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Soybeans extend decline

Soybeans were sharply lower on speculative and technical selling. The trade is watching Tropical Storm Beryl move further inland, bringing heavy rainfall to parts of the southern and eastern Midwest. Near-term forecasts are generally drier for central and western growing areas. That adds up to mostly favorable development conditions in many key U.S. growing areas. Soybean meal and oil futures were lower on that good development weather and the fundamental implications of a large U.S. crop. The USDA’s next round of supply, demand, and production estimates is out Friday. China’s domestic soybean prices have hit two-month lows, a bearish demand signal. Brazil continues to control most of the global soybean market share.

Corn was mixed, with nearby contracts up and deferred months down. Corn is watching development weather, which looks generally favorable in most of the region. That Beryl precipitation is welcome, for the most part, and an extended drier pattern will help farmers in portions of the northwestern Corn Belt. In any event, the full extent of crop damage won’t be known for several months. Export demand continues to be solid and ethanol margins are supportive. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. The trade is also monitoring heavy rainfall in northern China, which could lead to corn imports. U.S. corn is currently at a price advantage to most competing origins. Just 36% of Brazil’s second crop has been sold, slower than last year’s pace. CONAB’s updated outlook for Brazil is out Thursday.

The wheat complex was mixed. Wheat consolidated after Monday’s drop, keeping an eye on world weather issues. Parts of Russia and Ukraine are very hot and dry, harvest delays due to rain are likely in parts of Europe, including France and Germany, and there’s a chance of frost in parts of Argentina. France’s Ag Ministry pegs 2024 soft wheat production at 29.7 million tons, compared to 35.1 million in 2023. Those Black Sea crop weather concerns have not stemmed the drop in Russia’s wheat prices, keeping them the best option for most global buyers. Stateside, Beryl should delay soft red winter harvest activity in some areas, while conditions are mostly favorable for hard red winter harvest activity. Spring wheat development conditions in the northern U.S. Plains and Canada are mixed, but the U.S. crop did see a week-to-week improvement in the USDA’s most recent round of weekly crop progress and condition numbers.

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