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Fund liquidation pushes soybeans sharply lower

Soybeans were sharply lower on fund and technical selling. Harvest is moving forward and while there are minor delays and some yield concerns, it is early in the process. The USDA is already projecting a very tight supply, so any cuts to yield would have an impact on demand projections, with the next set of estimates out October 12th. Export demand has picked up a little steam, but the overall pace remains behind what’s needed to meet USDA projections. Last week’s big buyers were China and Japan. China’s General Administration of Customs says August soybean imports from Brazil were 9.09 million tons, a jump of 45% on the year and nearly all of the monthly total. Soybean meal and oil were lower, also seeing fund liquidation. Domestic crush margins remain bullish.

Corn was lower on fund and technical selling. Corn is watching harvest activity, expecting some near-term delays and keeping an eye on yield reports. Harvest weather is generally expected to be more conducive for activity next week. The trade is talking about a yield closer to 170 bushels per acre than the USDA’s most recent guess of nearly 174. Weekly export numbers were bearish with Brazil and Ukraine taking up a lot of the market share. The leading buyers of U.S. corn last week were two of the usual customers – Japan and Mexico – with no reported demand from China. Thursday, Mexico purchased 137,160 tons of U.S. corn, with 121,920 tons for delivery this marketing year and the remaining 15,240 tons for next marketing year. APK-Inform raised its production outlook for Ukraine to 25.6 million tons, projecting exports at 19 million tons.

The wheat complex was lower on fund and technical selling. The big bearish influence continues to be the slow export demand for U.S. wheat. Last week’s U.S. wheat sales were sharply lower than the week before, mainly to the Philippines and South Korea. Russia continues to dominate the export market, even if there have been a few signs of that dominance cracking, just a little, and Ukraine is still exporting some grain, using alternative routes after the collapse of the Black Sea Grain Initiative. APK-Inform increased its outlook for Ukraine’s wheat crop to 21.5 million tons, with potential exports of 12.5 million tons. SovEcon cut its guess for Russia to 91.6 million tons, citing a smaller crop in Siberia. The International Grains Council lowered its 2023/24 global production outlook by 1 million tons to 783 million, with gains in Russia and Ukraine canceled out by losses in Argentina, Australia, and Canada. Rain in parts of the central and southern U.S. Plains is welcome ahead of dormancy, even if it does delay winter wheat planting. Harvest is either wrapped up or very close to it for spring wheat in the northern U.S. Plains. The trade is also monitoring conditions in Argentina and Australia, both of which are experiencing drier than normal conditions, with Australia additionally seeing high temperatures.

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