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Soybeans, corn, wheat down to start the year

Soybeans were sharply lower on speculative and technical selling. Weekend rains were better than expected in some of the drier parts of Brazil. That should help, but damage has been done to portions of the crop and early harvest activity is underway in some areas. CONAB’s updated outlook for Brazil is out this Thursday, the 4th, while the USDA’s updated supply, demand, and production numbers are set for Friday, January 12th at Noon Eastern/11 Central. The USDA says 200 million bushels of beans were crushed in the U.S. in November 2023, a decrease of 1 million from the all-time high set in October, but an increase of 10 million from November 2022. Soybean product production was also slightly below the prior month and above the year before. Soybean meal was down on the same factors that pressured beans, while soybean oil was mostly firm, with traders rolling out of January and into deferred months. Soybean export inspections were down on the week and the year, mainly to China and Italy. The aggressive shipping by Brazil earlier in the year continues to impact global demand for U.S. beans. Brazil’s recent decision to increase biodiesel blend levels starting in March could lead to better demand from the U.S.

Corn is lower on speculative and technical selling. Corn is watching weather in South America, with more rain on the way for parts of Brazil and good conditions in Argentina. The big test for South America is Brazil’s second crop, which is planted after soybeans are harvested. Losses were limited by good ethanol demand and improved export demand. The USDA says 454.987 million bushels of corn were used for ethanol production in November 2023, while DDGS production was 1,796,675 tons, both down 1% on the month and up 1% on the year. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Thursday. On the export side of the equation, corn was below both the prior week and last year, not entirely a surprise since that week did start with Christmas, while the overall 2023/24 pace remains ahead of 2022/23. The top destinations were Mexico and Japan.

The wheat complex was lower on fund and technical selling. Export demand is slow and the dollar has rallied after its recent decline, further limiting export potential. Since that spike in soft red winter sales to China, the export front has been very quiet, including physical shipments. Inspections last week were under the prior week, but above a year ago, primarily to the Philippines and China. Early in the back half of 2023/24, the pace remains behind 2022/23. Russian shipments have slowed down following their aggressive movement in much of last year. Movement out of Ukraine continues to be impacted by the ongoing war with Russia. Recent precipitation should benefit winter wheat in the southern U.S. Plains. Southwestern portions of the region could see more precipitation later this week and, over the next couple of weeks, there could be an improvement in the pattern for the soft red winter crop in the Midwest and southeastern U.S. The USDA’s monthly crop weather and condition compendium resumes this week ahead of the weekly report starting up again in April.

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