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Wheat drops, corn extends losses

Soybeans were mixed, mostly lower, on bull spreading. Beans continue to watch the weather, with hot temperatures and mixed rainfall this week. Some northern growing areas could see rain, while other areas should remain dry. The big test will be weather during the first week of August, generally regarded as the critical month for U.S. soybean development. Soybean meal was sharply higher and bean oil was sharply lower on aggressive product spread adjustments. Wednesday morning, the USDA announced the sale of 272,000 tons of U.S. soybeans to unknown destinations, along with another 229,000 tons of beans also for unknown received during the reporting period. Both are for 2023/24 delivery, which starts September 1st. Those were the second and third reported sales of new crop U.S. beans this week, following Monday’s purchase by China. The USDA’s weekly sales numbers are out Thursday morning.

Corn was sharply lower on fund and technical selling. Corn is keeping an eye on forecasts for rain in the northern Corn Belt over the next few days. Large parts of the crop in other areas of the region are seeing hot, dry weather during pollination, likely lowering the yield potential. The USDA’s next round of supply, demand, and production estimates is out August 11th. Contracts were also pressured by the lack of new news from the Black Sea region, but not to the degree wheat was affected. The trade is also monitoring the second crop harvest in Brazil and the tail end of harvest activity in Argentina. The U.S. Energy Information Administration says ethanol production last week hit a near two year high at 1.094 million barrels a day, an increase of 24,000 on the week and 73,000 on the year, while stocks hit an 11-week high at 23.228 million barrels, 62,000 more than the previous week, but 100,000 less than a year ago.

The wheat complex was sharply lower on fund and technical selling. The trade is waiting for any new developments in the ongoing war between Russia and Ukraine. Fighting has reportedly moved away from export and storage infrastructure, at least for now, and there continues to be a lack of certainty about trade into and out of the region. The European Union is exploring export alternatives for Ukraine that don’t involve the Black Sea, while Russia continues to hold a big chunk of the export market, due to price. Rain in the northern Plains is probably too late to help spring wheat all that much, while winter wheat harvest progress this week is expected to be mixed. Results from an early spring wheat crop tour have also been mixed. The USDA’s attaché in Canada says 2023 wheat planted area was the highest since 2001, projecting production at 35.8 million tons, compared to 33.824 million in 2022, with exports of 26.5 million tons, compared to 25.1 million in the previous marketing year. The USDA office in New Delhi estimates 2023/24 wheat production at 108 million tons, compared to the official guess of 1.135 million and the year ago total of 104 million. The guess for India’s wheat stocks were revised lower on reduced government procurement.

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