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Soybeans, corn, wheat mixed prior to WASDE report

Soybeans were mostly higher on spread trade and commercial buying. CONAB lowered its outlook for Brazil’s soybean crop slightly but still expects record production, with updated USDA numbers Friday at Noon Eastern/11 Central. That bigger crop in Brazil likely spells more export competition for the U.S. Weekly export sales were an improvement from the previous week while still falling short of the levels from a few weeks ago, with China and Mexico topping the list. Thursday morning, unknown destinations bought 718,000 tons of U.S. soybeans and China purchased 118,000 tons, both for 2022/23 delivery. That was the third day this week with an announced sale of U.S. beans for a running total of 1.47 million tons. That improvement in demand from China and unknown, who might turn out to be China when it’s time for delivery, followed Beijing’s relaxation of its zero-COVID policy. Soybean meal was mostly higher on spread trade and commercial buying, while bean oil was up modestly on an oversold bounce. Medium term weather outlooks for South America continue to favor Brazil over Argentina.

Corn was mixed on bull spreading. CONAB cut the combined corn crop guess for Brazil, but production should still be larger than last year, depending on weather. That really does hinge on Brazil’s second crop, the largest of the three and the source of most of their exports, which is planted after the soybean harvest. That leaves a decent, albeit narrow, window for U.S. corn exports. CONAB did raise its estimate for 2022/23 Brazilian corn exports. In Argentina, there’s some rain on the way in most near-term forecasts, but it might be too late to keep corn acres from falling further, with some producers switching to soybeans. Just 14% of Argentina’s corn crop is in good to excellent condition. The USDA could lower its U.S. export estimate in Friday’s report after not cutting the projection in November, but it might also wait for January because of the preliminary 2022 production total. Another potential adjustment is in corn for ethanol use. Corn export sales last week were short of 700,000 tons with the overall pace continuing to trail last marketing year. The top buyers were Mexico and China. Mexico says its open to extend its deadline for a GMO corn import ban to 2025 instead of 2024.

The wheat complex was mostly with Chicago and Kansas City down on profit taking and Minneapolis up on commercial buying. The USDA’s expected to raise U.S. ending stocks Friday while further tightening global supplies. Precipitation in the southern Plains could miss some of the drier areas. Most forecasts do have expanding drought in that region into next year, which would impact yields when the crop emerges from dormancy. Wheat exports were up on the week, but at the halfway point of the marketing year, the 2022/23 pace remains behind 2021/22. The biggest buyers were China and Iraq. The recent drop in price should help Chicago wheat be more competitive and the lower crop quality in Australia could benefit Kansas City and Minneapolis. Russia continues to hold the lion’s share of the current export market following a record crop because of the relative weakness of the ruble against the dollar. SovEcon raised its export outlook for Russia to 43.9 million tons, citing the recent pace of shipments. There’s some question about whether or not the USDA will adjust its export guess for Ukraine in this round of numbers or wait until next month, further out from the extension of the Black Sea export agreement.

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