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Weather issues, dollar prop up wheat

Soybeans were modestly higher on speculative and technical buying. 8% of U.S. beans are planted, ahead of average, with delays in some areas this week. The trade is also monitoring harvest delays due to heavy rain in parts of Argentina, stretching into portions of southern Brazil. That heavy rain is also leading to quality concerns for South American soybeans. The USDA’s next round of supply, demand, and production estimates are out May 10th, with CONAB’s updated outlook for Brazil on May 14th. Soybean meal and oil were up on that higher move in beans and the fundamental implications of some crop loss or lower quality in Argentina, the world’s leading exporter of soybean products.

Corn was mostly modestly higher. 12% of corn is planted, a little faster than normal, and while there will be near-term delays, the rain will boost soil moisture. Argentina is seeing corn harvest delays, while parts of central Brazil are too dry for ideal second crop development. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. Solid ethanol and export demand are somewhat offsetting the bearish supply situation. Notably, Chinese demand for U.S. corn has slowed down due to increased trade with Brazil and Ukraine, but that’s canceled out at least a little by the consistent demand from some other major customers, especially Mexico.

The wheat complex was higher on speculative and technical buying, along with lower trade in the U.S. dollar during the session. 50% of winter wheat is good to excellent, down 5% on the week, with soft red generally in better shape than hard red. Still, some of the SRW crop could be impacted by excessive soil moisture, in contrast to the dry conditions affecting large portions of the HRW crop. Nearly a quarter of winter wheat is seeing a form of drought, but there is relief in the forecast for some areas of the U.S. Plains over the next couple of weeks. Globally, dry weather is an issue in parts of Australia, Canada, Russia, and Ukraine, while excessively wet weather to very dry weather is having an impact on some of western Europe’s top producers. Export demand for U.S. wheat remains slow as Russia and Ukraine continue to hold a price advantage.

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