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Wheat remains in freefall

Soybeans were mixed. Soybeans had an up and down day on follow through fund liquidation against oversold signals, with periodic influence from the losses in bean meal and gains in bean oil. The near-term supply remains very tight and domestic demand continues to be strong, but slow export demand is a big bearish factor. The market is controlled by Brazil, with their record harvest nearly complete. The USDA’s attaché in Brazil expects an even bigger crop in 2023/24, projecting production at 159 million tons, compared to 152.5 million in 2022/23 on an increase in planted area. 2022/23 exports are seen at a record large 95 million tons, with the office expecting that to climb to 98.1 million tons in 2023/24 because of solid exchange rates and a growing trade relationship with China. Brazil export group ANEC expects April soybean exports to hit 14.71 million tons. The USDA’s weekly U.S. sales numbers are out Thursday morning. Statistics Canada estimates 2023 planted area for canola at 21.597 million acres, 0.9% above 2022, with soybeans at 5.512 million acres, a jump of 4.5%.

Corn was lower on fund and technical selling. Corn took the path of least resistance while watching U.S. planting and development conditions. Near-term forecasts for the Midwest are mostly wet and cool, but some areas should be able to make some progress. Corn is also watching development conditions for Brazil’s critical second crop. Brazil grain group ANEC estimates April corn exports at 166,552 tons. CONAB’s updated Brazil outlook is scheduled for May 11th, with new USDA supply and demand numbers out May 12th. Statistics Canada pegs 2023 corn for grain planted area at 3.725 million acres, 2.8% more than last year. The USDA’s attaché in Argentina projects 2023/24 corn production at 54 million tons, compared to the drought ravaged 2022/23 crop, on expectations for a return to normal weather. Exports for the next marketing year are seen at 38 million tons, compared to 24 million this marketing year. The U.S. Energy Information Administration says ethanol production last week averaged 967,000 barrels a day, down 57,000 on the week, but up 4,000 on the year, while stocks hit a 14-week low at 24.306 million barrels, a decrease of 987,000 from the previous week, but an increase of 341,000 from a year ago.

The wheat complex was sharply lower on fund and technical selling. Kansas City was down on forecasts for rain in parts of the central and southern Plains, while Minneapolis is expecting improved spring wheat planting weather in the northern Plains. Chicago was pressured by the relatively good condition of the soft red winter crop. Statistics Canada projects 2023 planted area for all types of wheat at 26.968 million acres, a two-decade high, if realized, larger than expected ahead of the report, and up 6.2% on the year. That includes 19.39 million acres of spring wheat, 7.5% higher, and 1.516 million acres of winter wheat, a gain of 12.7%. The USDA’s attaché in Argentina sees 2023/24 wheat production at 19.5 million tons, compared to 12.5 million in 2022/23, but the department says that will require improved rainfall ahead of planting, which starts in June. 2023/24 wheat exports by Argentina are pegged at 13.7 million tons, compared to 5.8 million this marketing year. The trade is waiting to see what happens with the Black Sea Grain Initiative. The deal is unlikely to be renewed because of several complaints by Russia, including Moscow asking for the end of sanctions even as its offensive in Ukraine continues.

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