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Soybeans, corn, wheat give back some gains

Soybeans were modestly lower on profit taking and technical selling. Contracts held above the recent lows, but the trade seems reluctant to break overhead resistance due to fundamental factors. South American weather generally looks favorable, with large crops expected in Argentina and Brazil, and export demand for U.S. wheat continues to be slow because of Brazil’s price advantage. Brazil’s harvest is right around the halfway point. The USDA’s updated supply and demand numbers are out on the 8th, with CONAB’s fresh outlook for Brazil set for the 12th. Soybean meal and oil were lower on the same factors as soybeans.

Corn was modestly lower on profit taking and technical selling. Corn is watching second crop planting and development in Brazil and conditions in Argentina. The trade also has an eye on U.S. conditions ahead of widespread planting. The USDA’s Prospective Planting numbers are out on the 28th, along with Quarterly Grain Stocks. Export demand is good and ethanol margins have tightened but remain in positive territory. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. China is reportedly buying corn from Ukraine, re-establishing what had been a solid relationship for trade in that crop before the war with Russia. There’s also been talk, but no confirmation, of China buying U.S. corn this week.

The wheat complex was lower on profit taking and technical selling, with Chicago notching new lows for the move. Global winter wheat conditions are mostly good with scattered rain in the forecast for the central and southern U.S. Plains later this week. Even with the recent issues, the hard red winter crop is in significantly better condition than this time last year. There’s also a good chance of rain in the northern U.S. Plains and Canada, recharging soil moisture ahead of spring wheat planting. The recent rally was bargain hunting by commercials, not a fundamental change. A drop in Paris milling wheat added to the U.S. woes. Prices for Ukraine and Russia have declined, but that’s more of a bearish factor for U.S. and European Union export demand than overall global price structure, at least over the near-term. Australia’s Bureau of Agricultural and Resource Economics sees that nation’s new wheat crop at 26 million tons, well below last year, but up 500,000 from the previous guess.

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