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Another round of gains for soybeans, corn
Soybeans were higher on fund and technical buying. Most forecasts have a dry pattern in portions of Argentina, which could cause some damage and yield loss. Harvest delays due to rain are an issue in parts of northern and central Brazil. Still, analysts are generally projecting a very large if not record crop for Brazil, which could cancel out any losses in Argentina. Another source of support was reports China is suspending imports from some Brazilian exporters due to phytosanitary issues, while buying U.S. soybeans. That’s despite other exporters from Brazil remaining available and U.S. beans holding a significant premium over Brazil. The USDA’s weekly U.S. sales numbers are out Friday morning, delayed by Monday’s holiday. Soybean meal was mixed, adjusting spreads, and bean oil was up on oversold signals.
Corn was higher on fund and technical buying. Any significant delays in Brazil’s soybean harvest could have an impact on second crop planted area, which is planted after soybeans are harvested. The USDA’s next round of supply, demand, and production numbers is out February 11th, with CONAB’s updated estimates for Brazil set for February 13th. Overall demand continues to be solid, even as ethanol margins have narrowed. The U.S. Energy Information Administration says ethanol production last week averaged 1.099 million barrels per day, up 4,000 on the week and 281,000 on the year. Stocks hit a 40-week high at 25.874 million barrels, climbing 866,000 from the previous week and 59,000 from a year ago, while ethanol exports averaged 169,000 barrels per day, rising 44,000 from the week before and 48,000 from last year. The USDA’s attaché in China estimates 2024/25 corn production at 294.917 million tons, compared to 288.842 million in 2023/24, with imports of 14 million tons this marketing year, compared to 23.407 million last marketing year.
The wheat complex was mixed. U.S. winter wheat conditions remain mixed, with some areas seeing a thaw/freeze pattern, potentially causing some crop stress. Weather issues in Russia could push production to a multi-year low, with the trade also monitoring development conditions in Europe and Ukraine. Wheat continues to wait for Russia’s export cap to go into effect next month. The U.S. could pick up some of that business, but while the 2024/25 remains ahead of 2023/24 and some types of U.S. wheat are competitively priced against other origins, global demand has been slow. Argentina and Australia are expected to take at least some of that lost Russian market share. The USDA’s attaché for China pegs 2024/25 wheat production at 140.099 million tons, compared to 136.59 million in 2023/24, with imports of 11 million tons for the current marketing year, compared to the prior marketing year’s total of 13.635 million tons.
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