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Corn down, soybeans and wheat mixed after WASDE

Soybeans were mixed on bull spreading. The USDA lowered U.S. ending stocks 15 million bushels to 210 million, with a cut in crush canceled out by higher exports and the department reduced the crop estimate for Argentina because of ongoing drought. Argentina’s crop is now seen at 33 million tons, 8 million less than the February estimate, which pulled global production lower. The USDA also lowered exports by Argentina and raised the import projection as Argentine crushers try to meet customer demand. Argentina’s usually the world’s largest exporter of soybean products. Brazil’s exports were up slightly on the month and there were no changes to imports by China, but the crush guess was down slightly. The big focus continues to be the harvest of Brazil’s record crop, which is about 50% complete. A representative from Oil World told a conference this week world vegetable oil supplies are expected to get much tighter during the second half of 2023 because of production not meeting demand. Soybean meal futures were lower and bean oil was higher on the adjustment of product spreads.

Corn was lower on fund and technical selling. U.S. ending stocks were up 75 million bushels on the month at 1.342 billion bushels following a reduction in exports and Argentina’s crop estimate was down 7 million tons due to drought, now at 40 million. The USDA also cut Argentina’s export outlook and raised the guess for Ukraine. Brazil’s second corn crop is 70% planted, with CONAB’s new estimate out Thursday. There’s been more talk but no confirmation of China buying U.S. corn, with the USDA’s weekly sales numbers also out Thursday. The U.S. Energy Information Administration says ethanol production last week averaged 1.01 million barrels a day, up 7,000 on the week, but down 18,000 on the year, with a domestic supply of 25.32 million barrels, an increase of 545,000 from the previous week and 49,000 from a year ago. The Renewable Fuels Association says January ethanol exports were an eight-month high at 117.8 million gallons, a jump of 59% from December, with Canada taking the top slot for the 22nd month in a row. DDGS exports fell 13% to 770,344 tons, with Mexico topping the list for the seventh consecutive month, despite shipments hitting a nine-month low.

The wheat complex was mixed with Chicago and Minneapolis down on fund and technical selling and Kansas City mostly lower in consolidation trade. There were no changes to U.S. ending stocks, holding at 568 million bushels at the start of the final quarter, while world ending stocks were down, even with a big increase in production. That rise in production was on increases for Argentina, Australia, Brazil, India, and Kazakhstan, while the USDA continues to hold Russia at 92 million tons, under most other projections. Exports were down for Argentina and India, up for Australia and Kazakhstan. The trade is monitoring forecasts for more precipitation in many key U.S. wheat growing areas, except for parts of the southwestern Plains, which could really use it. Export demand for U.S. wheat remains slow as Russia and Ukraine continue to control large chunks of the market. The Black Sea Grain Initiative expires the 18th and reports have Turkey working with both sides to reach an extension. Ukraine wants access to more ports, while Russia is insistent sanctions be dropped, even as the war continues.

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