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Soybeans, corn start short week modestly higher

Soybeans were modestly higher on short covering and technical buying. China bought 126,000 tons of 2019/20 U.S. beans Monday morning and there’s the continued optimism phase one of the trade agreement will be signed soon. President Trump and Premier Xi reportedly had a good conversation over the weekend and Treasury Secretary Steven Mnuchin says phase one will be signed in January. 220,500 tons of 2019/20 U.S. beans previously purchased by unknown destinations were switched to the Netherlands (154,500 tons) and Saudi Arabia (66,000 tons). Rain this week in South America could miss some of the drier areas of Argentina and Brazil. Weekly export inspections were bullish, with China the leading destination. Soybean meal was higher, following beans, and bean oil was mixed on spread adjustments.

Corn was modestly higher on short covering and technical buying. Commodity business should be light over the next couple of weeks, with many traders out for the holidays. Corn is also watching development conditions in Argentina and Brazil, along with the very tail end of this year’s U.S. harvest. The USDA’s 2019 production totals will be out next month, but those will likely change because of the widespread delays. Some of the crop might not even be harvested until next spring. Weekly export inspections on corn were bearish, mainly to Mexico and Japan, but sorghum was above what’s needed to meet USDA projections, mostly headed to China and Mexico. Ethanol futures were firm.

The wheat complex was mixed, with Chicago mostly lower, Kansas City down, and Minneapolis firm. Dry parts of the southern U.S. Plains are expected to receive precipitation this week. There are also some weather concerns in other parts of the world, but for the most part, concerns about wheat will be on the back burner until the crops in the northern hemisphere start to emerge from dormancy. The trade is also watching pre-planting conditions for spring wheat. Export inspections remain ahead of last year’s pace, but it was another bearish total for the weekly numbers. The weekly export sales report will be out Friday and new USDA supply, demand, and production numbers are out January 10th. Argentina’s Senate has passed a bill that would increase export tariffs on a number of commodities to raise revenue for the cash strapped government. Producers have reacted negatively and the higher duties are expected to limit planted area in 2020/21.

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