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Soybeans, corn see more pressure from Brazil rain

Soybeans were lower on fund and technical selling. Recent rain should help Brazil’s soybean crop, but some damage was done by dry weather earlier in the season. Early harvest activity is underway in some areas of Brazil with generally disappointing yields. CONAB and the USDA will release updated projections later this week. Safras e Mercado lowered its outlook for Brazil’s bean crop to 158.2 million tons. Soybean meal was lower, following beans. Soybean oil was mostly higher on bull spreading. Soybean export inspections were down on the week and the year with the pace behind what’s needed to meet USDA projections because of Brazil’s aggressive shipping schedule for most of 2023. Last week’s top destinations for U.S. beans were China and Mexico. Brazil’s export group ANEC projects January soybean exports at 1.3 million tons, compared to 940,000 a year ago.

Corn was lower on fund and technical selling. Corn is watching weather in South America, including the generally favorable conditions in most of Argentina. The big test for South America will be Brazil’s second crop. Planted area was already expected to be below a year ago and could be limited even further by the soybean planting delays earlier in the season and some producers switching to cotton, outright eliminating the normal double crop corn schedule. Demand for ethanol use has dipped as export demand has improved. U.S. export inspections were above the prior week and higher than a year ago, with the 2023/24 pace faster than 2022/23 thanks to a U.S. price advantage. The main destinations were Japan and Mexico. ANEC sees Brazil’s corn exports for January at 3.33 million tons, compared to 4.86 million for January 2023. Ukraine’s Ag Ministry says corn exports since their current marketing year got underway July 1st are 10.3 million tons, 22% behind last marketing year.

The wheat complex was lower on fund and technical selling. Needed precipitation is in the forecast for hard and soft red winter growing areas of the U.S. That’s recharging soil moisture in some critical growing areas and could boost yields when HRW and SRW emerge from dormancy. There’s the possibility of winterkill, later this week, but damage won’t be evident until spring. Winterkill is also a potential issue in parts of Russia and Ukraine. U.S. export inspections were above the week before and last year, while still trailing the previous marketing year due to the relatively high price of U.S. wheat limiting demand. The primary destinations were China and the Philippines. Ukraine’s Ag Ministry says that since the start of the marketing year July 1st, wheat exports are 7.8 million tons, around 9% slower than last marketing year. There’s talk, but no confirmation, of new demand from China for U.S. soft red winter wheat.

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