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Grains, oilseeds gain Friday, still lose on week

Soybeans were modestly higher on short covering and technical buying, but with November posting a more than $.20 week to week loss. Contracts were oversold and there are concerns about dry weather in parts of the Midwest, especially Illinois, Indiana, Iowa, and Missouri. Gains were limited by the probability of new U.S. tariffs on China and anticipated retaliation by Beijing. President Trump has proposed a 10% tariff on another $300 billion of Chinese goods. This probably negates any interest from Beijing for U.S. beans, even if they are currently cheaper than supplies from Brazil. Negotiations are still expected to resume in September. In the U.S., there are concerns about dry weather in some areas as the crop moves into or through the pollination phase. The latest guess from FC Stone has the U.S. crop at 3.743 billion bushels with an average yield of 47.2 bushels per acre. Soybean meal was lower and bean oil was higher on the adjustment of product spreads.

Corn was higher on short covering and technical buying, with the most active months still posting double digit losses. Corn also saw an end of the week a bounce while watching the weather. For a crop that’s had a rough season since pre-planting, the uncertainties about what exactly production will look like this year continue. The USDA’s next set of supply, demand, and production numbers is out Monday, August 12th. The reports will include at least some version of the USDA’s acreage resurvey and prevent plant numbers. FC Stone sees U.S. corn at 13.922 billion bushels with an average yield of 167.2 bushels per acre. The recent decline in price could help with exports, but there’s still a lot of competition from South America and Ukraine. Ethanol futures were higher. The Renewable Fuels Association says June ethanol exports were 128.4 million gallons, an increase of 29% from May, with Canada the top destination. The U.S. also imported 24 million gallons of undenatured fuel ethanol in June. DDG exports were 962,592 tons, down 6% from the previous month.

The wheat complex was higher on short covering and technical buying, with losses for September contracts ranging from $.02 in Minneapolis to more than a dime in Kansas City. Rain in the southern U.S. Plains has slowed down the winter wheat harvest and there are continued concerns about protein content and disease issues. Spring wheat development weather generally looks good, with updated crop progress and condition numbers out Monday afternoon. 2019/20 U.S. wheat exports remain ahead of the low bar set by 2018/19, but recent losses should help U.S. supplies be more competitive on the export market, but that depends on how other exporters are impacted by weather issues. Australia, Canada, parts of Europe, and portions of Ukraine are all currently experiencing dry weather.

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