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Wheat, corn fall on Russian reversal

Soybeans were modestly higher on commercial and technical buying. Contracts were down early, but rallied on demand, crush margins, and the strength in soybean oil, which was supported by strong global vegetable oil demand, especially palm oil. The USDA’s weekly export sales numbers are out Thursday morning. There haven’t been many splashy export sales announcements, but demand has been fairly consistent. Beans are watching the U.S. harvest and planting weather in Argentina and Brazil. Brazil’s government is reportedly clearing roadblocks put in place in protest of the results of this past Sunday’s presidential election. It’s unclear how much of an export delay has been caused by those blockades. Soybean meal was mostly lower on spread trade and commercial selling.

Corn was lower on profit taking and technical selling. Russia says it’s not leaving the Ukraine grain deal after all, but the Black Sea situation remains fluid. That move by Moscow reverses the statements made earlier this week, with Kyiv saying it will not use the corridor for military purposes. While export demand continues to be slow, domestic demand is good. The U.S. Energy Information Administration says ethanol production last week averaged 1.04 million barrels a day, the higher average since late July and up 7,000 on the week, but down 67,000 on the year, with stocks of 22.232 million barrels, a decrease of 59,000 from the week before, but an increase of 2.103 million from a year ago. China has updated its list of acceptable corn exporters from Brazil, a signal that Beijing could start importing GMO corn from Brazil in the near future. Prior to the invasion by Russia, Ukraine had been a key corn supplier for China.

The wheat complex was sharply lower on profit taking and technical selling. Wheat responded to Moscow staying in the Ukraine grain export deal, at least for now. That being said – the current export agreement ends later this month, with minimal reported progress on an extension amid continued conflict in Ukraine. Rain is in the near-term forecast for some U.S. winter wheat growing areas, with mixed coverage in dry areas of the Plains. Still, it’s not expected to break drought and the bigger test for U.S. winter wheat will be conditions when the crop emerges from dormancy in spring. The USDA’s attaché in India estimates 2022/23 wheat production at 99 million tons, unchanged from their last guess, with exports of 5.5 million tons, a drop of more than 30% from 2021/22.

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