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Another down day for soybeans, wheat

Soybeans were lower on fund and technical selling. Soybeans are watching the harvest and export paces for Brazil, in addition to conditions ahead of widespread U.S. planting. There are still some positives – the domestic cash basis is strong, supplies are tight, and unknown destinations bought 276,000 tons of old crop U.S. beans Wednesday morning. It remains to be seen who unknown is this time around. Normally, the assumption would be China, but with U.S. prices at a big premium to Brazil, that’s a question mark. There’s increasing talk of Brazil taking over Argentina’s role as the leading exporter of soybean products for this marketing year because of drought, even with Buenos Aires reimplementing its soy dollar program. Argentina’s Rosario Grain Exchange projects Brazil’s bean meal exports at 21 to 23 million tons. 80% of Brazil’s record crop is harvested. The USDA’s next set of supply and demand estimates is out Wednesday, April 11th, with CONAB’s updated outlook for Brazil scheduled for Friday, April 13th. The losses in soybean meal and oil contributed to the decline in soybeans.

Corn was mixed, mostly firm, on bear spreading and general consolidation. Unknown destinations bought 125,000 tons of 2022/23 U.S. corn, the second announced purchase this week. Monday, Mexico bought 2023/24 U.S. corn. There’s a chance Wednesday’s sale was to China, but the destination will remain unknown until this purchase is inspected and shipped. Ukraine continues to export corn, shipping 22.7 million tons since the start of the marketing year, but that’s pulling supplies sharply lower and sales next marketing year probably won’t be so robust because of the ongoing war impacting planting. There are also a lot of questions about Russia extending the Black Sea Grain Initiative. Corn is watching second crop development weather in Brazil with a chance of drier weather this month, along with early U.S. planting activity. Some near-term planting delays are likely in some areas, but most of the Corn Belt is expected to see a warmer, drier pattern starting next week. Flooding could be an issue in parts of the region as the snowpack in the northern Plains melts. The U.S. Energy Information Administration says ethanol production last week averaged 1.003 million barrels a day, unchanged from both last week and last year, with stocks of 25.136 million barrels, a decrease of 391,000 from a week ago and 767,000 from a year ago. The Renewable Fuels Association says February ethanol exports of 104 million gallons were 12% lower than the January total and DDGS exports of 764,494 tons were down 1%. Commodity markets are closed Friday for Good Friday.

The wheat complex was lower on fund and technical selling, along with the higher trade in the dollar during the session. Russia continues to control the export market, helped out by the ruble hitting one-year lows. The USDA’s weekly U.S. sales numbers are out Thursday morning. Crop weather issues in the U.S. Plains are on the back burner for now as Kansas City and Minneapolis led the way lower. That includes drought impacting yield, grading, and abandonment rates in the southern and southwestern U.S. Plains in addition to the probable spring wheat planting in portions of the northern U.S. Plains. Spring planting delays for wheat are also likely in parts of the Canadian Prairies. Soft red winter conditions are good, maybe a little wet in some areas. The USDA’s attaché in Egypt projects 2023/24 wheat imports at 10.8 million tons, 300,000 from 2022/23 due to population growth. Fallout from Russia’s war with Ukraine also contributed to slower imports in 22/23. The attaché in India sees 2023/24 wheat production at 108 million tons on an increase in planted area, higher yields, and generally better weather for most of the growing season.

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