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Soybeans, corn see solid gains ahead of WASDE

Soybeans were higher on short covering and technical buying. Traders squared up positions ahead of Friday’s USDA supply and demand estimates. The USDA is expected to lower its crop guess for Brazil, the question is by how much. This set of numbers was crunched before the harvest hit the halfway mark, so unless the USDA tries to match last month’s deep cut by CONAB, it could be another conservative, and potentially controversial, reduction. CONAB’s updated outlook for Brazil is out March 12th. Argentina’s soybean crop estimate is expected to be slightly higher, while U.S. ending stocks will likely be above a month ago. U.S. soybean export sales were quite a bit larger than the previous week, but still disappointing in the grand scheme on things due to aggressive shipments out of Brazil. Brazil’s Ag Ministry says February soybean exports were 6.61 million tons, compared to just over 5 million a year ago. ANEC projects March at 12.81 million tons, compared to 14.44 million in March 2023. China’s General Administration of Customs says January/February soybean imports were the lowest in five years due to bearish crush margins and Lunar New Year celebrations. Last week’s big buyers were China and Germany, with a cancelation by unknown destinations. The trade is also keeping an eye on U.S. conditions ahead of spring planting. The USDA’s Prospective Planting report is out on the 28th, along with the quarterly grain stocks numbers. Soybean meal and oil were up, following the lead of beans.

Corn was higher on short covering and technical buying. Corn was also getting ready for the supply and demand projections and potential adjustments for Brazil. Generally, the trade sees a slight cut for total production, based on the then available first crop yield numbers and second crop planting conditions. Argentina’s crop estimate could be unchanged from February and there’s a wide range of estimates for U.S. corn ending stocks. At the halfway point for 2023/24, corn for ethanol use and export demand remain ahead of last marketing year. U.S. export sales were up slightly on the week, unchanged from the four-week average, primarily to Japan and Mexico. Corn is seeing increased competition on the export market from Ukraine, especially for business with China. Brazil’s Trade Ministry says February corn exports were 1.713 million tons, compared to 2.274 million the year before. ANEC sees March exports at 143,783 tons, compared to 780,053 in March 2023. The Renewable Fuels Association says January ethanol exports were 150 million gallons, a decline of 4% on the month, with Canada taking the top slot for the 34th month in a row, followed by India at a 3-year high. South Korea, Colombia, and Mexico rounded out the top five. January DDGS exports were 902,376 tons, down 9% from December, with Mexico the biggest destination for the sixth consecutive month.

The wheat complex was mixed, mostly higher. Contracts are oversold and due for a bounce after this latest round of lows, but Chicago closed mixed, with nearby months dragged down by spread trade, slow export demand, and the large global supply. Kansas City and Minneapolis were supported by short covering, technical buying, and the weakness in the dollar during the session. The trade is expecting minimal changes for U.S. and world wheat in the supply and demand numbers. Wheat is also watching rain totals in U.S. winter and spring wheat growing areas. China canceled on 130,000 tons of previously purchased 2023/24 U.S. soft red winter Thursday morning, adding to the nearby negativity in Chicago, while Egypt canceled their weekly wheat tender without specifying a reason. Russia and Ukraine largely remain in control of the global wheat market due to a price advantage. Weekly U.S. sales were below the previous week, with the Philippines and South Korea topping the list for 2023/24, which is now in its final quarter.

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