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Soybeans, corn, wheat see more support from drop in the dollar
Soybeans were sharply higher on commercial and technical buying, pulling nearby months back above $12 and closing out the week with good gains. The trade continues to monitor South America, with spillover direction from the strength in crude oil and the weakness in the dollar. There was also support from expectations for improved export demand from China. Even with the ongoing tariff tensions and differing alliances in the Middle East potentially creating some wedges, President Trump and President Xi are still expected to meet later this month or early next month. Soybean meal futures were sharply higher on the lower dollar and higher move in soybeans, and while bean oil saw another round of crude oil and biodiesel demand related gains, those gains were capped by overbought signals.
Corn was higher on fund and technical buying, moving to multi-month highs and ensuring week-to-week gains. Corn was watching weather in South America, also getting some help from crude oil and the dollar. Weather impact in South America is a question mark. Large portions of Argentina have been dry during key development stages, while soybean harvest delays have pushed second crop planting in parts of Brazil past the ideal window, with dry weather also a factor in some areas. Stateside, there are concerns about drought in parts of the Corn Belt prior to spring planting. Demand continues to be solid overall, but there’s a lot of corn available, with the USDA’s next round of supply and demand numbers out on the 10th, while CONAB’s updated outlook for Brazil is set for the 13th.
The wheat complex was sharply higher on commercial and technical buying, along with the decline in the dollar, cementing a strong weekly finish. Large parts of the U.S. winter wheat region should see some near-term rain, but it could miss some dry areas in the western Plains. 56% of U.S. winter wheat growing areas are in some stage of drought, up 6% on the week. The trade is also watching conditions ahead of emergence in Europe and the Black Sea region, and the impacts on shipping and movement caused by Russia’s war on Ukraine and the military action in Iran. The trade’s anticipating minimal adjustments in the upcoming supply and demand report and even if there is a surprise, it might be glossed over quickly because of geopolitical issues.
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