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Wheat, corn rebound as soybeans sell off

Soybeans were lower on commercial and technical selling. Soybeans and meal dropped on overbought signals and good weekend rainfall in parts of Argentina. Argentina is the world’s largest exporter of soybean products and their government has recent increased soybean sales with a “soy dollar” program. The rainfall is expected to be a bigger benefit to Argentina’s soybeans than its corn. Soybean oil was able to close higher, supported by an oversold bounce and strength in crude oil, helping it shrug off bearishness in global vegetable oils. That included a big drop in Malaysian palm oil futures. Beans are also monitoring conditions in Brazil with planting nearly complete and some of the extremely early planted beans close to harvest, while widespread harvest activity will wait until late January. The USDA’s next round of supply and demand estimates is out January 12th. U.S. soybean export inspections were below a week ago, above a year ago, and primarily to China and Japan. China’s National Statistics Bureau says soybean production was 20.3 million tons, up nearly 24% on the year with an almost 22% increase in planted area as Beijing encouraged producers to plant more beans.

Corn was higher on fund and technical buying. Weekend rain should help stabilize conditions in Argentina, but longer-term outlooks have a return to drier weather. That might influence some producers to switch from corn to soybeans. Conditions in most of Brazil remain comparatively favorable, but the big test for Brazil is their second crop. The second crop is the largest of the three and the source of most of Brazil’s exports, planted after soybeans are harvested. U.S. corn exports remain slow and demand for ethanol use has slowed down, limiting gains. U.S. export inspections were down on the week and the year, mainly to Mexico and China. China’s National Bureau of Statistics says 2022 domestic corn production was 277.2 million tons, 1.7% above a year ago with higher yields just canceling out lower planted area.

The wheat complex was higher on fund and technical buying. Ukraine’s key port of Odesa is reportedly operational after weekend drone strikes by Russia, but it remains to be seen how operational. Ukraine’s government says two of the other ports available for use under the Black Sea export agreement are operating at less than full capacity. Ukraine’s exports have slowed down after the extension of the agreement due to continued Russian aggression and longer vessel inspection times. Most forecasts have good near-term precipitation in most of the southern Plains. Still, the longer-term forecasts for the region do generally show a net drying pattern into the crop emerging from dormancy next spring. U.S. export inspections were short of 220,000 tons, under the previous week and last year, with Japan and Mexico topping the list. China’s National Bureau of Statistics says domestic wheat production tis year was 137.72 million tons, 0.6% more than a year ago. France’s AgriMer says 97% of winter wheat is in good to excellent condition.

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