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Soybeans, corn end week on solid ground

Soybeans were higher on fund and technical buying, pulling contracts to a higher weekly finish. Beans continued to monitor weather in South America. Near-term forecasts had at least some rain in dry parts of Argentina and southern Brazil, but coverage and totals were uncertain. Conditions are generally more favorable in central and northern portions of Brazil and early harvest activity is underway in some areas. Agroconsult did increase its estimate for Brazil’s crop to 172.2 million tons, 11% above the prior year, with record exports of 105.1 million tons. There was also some ongoing support tied to the previous week’s USDA supply, demand, and production numbers. On top of that, there were some signals during the session that a potential trade war between the U.S. and China might be averted, at least for now. Still, export demand tends to be dictated by price more than geopolitics, and there’s been talk of China buying beans from Brazil in recent days. Soybean meal and oil were up on that higher tone in soybeans.

Corn was higher on fund and technical buying. Corn added to the week’s gains, watching conditions in Argentina and Brazil. Dry weather has caused at least some stress in Argentina, while Brazil’s big test is the second crop, which is planted after soybeans are harvested. Agroconsult left its projection for Brazil’s second crop at 107.3 million tons. Additionally, there was more support from the USDA cutting its U.S. ending stocks projection. Just over a quarter into the marketing year, that guess is well below 2 billion bushels and unlikely to rise significantly again between now and the end of August, unless there’s a big hit to demand. The USDA’s next round of supply, demand, and production numbers is out February 11th, with CONAB’s updated outlook for Brazil to follow a couple of days after.

The wheat complex was mixed, mostly firm, also ending the week mixed. Bitterly cold weather could have an impact on winter wheat in areas without sufficient snow cover. The trade’s also keeping an eye on winter wheat conditions in Europe, Russia, and Ukraine. Still, winter wheat tends to be a very resilient crop and the big indicator will be conditions when the crop emerges from dormancy in spring. Ukraine’s exports have slowed, Russia’s export cap goes into effect in February and while the U.S. could pick up some of that business, demand will likely be limited by the strength of the dollar relative to competing currencies. The Buenos Aires Grain Exchange says Argentina’s wheat harvest is complete, with a crop of 18.6 million tons. Commodity markets are closed during Monday’s regular session.

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