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Wheat higher on winter crop emergence concerns

Soybeans were narrowly mixed, mostly steady to firm. Beans are waiting for more details on phase one of the U.S./China trade deal, while watching the impact of near-term U.S. harvest delays. The USDA says 85% of U.S. soybeans are harvested, compared to 75% a week ago and the five-year average of 92%. Weekly export inspections were neutral to bullish, down on the month and the year, but more than what’s needed to meet USDA projections for 2019/20 and mostly to China. President Trump Tuesday indicated an agreement on phase one of the trade deal is close, saying China is “dying to make a deal” but didn’t announce a timeline or offer specifics. The president did say if a deal is not reached, he’ll raise tariffs. New U.S. tariffs on Chinese goods are scheduled to go into effect December 15th. South American crop weather generally looks favorable for planting and development. Brazilian soybean trading group ABIOVE says it opposes farmer efforts to end a moratorium on trading soybeans grown in recently deforested parts of the Amazon. AgRural says 58% of Brazil’s soybean crop is planted. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. Ukraine’s Ag Minister estimates 2019 soybean production at 3.6 million tons, slightly less than the USDA’s most recent guess.

Corn was higher on short covering and technical buying, along with some spillover from wheat. More near-term harvest delays are probable in parts of the Corn Belt, but after that, conditions generally look better for activity. As of Sunday, 66% of U.S. corn is harvested, compared to 52% last week and 85% on average. Still, parts of the region will remain wetter than normal and propane supplies are short in some areas. Export demand continues to limit any real upside, with another bearish week for inspections. Ethanol futures were lower. Corn is also watching planting and development conditions in Argentina and Brazil. Ukraine’s Ag Minister says this year’s corn crop should be about the same size as last year at 38.805 million tons, more than what the USDA is currently projecting. Ukraine has become a big competitor on the export market, along with Argentina and Brazil. France’s Ag Ministry has corn production at 12.566 million tons, compared to 12.503 million a year ago.

The wheat complex was higher on short covering and technical buying. Chicago and Kansas City were in the lead as winter wheat emergence has slowed down, but the soil moisture should be beneficial in the long-term. According to the USDA, 92% of winter wheat is planted, matching the usual pace, and 78% has emerged, compared to 81% typically this time of year. 54% of the crop is in good to excellent shape, down 3% on the week. The spring wheat basis has trended higher recently, with solid demand for high quality, high protein supplies. Weekly export inspections were above the mark needed to meet USDA projections for the marketing year. Ukraine’s Ag Minister says 2019 wheat production could be as large as 28.1 million tons, compared to the current USDA guess of 29 million. 95% of Ukraine’s summer grain crop is harvested, while 95% of winter grains have been planted. Russia’s Ag Ministry has wheat production at 75.6 million tons. Parts of Ukraine and Russia look dry, while some of the European Union’s wheat growing areas could see a wetter pattern. France sees 2019 soft wheat production at 39.487 million tons, compared to 34.045 million in 2018.

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