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Soybeans, corn, wheat start short week with a rally

Soybeans were higher on short covering and technical buying but ended the session closer to the day’s lows than the highs. Contracts saw an oversold bounce, soybean meal was up, and the dollar was down. South American weather looks neutral to bearish, with rain in the forecast this week for parts of Argentina and Brazil. That should help stabilize or even boost conditions for Argentina and later planted beans in Brazil. Brazil’s harvest is nearly a third complete, and while futures could be near the seasonal lows, Brazil’s prices continue to hold a significant discount to the U.S., keeping their export advantage in place. U.S. soybean export inspections were a three-week low, primarily to China and Mexico. Soybean meal was up on the tight near-term supplies of meal in Argentina, normally the world’s leading exporter of soybean products, and the sale of 228,000 tons of 2023/24 U.S. bean meal to the Philippines. Bean oil was lower on follow through selling and competition from global vegetable oils. Soybean processing margins remain in positive territory for most crushers.

Corn was modestly higher on short covering and technical buying. Corn bounced off the recent lows, watching development conditions in Argentina and Brazil. Safras e Mercado lowered their outlook Brazil’s combined corn crop to 129.2 million tons due to El Nino impact and a 6.2% year-to-year decline in planted area. U.S. corn export inspections were a three-week high, mainly to Mexico and Japan. The overall pace of U.S. corn inspections remains ahead of what’s needed weekly to meet USDA projections for the current marketing year. The halfway point of the 2023/24 marketing year for corn, and soybeans, is March 1st. Japan bought 155,000 tons of 2024/25 U.S. corn ahead of the open. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are pushed back to Thursday, with weekly export sales numbers now out Friday. Both of those have been bright spots for U.S. corn, but not enough to offset some of the domestic supply bearishness.

The wheat complex was higher on short covering and technical buying. Wheat found some new interest with help from the lower dollar and a higher move in Paris milling wheat ahead of the U.S. session. Slow export demand and a large global supply remain big bearish factors for wheat and will likely cap any sustained upside. Additionally, even with mostly lower in the dollar recently, it remains relatively high when compared to competing exporters. Russia continues to control the global market, with Ukraine also a major player due to price. U.S. wheat export inspections were a two-week low, with Japan and China topping the list. The final quarter of the 2023/24 marketing year starts March 1st. The USDA’s next round of supply and demand estimates is out March 8th. Ukraine’s Ag Ministry says the survival rate of the winter wheat crop was 98-99%, lower than normal thanks to a mild winter.

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