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Soybeans, corn find some support at midweek

Soybeans were higher on short covering and technical buying. Beans were back to focusing on weather and the hot, dry pattern expected to emerge in the Midwest later this week. That could cause at least some stress during key phases of development, potentially lowering yield at a time when the USDA is already projecting a fairly tight carryover. The new marketing year for soybeans, and corn, starts September 1st, while the USDA’s next set of supply, demand, and production numbers is out September 12th. Soybean meal and oil were up, following beans. Grain group ANEC projects Brazil’s August soybean exports at 7.78 million tons with soybean meal exports at 2.05 million tons, both of which would be up on the year. China continues to be a big customer for Brazilian soybeans, but that’s expected to slow down after the record pace earlier in the year.

Corn was higher on short covering and technical buying. Corn was oversold and due for a bounce, also watching the weather and that return to hot, dry conditions. It’s more of an issue for beans than corn, but any drop in quality would be an issue. Ethanol margins are solid. The U.S. Energy Information Administration says ethanol production averaged 1.069 million barrels a day last week, an increase of 46,000 from the previous week and 86,000 from a year ago. Ethanol stocks swelled to 23.435 million barrels, a 16-week high, and up 555,000 on the week, but down 11,000 on the year. Export demand is slow, but U.S. prices are now competitive for exports against Brazil through November. The USDA’s weekly sales numbers are out Thursday morning. Grain group ANEC sees Brazil’s corn exports for August at 9.03 million tons, which would be well above last year. China’s government says recent flooding in northeastern grain growing areas could exacerbate crop disease and insect infestation issues.

The wheat complex was mixed. Wheat is oversold, but support is limited by Russia’s control of the export market, even as the war with Ukraine continues. That includes another round of damage by Russia to Ukraine’s export and storage infrastructure. Russia’s wheat prices may have moved higher, but remain the cheapest on the global market, especially after the recent drop in the ruble against the dollar. Dry weather is an emerging issue in parts of Argentina and Australia, and a continued concern in portions of the Canadian Prairies. The trade is monitoring the spring wheat harvest pace and the tail end of the winter wheat harvest.

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