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Soybeans bounce, corn and wheat mixed

Soybeans were higher on short covering and technical buying. Soybeans and products are oversold, finding some support after the recent drop. Export demand for U.S. beans is slowing down as the harvest of Brazil’s record crop moves forward, while domestic demand remains solid. That demand, positive crush margins, and oversold signals supported soybean meal and oil. The USDA says the January 2023 soybean crush was 191 million bushels, up 4 million from December 2022, but down 3 million from January 2022, with the total 2022 crush 3% above 2021, reflecting that demand and those margins. China’s General Administration of Customs estimates February soybean imports at 6.5 million tons. Crop losses in Argentina due to drought are seen as a known, at least until the USDA likely lowers its projection in the next set of supply and demand estimates March 8th. CONAB’s updated outlook for Brazil is out March 9th.

Corn was mixed on bull spreading, with nearby contracts up and deferred months down. Corn consolidated following several days of losses, watching conditions in the U.S. ahead of spring planting. The USDA’s Ag Outlook Forum last week projected an increase in planted area and the second largest crop on record, with the prospective planting numbers out March 31st. Brazil could produce a record crop this year, even if some of the crop misses the optimal planting window, and losses in Argentina seem to be already factored in. The U.S. Energy Information Administration says ethanol production last week averaged 1.003 million barrels a day, down 26,000 on the week, but up 6,000 on the year, with stocks of 24.775 million barrels, a decrease of 813,000 from the previous week and 218,000 from a year ago. January’s corn for ethanol use was 443.551 million bushels, up 4% from December 2022, but down 4% from January 2022, with DDGS production of 1,714,389 tons, 2% more than the prior month, but 11% less than last year. The industry is waiting for the application of year-round, permanent E15 access in the Midwest.

The wheat complex was mixed, with Chicago and Kansas City up on an oversold bounce and Minneapolis steady to lower ahead of spring wheat planting. Most near-term forecasts have improved precipitation in the southwestern Plains. That could at least stabilize yield prospects and might limited abandonment, but the most recent set of USDA state crop weather stories showed the hard red winter crop in generally dismal shape. Soft red winter conditions are comparatively favorable. Export demand remains slow, with Russia and Ukraine holding most of the market share. The current version of the Black Sea Grain Initiative expires mid-month. Australia is also an emerging presence following another record crop, even if quality was below normal standards. The USDA’s weekly U.S. sales numbers are out Thursday morning.

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