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Weather concerns fuel more gains in the wheat complex

Soybeans were lower on profit taking and technical selling, ending the week narrowly mixed. The USDA left U.S. ending stocks unchanged from March despite a handful of adjustments, including higher exports, while raising the world number by a larger than expected amount. The guess for Brazil’s crop was up on the month, with production for Argentina holding steady. The USDA did raise exports for Brazil, while cutting Argentina slightly, and leaving imports by China unchanged. CONAB raised its estimate for Brazil Thursday. The Buenos Aires Grain Exchange lowered its outlook for Argentina by 1 million tons to 43 million because of dry weather earlier in the season, with 3.5% of the crop harvested. Argentina’s crush group says 46% of the crush industry’s capacity is idle, compared to 43% a year ago. The USDA did lower the crush guess for China, likely because of reduced feed demand tied to high bean meal prices and African swine fever. The USDA’s next set of supply and demand estimates is out May 12th. Soybean meal and oil followed beans lower.

Corn was mostly modestly higher on commercial spread adjustments, closing out the week with solid gains for old and new crop. The USDA made a slightly smaller than expected cut to U.S. stocks, also lowering the global carryout guess. The USDA lowered the production outlook for Argentina, but left Brazil unchanged and the export projection for China was also steady at 24 million tons. Beijing Friday raised its 2020/21 import outlook to 22 million tons. The Buenos Aires Grain Exchange left its corn production guess for Argentina steady at 45 million tons, adding 12% of the crop is harvested, compared to 21% on average. CONAB hiked its estimate for Brazil’s total crop earlier in the week, despite some expectations for yield loss due to planting delays. Near-term planting delays are probable in parts of the Midwest, with the USDA’s weekly crop progress and condition numbers out Monday afternoon at 4 Eastern/3 Central. Ethanol futures were unchanged. The USDA did raise the domestic corn for ethanol use guess, along with the export projection.

The wheat complex was higher on commercial and technical buying. The trade remains focused on crop weather concerns in parts of the U.S. for both winter and spring wheat. The most active months at the three exchanges posted strong week to week gains, with the best in Minneapolis because of dry weather in the northern and northwestern U.S. Plains and Canada, which could draw down spring wheat acreage even more than expected. Parts of the central and southern U.S. Plains could see a return to a drier pattern, while some U.S. soft red winter growing areas are at risk of excessive moisture. U.S. ending stocks were up on the month, while the world supply was down, falling below the 300-million-ton mark with less than a quarter left in the 2020/21 marketing year, due in part to a higher feed use guess for China. Still, global crop conditions generally look good at this point and most of the change was tied to increased demand expectations, not adjustments to production. DTN says Japan is tendering for 80,000 tons of optional origin feed wheat, while Tunisia bought 75,000 tons of soft wheat.

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