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Soybeans and corn lower as rain returns to South American weather forecast

Soybean fell on Tuesday as the market reacted to the weather forecast for South America. January beans closed at $13.12 and ½, Parts of central and northern Brazil are expected to receive beneficial rains, moving the region back to a more normal rainy season in January.  While a record crop is likely off the table for Brazil, it’s still better than average and the Argentine crop is expected to grow.  That should give U.S. soybeans plenty of competition moving forward.  Export sales for are off the estimated pace.  Soybean meal prices also fell on Tuesday.  Traders continue to watch as Argentina’s government announced it may increase the tax on soybean products by two percentage points.  CONAB’s updated outlook for Brazil is set for January 4th, with new USDA supply, demand, and production numbers on the 12th.

Corn was lower Tuesday, watching the weather in South America.  While hot and dry conditions have been in place in the central and northeastern parts of Brazil, it’s difficult to tell how much that could impact its second crop planting season.  Currently more precipitation is in the forecast through the end of the year and could hang around through January.  Transportation concerns are lingering as there are low water levels on the Mississippi River, there is restricted traffic at the Panama Canal, and many shippers are avoiding the Suez Canal because of the rebel attacks in the Red Sea.  There are also export shipping challenges into Mexico. 

Wheat was the only bright spot on Tuesday, contracts were oversold.    There is rain in the 6 to 10-day forecast for much of the HRW and SRW winter wheat areas with some rain also in the forecast for the Pacific Northwest.  Russia continues to dominate the export market as prices remain cheap comparatively.  And while there have been some rumors that more purchases of U.S. wheat, those have yet to materialize.

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