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Soybeans drop as corn finds some support

Soybeans were lower on commercial and technical selling. There is some rain in the forecast for dry parts of Brazil, but that might not last long. Even then, any improvement in Brazil will be welcome and the crop in Argentina has benefited from more rainfall. Unknown destinations bought 220,000 tons of 2023/24 U.S. beans ahead of the open and last week’s sales were not just a marketing year high, but one of the highest weekly totals in decades. Last week’s big buyer was China, followed by unknown destinations, which might turn out to be China when it’s time for delivery. This bump in demand for U.S. beans from China is likely tied to concerns about those planting conditions in Brazil. Soybean meal and oil were down on the general bearishness in the soy complex.

Corn was higher on short covering and technical buying. Corn is watching Brazil and that expected wetter pattern in some areas ahead of a probable return to dry weather. Still, that’s going to be a bigger deal for Brazil’s second crop, which is planted after soybeans are harvested. CONAB’s updated outlook for Brazil’s crops is set for December 7th. Export demand has improved a little, largely thanks to Mexico, and demand for ethanol use is solid, with producers encouraged by bullish margins. Corn sales last week were 1.8 million tons, mainly to Mexico and Japan.

The wheat complex was lower on fund and technical selling. Export sales were lower than average as Russia maintains its control of the global market. Sales last week were a measly 6.5 million bushels, primarily to unknown destinations and Algeria. Those sales to unknown may or may not turn out to be China when it’s time for delivery. There’s been a lot of talk about improved demand for U.S. wheat from China, but that has not materialized as Beijing looks for other, relatively less expensive, origins, leaving U.S. exports at their slowest pace in decades. The USDA’s next set of supply and demand estimates is out December 8th. U.S. winter wheat is in better condition than a year ago, but drought concerns persist in parts of the southwestern Plains.

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