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Soybeans down on improved crop rating

Soybeans were sharply lower on fund and technical selling. 60% of U.S. beans are rated good to excellent, up 2% on the week and a larger than expected improvement. Still, that’s well below a year ago and beans need a trend-line yield to bolster supplies and meet demand expectations. Rain chances for next week have improved at least a little for parts of the region, including dry portions and some areas that are already doing very well. The carryout projection for new crop beans is already very tight and will only get tighter if production estimates move lower. The USDA’s next set of estimates is out in the monthly supply and demand report on the 12th. July’s soybean exports from Brazil were 8.67 million tons, compared to 9.96 million in July 2020. U.S. prices in some location are below Brazil’s prices, which could send some of China’s business to the U.S. Soybean meal was sharply lower and bean oil was down on the fundamental implications of a big soybean crop.

Corn was steady to lower on spread trade and spillover from beans. The corn condition rating was 2% lower with generally better conditions in the east than in central and western areas. Some rain is probable in both drier growing areas and the “garden spots” next week, which should aid development. Similar to beans, corn will need a trend-line yield or better to meet demand and boost supplies. The new marketing year for row crops starts September 1st. The trade is also watching harvest activity and yield results for the second crop in Brazil. As recently as just a few months ago, many were projecting record total production, but that was before planting delays, weather issues during the prime growing season, and frost/freeze events in the latter stages. CONAB’s next estimate of Brazilian corn production is out on the 10th. Ethanol futures were unchanged. The U.S. Energy Information Administration’s weekly ethanol production and supply numbers are out Wednesday. DTN says Taiwan bought 55,000 tons of feed corn from South Africa.

The wheat complex was mixed, with Kansas City mostly firm and Chicago and Minneapolis lower. The U.S. winter wheat harvest is close to wrapping up, with the USDA reporting activity in eight of the top 18 production states as officially over for the season. It’s probably too late for any rain in the North American spring wheat region to really help the crop all that much. The good to excellent rating for spring wheat did tick higher following rain last week in some areas but remains significantly below a year ago with the vast majority of the crop in poor to very poor shape. There are also continued condition concerns in parts of Russia, China, and Europe, and the trade is monitoring weather in Australia. DTN says Japan is tendering for 119,435 tons of food wheat from the U.S., Australia, and/or Canada, while Taiwan is in the market for 48,000 tons of U.S. milling wheat, adding Egypt bought 60,000 tons of wheat from Romania.

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