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Wheat futures turn attention to weather concerns

Soybeans started the day with a lot of momentum and ended the day mixed as they ran into resistance later in the day.  On a positive note, crush margins remain very profitable and there is still plenty of incentive that could move contracts higher.  Soybean exports are also strong, still running ahead of year-ago levels.  While the U.S. is talking about potential blizzard conditions across much of the country, weather in much of Brazil remains ideal for crop development with rain in the forecast.  Southern Brazil and Argentina are still desperate for better weather. 

Corn futures pushed higher on Wednesday.  The move is somewhat surprising considering the export sale pace is nearly 50% behind last year’s levels and ethanol margins are shrinking.  Ethanol production was down again according to the Energy Information Administration, but stocks remained about 17% above year-ago levels.  There is a glimmer of hope for exports as DTN reports corn is getting a boost from rising Brazilian corn basis and U.S. corn out of the gulf competitive on the global market.  Dry weather in southern Brazil and Argentina is also a supportive factor.

The wheat complex finally turned its attention to the threat of winterkill from the pending winter storm that is projected to move across the U.S.  Sub-zero temperatures are in the forecast for Kansas and the lack of snow cover increases the chance of winterkill.  That pushed all three U.S. markets higher.  Paris milling wheat was sharply higher.  And the market continues to monitor the ongoing turmoil in the Black Sea Region. 

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