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Wheat rebounds, corn mostly firm

Soybeans were lower on speculative and technical selling. Forecasts have more rain in dry parts of Brazil into mid-month, boosting production potential for later planted beans. Early harvest activity is underway in some areas of Brazil, with yields mostly lower than a year ago following the early planting issues. Conditions in Argentina are generally favorable after last year’s drought impacted crop. The Buenos Aires Grain Exchange says 86% of Argentina’s soybean crop is planted with just 2% called poor. Beans and other commodities are waiting to see what policies Argentina’s new president will be able to enact with some pushback from the public and no advantage in the national legislature. Soybean meal was down on follow through selling, while bean oil was pressured by profit taking. Shipping issues continue to be a general issue for commodities, including low levels on the Panama Canal restricting movement and attacks in the Red Sea.

Corn was mixed, mostly steady to modestly higher, on spread trade and short covering, along with some help from the bounce in wheat. Corn is watching weather in South America ahead of updated projections next week from USDA and CONAB. The Buenos Aires Grain Exchange says 78% of Argentina’s corn crop is planted. Export demand has picked up with U.S. corn prices the best value into spring. The USDA’s weekly sales numbers are out Friday. The U.S. Energy Information Administration says ethanol production last week averaged 1.049 million barrels a day, down 58,000 from the previous week, which was a more than two-year high, but up 205,000 from a year ago. The domestic supply was the largest since mid-April at 23.579 million barrels, an increase of 62,000 on the week, but a decrease of 865,000 on the year.

The wheat complex was higher on short covering and technical buying, in addition to the lower trade in the U.S. dollar during the session. Lower trade in the U.S. dollar against other currencies makes U.S. wheat, at least theoretically, more attractive on the export market. Winter wheat conditions in the southern Plains have improved with more precipitation on the way for parts of the region. Still, some areas remain in need of more soil moisture ahead of the crop emerging from dormancy. There are minimal chances of winterkill stateside, at least according to current forecasts, but there is the potential for some damage in Russia and Ukraine from an arctic blast with limited snow cover. The big bearish factor for U.S. wheat remains slow export demand, which will continue to limit any significant upside. Planting in France continues to be complicated by excessive rainfall. India’s food ministry is projecting 2023/24 wheat production at a record 114 million tons, with winter crop planting ongoing.

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