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Soybeans modestly lower for the week

Soybeans were modestly lower on fund and technical selling, pulling the most active contracts to modest weekly losses. The equity markets and crude oil posted another round of losses on coronavirus concerns and while China is accepting requests for one-year tariff waivers, Brazil’s beans remain cheaper, even without the waiver. Conditions generally look good in South America, with dry parts of Brazil expected to get rain in the coming week and Argentina also on track for a large crop. Some expectations are calling for another round of big soybean sales from Brazil during March, but the U.S. is expected to pick up some soybean product business because of higher export tariffs from Argentina. Argentina’s rural group CRA is scheduled to begin a four-day commercial strike Monday in protest of the tax hike. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was modestly lower on fund and technical selling, in addition to the broader market influence, but the most active months were up on the week. Japan and unknown destinations both bought 2019/20 U.S. corn Friday morning, but sales this marketing year are behind last marketing year by a wide margin about halfway through. U.S. corn exports have been hit hard by competition from Argentina, Brazil, and Ukraine. Japan picked up 234,688 tons and unknown destinations purchased 211,336 tons. Corn is also monitoring conditions in South America and U.S. weather ahead of widespread planting. Planting is underway in parts of the south, with the USDA’s prospective planting numbers out on the 31st, along with quarterly stocks. Ethanol futures were lower. The Renewable Fuels Association says ethanol exports during January were a 15-month high at 151.2 million gallons, primarily to Brazil, Canada, and India. DDGS sales were 976,688 tons, mainly to Mexico, South Korea, Indonesia, and Turkey. DTN says feed mills in South Korea and Taiwan reported each bought 65,000 tons of corn, likely South American origin.

The wheat complex was mixed, with Chicago modestly lower, Kansas City unchanged, and Minneapolis modestly higher, but all three exchanges were lower for the week. U.S. hard red winter conditions look good, hard red spring planting could start early, and the soft red winter region is expected to see drier near-term weather. The USDA’s weekly national crop progress reports resume in April. Fundamentally, Chicago is looking at a tight near-term supply, but other supplies are relatively ample and U.S. wheat is wary about pricing itself out of the export market. The world supply outlook is bearish, with new USDA supply and demand estimates out on Tuesday the 10th. Lower crop production in some countries, including export competitors, is expected to be canceled out by big crops in other nations.

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