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Wheat extends gains with soybeans, corn mixed

Soybeans were narrowly mixed, mostly firm. Most forecasts have more rain in central and northern Brazil into next month, but there’s still a big deficit in some areas and planting remains slower than average. Conversely, large portions of southern Brazil continue to be excessively wet. CONAB’s updated outlook for Brazil is out December 7th, with new USDA supply, demand, and production numbers on December 8th. There’s a long way to go for South America, U.S. supplies are tight, and demand is solid. Wednesday featured more talk, but no confirmation, of new export demand from China, reflecting that solid demand, even as Beijing continues to also buy from Brazil. There was a sale announced to unknown destinations Monday. Soybean meal was mixed on bear spreading, while bean oil was mostly lower on spread trade and profit taking.

Corn was mostly modestly higher on spread trade and short covering. Corn is watching the soybean planting pace in Brazil and the potential impact on second crop corn planting. Planted area was already expected to be lower, but those soybean delays could cut even further into producers’ intentions. Conditions in Argentina are generally favorable, especially compared to last year. The exception for corn was the December contract, with traders exiting positions ahead of the first notice day on Thursday. The U.S. Energy Information Administration says ethanol production averaged 1.011 million barrels a day last week, down 12,000 from the week before and 7,000 from a year ago, with stocks of 21.379 million barrels, a decline of 273,000 on the week and 1.555 million on the year.

The wheat complex was higher on short covering and technical buying, with Kansas City taking the lead. Wheat continued to bounce off the recent lows, with U.S. soft red winter now competitively priced on the export market. Still, a lot of the recent rumored demand has not surfaced, with Russia, Ukraine, and other nations remaining at the forefront of global wheat business. That slow demand for U.S. wheat is largely canceling out any bullishness from tighter U.S. supplies and global weather issues. The USDA’s weekly sales numbers are out Thursday morning. Stateside, SRW conditions are good, while the HRW region needs more precipitation ahead of dormancy. That said – the crop, overall, will be going into dormancy in much better condition than it has in years. Heavy storms in southeastern Australia have caused some harvest delays and damage. Statistics Canada is set to release updated production estimates next Monday.

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