 production and strong quarterly demand. Production projections for Argentina and Brazil were lower, while the import guess for China was higher. China’s ag ministry increased its expectation for corn imports but lowered the guess for domestic production. The USDA’s next set of supply and demand estimates is out February 9th, with updated quarterly grain stocks and 2021 prospective planting numbers due in March. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. Because of the slower pace of production, the USDA sees 2020/21 corn for ethanol use at 4.95 billion bushels, compared to 5.05 billion in November and 4.852 billion for 2019/20.

The wheat complex was sharply higher on commercial and technical buying. U.S. and world wheat ending stocks were below expectations on smaller global crops and overall solid demand. That canceled out a larger than expected increase for U.S. winter wheat acreage, up 5% from 2020, with higher planted area for hard and soft red winter offsetting a decrease for white winter wheat. Paris milling wheat was sharply higher heading into the session and the U.S. dollar index was lower during the session. The trade is also waiting to see what happens with Russia’s export tax and over-wintering conditions for Russia and Ukraine. Egypt’s ag ministry says it has five months of wheat in strategic reserves. DTN says Egypt is tendering for an unspecified amount of wheat, while Turkey is looking for 400,000 tons of milling wheat, Bangladesh is in the market for 50,000 tons of milling wheat, while South Korea is tendering for 75,000 tons of milling wheat from the U.S. and Canada.

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