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Corn down with soybeans, wheat mixed ahead of WASDE report

Soybeans were mixed, adjusting spreads. Harvest activity in Brazil is slower than average but should pick up steam in the coming weeks. There have been no firm reports of quality impact from harvest delaying rain and it looks like Brazil remains on pace for a record large crop, impacting global demand for U.S. beans. CONAB’s updated outlook for Brazil is scheduled for Thursday. There’s been talk but no confirmation of China buying soybeans from Brazil and the U.S. this week. Diplomatic tensions with China remain a big, bearish background issue. There’s some rain in the forecast for parts of Argentina this weekend ahead of a hotter and drier pattern. Soybean meal was lower and bean oil was higher on the adjustment of product spreads. Bean oil had additional support from strength in palm and crude oils.

Corn was modestly lower on fund and technical selling. The second crop corn planting in Brazil is slower than normal because of the soybean harvest delays, while Argentina’s crop is shrinking because of hot, dry weather. New USDA supply and demand numbers are out Wednesday, along with the weekly U.S. Energy Information Administration ethanol production and supply numbers. The Renewable Fuels Association says December ethanol exports were a 17-month low at 74.2 million tons, most of that to Canada, the 21st month in a row taking the top slot. DDGS exports of 887,433 tons were a three-month high, primarily to Mexico and South Korea. 2022 ethanol exports were the fourth largest on record, while annual DDGS exports were up 4% from 2021.

The wheat complex was mixed. Conditions continue to look much better for soft red winter wheat than hard red winter. Most medium-term forecasts have an improved chance of precipitation in some of the drier parts of the southern U.S. Plains, but drought conditions in the region could extend into the crop emerging from dormancy. That, coupled with potential winterkill in some areas, is expected to reduce yield prospects and could lead to increased rates of abandonment. SRW growing portions of the eastern Midwest are expected to see better near-term precipitation prospects. Domestic demand is solid and U.S. and global supplies have gotten tighter. The trade will be watching the global numbers for wheat closely in Wednesday’s WASDE report. The trade continues to watch Russia’s war on Ukraine and the impacts on production and exports, with just over a month remaining in the Black Sea Grain Initiative.

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