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Grains, oilseeds bounce back on commercial buying, weather concerns

 

Soybeans were modestly higher on commercial and technical buying, bouncing back after early weak trade. Forecasts have more dry weather in most of Argentina, but dry conditions in Brazil will help with harvest activity. Safras e Mercado has Brazil’s crop at 117.3 million tons, compared to last week’s guess by the USDA of 113 million. AgRural reports 48% of Brazil’s bean harvest is complete, compared to 56% a year ago and the five year average of 46%. Uncertainties about potential trade retaliation from China are in the background. Soybean meal was mostly lower on spread adjustments and bean oil was up, buying back part of Friday’s losses. The USDA’s attaché in Egypt projects 2018/19 soybean imports at 2.8 million tons, up 400,000 from 2017/18, with increased crush capacity. The USDA says the U.S. supplied Egypt with 1.1 million tons of beans in 2017. Egypt’s bean meal use is expected to increase 6.9% in 2018/19, with a 2.6% rise in bean oil consumption.

Corn was fractionally higher on commercial and technical buying, along with spillover from the bounces in beans and wheat. Contracts stayed close to the recent highs, while watching South America and U.S. pre-planting weather. The USDA’s prospective planting numbers are out at the end of the month. According to AgRural, 28% of Brazil’s first corn crop is harvested, compared to 36% last year and 37% on average, while 81% of the second crop has been planted, compared to 88% a year ago and the typical pace of 815. Unknown destinations and Japan bought 254,800 tons and 107,752 tons, respectively, of 2017/18 U.S. corn. Export inspections continue to trail last year by a wide margin. Ethanol futures were firm. The USDA’s attaché in Egypt projects 2018/19 corn imports at 9.5 million tons, up 1% from the 2017/18 estimate.

The wheat complex was modestly higher on commercial and technical buying, also bouncing back from early modestly lower activity. Large parts of the southern and western U.S. Plains remain very dry, while parts of the eastern Midwest have adequate to surplus soil moisture, as winter wheat prepares to emerge from dormancy. Minneapolis is watching weather ahead of spring wheat planting. Iraq is tendering for 50,000 tons of wheat from the U.S., Canada, and/or Australia, and Algeria is in the market for an unspecified amount of optional origin milling wheat. With about a quarter left in the marketing year, export inspections have picked up steam, but remain nominally bearish. The USDA’s attaché in Egypt estimates 2018/19 wheat imports at 12.5 million tons, with domestic production at 8.45 million tons, up 4.3% from 2017/18. Chicago March grain and oilseed contracts expire later this week.

 

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