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Soybeans, corn down, but up from lows

Soybeans were lower on profit taking and technical selling. The trade gave back some of the recent gains, with spillover from profit taking in bean meal and a drop in crude oil. However, beans were above the day’s lows as the U.S. Drought Monitor does show expanding drought conditions in the Midwest, now covering nearly the entire region. Soybean oil was firm on an oversold bounce. Argentina is reportedly the second largest buyer of soybeans from Brazil this year, ahead of Spain and behind China. That’s due to a much smaller domestic crop caused drought and crushers needing beans to meet bean meal and oil demand. Argentina is the world’s largest exporter of soybean products. Brazil continues to occupy the top soybean sales slot due to a price advantage. The USDA’s weekly sales numbers are out Friday morning.

Corn was lower on profit taking and technical selling. Corn is watching the weather and probable stress, with more accurate forecasts generally showing only scattered rain this weekend in parts of the Corn Belt. That won’t be enough to break those expanding drought conditions in some key growing areas. There was also possibly a delayed reaction to Wednesday’s ethanol RFS numbers. The U.S. Energy Information Administration says ethanol production last week was a 27-week high, averaging 1.052 million barrels a day, an increase of 34,000 on the week, but a decrease of 3,000 on the year. Ethanol stocks were reported at 22.804 million barrels, 578,000 more than the previous week and 672,000 less than last year. The USDA’s next corn for ethanol use is out in the supply, demand, and production update on July 12th.

The wheat complex was mixed, with Chicago and Minneapolis up and Kansas City mostly higher. Winter wheat harvest weather generally looks good in most of the central Plains and while there have been reports of better-than-expected yields in some areas, abandonment should be up sharply on the year. There is rain in the forecast for parts of the spring wheat growing region, but coverage and totals are uncertain. Questions about how many acres of spring wheat were planted this year will be answered June 30th in the planted area totals. There are also crop weather concerns in parts of Canada, Europe, and Russia. Additionally, the wheat production guess for India is generally regarded as about 10% too large, which could lead India to import. Ukraine is reportedly shifting exports from the Black Sea region to Danube River ports in an attempt to circumvent some of the issues associated with the Black Sea Grain Initiative. Russia continues to indicate it will not agree to an extension of the grain deal when the current version of the pact expires next month.

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