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Weather concerns support soybeans

Soybeans were higher on fund and technical buying but did finish below the day’s highs. 59% of U.S. beans are good to excellent, down 3% on the week and well below a year ago. The crop is nearly planted with USDA’s 2023 acreage totals and quarterly stocks numbers out on the 30th. Conditions are dry in many key growing areas with minimal chances for widespread rain in the next week. The emergence of El Nino is giving growers some hope, but the full effect of the pattern might not be felt until later this summer. CONAB says Brazil’s soybean harvest is nearly over for the season, pegging production at 155.737 million tons, up 0.6% from May’s already record projection and 24% from 2022. The top state of Mato Grosso accounted for 45.6 million tons and Bahia had the highest average yield. Brazil’s equivalent of the USDA expects 2022/23 exports to be 95.6 million tons. Soybean meal was up and bean oil was higher on the supply implications of a smaller U.S. soybean crop. Bean oil had additional support from renewable demand expectations and a higher move in crude oil following bullish inflation data.

Corn was mixed, mostly modestly higher. 61% of U.S. corn is good to excellent, the lowest rating for this time of year since 2019. It’s early, but some private firms are starting to lower their yield projections, coming in a few bushels below the USDA’s current guess of 181.5 bushels per acre. Second crop harvest is underway in Brazil, with CONAB raising its already record large projection. CONAB sees the second crop at 96.31 million tons, an increase of 0.2% on the month and 12.1% on the year, with total production at 125.715 million tons, which would be 11.1% larger than last year. CONAB has Brazil’s 2022/23 corn exports at 48 million tons. CONAB’s next projection for Brazil is out July 13th, the day after the USDA’s next supply and demand report. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was mixed, with Chicago modestly higher and Kansas City and Minneapolis mostly lower. Winter wheat development and harvest are both close to average, and the USDA’s spring wheat rating was down on the week. Dry weather is an issue in some wheat growing portions of the northern U.S. Plains, Argentina, Canada, Europe, and Russia. Any significant weather support is going to be limited by slow export demand. Russia continues to hold a big part of the export market due to a significant price advantage. The ongoing war between Russia and Ukraine is creating some concerns about the availability of Black Sea region grain, especially for poorer nations. CONAB estimates Brazil’s wheat crop at 9.774 million tons, 2.2% more than a month ago, but if realized, 7.4% less than a year ago. Brazil typically imports wheat from Argentina, but planting in that nation is behind average because of dry weather in some key growing areas.

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