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Wheat gains on weather concerns

Soybeans were modestly higher on short covering and technical buying. No new sales to China have been reported this week, but U.S. prices are competitive and both sides say Phase One plans will be met. That is despite continued disagreements over COVID-19, along with some other political and economic tensions between Beijing and Washington D.C. The trade is also watching U.S. planting weather and any signals of acreage adjustments away from corn. The USDA’s coronavirus aid payment plan was nominally supportive. Barge traffic on the Parana River is improving following a discharge of water, aiding the movement of beans from Argentina and Paraguay headed crush facilities. Brazil’s grain export group ANEC projects soybean exports for the second half of the month at 7.2 million tons. Soybean meal and oil were up, following beans. India is reportedly resuming palm oil from Malaysia.

Corn was mixed on spread adjustments, with nearby months down and deferred contracts steady to firm. Planting could be mostly wrapped up by the end of the month, with generally good weather near-term expected in many areas. Further delays and replanting are probable in parts of the Corn Belt, but again, the pace is generally expected to remain well ahead of average. The USDA’s planted acreage totals are out June 30th, along with quarter grain stocks numbers. The new coronavirus aid package for grain and oilseed producers had a minimal impact. Ethanol futures were lower. The U.S. Energy Information Administration says ethanol production last week average 663,000 barrels a day, up 46,000 on the week but down 408,000 on the year because of slower blending demand due to coronavirus related travel restrictions, with stocks at 23.626 million barrels, a week to week decline of 564,000. Corn is expected lower placements in this Friday’s USDA Cattle on Feed report, implying reduced feed demand. AgRural lowered its’ outlook for Brazil’s second crop to 66.7 million tons because of dry weather.

The wheat complex was higher on speculative and technical buying. The trade is monitoring winter wheat crop weather concerns, too dry for some hard red and too wet for part of the soft red crop, along with the slow spring wheat planting pace. Near-term forecasts have more dry weather in parts of the European Union, limiting production potential. Parts of the Black Sea region are also experiencing weather related issue, with Russia’s Ag Ministry lowering the total grain production estimate to 120 million tons, anticipating lower yields because of dry weather in April. The USDA’s next set of international production estimates is out June 11th. The trade is also monitoring a major hard red winter crop tour, with mixed results so far. DTN says Ethiopia bought 600,000 tons of wheat from an unnamed origin.

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