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Wheat gains, watching Black Sea tensions

Soybeans were firm to higher on short covering and technical buying. Domestic crush margins have narrowed a little but remain solidly in positive territory. U.S. export demand continues to be a question mark ahead of Thursday’s weekly numbers. China has been able to source beans outside of the U.S. recently due to high prices and political tensions, with that nation on holiday next week. It was an up and down session, with traders watching product prices, the broader market, and early U.S. harvest activity. Pre-planting and planting activities are ongoing in Argentina and Brazil. Argentina’s Agriculture Secretariat says old crop soybean farmer selling slowed down last week ahead of the end of Buenos Aires’ soy dollar plan Friday. New crop sales are slower than average ahead of widespread planting. Soybean meal and oil were mixed, adjusting spreads. The Indian Vegetable Oil Producers Association projects 2022/23 vegetable oil imports at 14 million tons, with palm oil accounting for 8 million tons, 3.5% higher, soybean oil at 3.6 million tons, 11% lower, and sunflower oil at 2.25 million tons, up 19%.

Corn was modestly higher on short covering and technical buying. Corn is largely ignoring the harvest and slow demand, sticking to the current uptrend, with some help from wheat and the dollar. The U.S. Energy Information Administration says ethanol production last week averaged 855,000 barrels a day, down 46,000 on the week and 59,000 on the year, with stocks of 22.691 million barrels, up 190,000 from the prior week and 2.471 million from a year ago. Quarterly grain stocks numbers are out Friday at Noon Eastern/11 Central. The trade is also watching early planting activity in South America. Argentina’s Agriculture Secretariat says old crop farmer selling was lower last week even as new crop sales shot higher. Widespread rain is falling in parts of Brazil, helping first crop planting, but the big test will be the performance of the second crop, which is planted after soybeans are harvested.

The wheat complex was higher on commercial and technical buying, along with a lower move in the dollar during the session. The trade continues to wait for possible disruptions to Black Sea trade with expectations for Russia to step up attacks in Ukraine. Vladimir Putin has not ruled out the use of nuclear weapons and has increased conscription, with the U.S. warning Americans to leave Russia. Moscow was already unlikely to extend Ukraine’s Black Sea export corridor past November 22nd. Persistent drought conditions are a big concern in the southwestern U.S. Plains and Argentina. Argentina’s Agriculture Secretariat says old and new crop wheat sales by farmers declined last week. Stateside, the trade is monitoring winter wheat planting, including the potential limiting of acreage in the southern and southwestern U.S. Plains. The USDA’s small grains production summary is on the schedule for this Friday, while the next set of global supply, demand, and production numbers is out October 12th.

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