Soy, corn see more weather pressure

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Soy, corn see more weather pressure

Soybeans were much lower in speculative and technical selling. Some of the drier parts of the Midwest and Plains have seen rain this week, with more on the way for parts of the region. This should help yields after what was generally warm and dry in late July and the first half of August in some central and western growing areas. The trade is also monitoring economic concerns in China, which would at least have an impact on soybean demand. Mexico bought 228,606 tonnes of US 2022/23 soybeans on Tuesday morning. Soybean meal and oil fell on trade sales. Bean oil was further pressured by another drop in crude oil, also linked to uncertainties about Chinese demand. There are reports of a “high probability” of a La Nina event by early 2023, which would lead to a drier weather pattern in some key growing areas in South America, limiting production and potentially opening the door to more business export from USA.

Corn was lower on speculative and technical selling. Rain earlier in the week in parts of the Midwest and Plains is expected to help stabilize crops. The change in weather this week is likely too late to really boost yields in parts of the region, but it will likely help improve the USDA rating from good to excellent next week and could limit future declines in future yield forecasts. The USDA’s first yield estimate of the season is released on September 12th. Export demand continues to be sluggish and ethanol margins have tightened. The US Energy Information Administration’s weekly figures for ethanol production and inventories are released on Wednesday. Trading is tracking the end of Brazil’s second corn crop and demand for the crop. China is rumored to begin buying some of the second crop earlier than expected due to high domestic prices and a lack of available supplies from Ukraine. Ukraine’s government says the nation will be able to export 3 million tons of grain in September, and that could rise to 4 million tons a month if the deal with Russia is maintained.

The wheat complex was lower in fund and technical selling. The spring wheat crop is much slower than average, but the USDA’s good-to-excellent rating was steady last week, while the winter wheat crop is nearly complete. Recent rain in the southern US plains is helping to recharge soil moisture before the next round of winter wheat planting. Global supplies are tighter, even as export demand is sluggish for U.S. wheat. The dollar index fell for most of Tuesday’s regular session for grains and oilseeds, but continues to hold much closer to year highs than lows. A stronger dollar makes American goods more expensive in the export market. The anticipated increase in US wheat demand after Russia’s invasion of Ukraine and the loss of India’s crop did not materialize. Ukraine exports grain, but very little of it is wheat, and there are early expectations for a huge drop in winter grain plantings without increased support from Kyiv and an improved pace of sales. There is some rain in the short-term forecast for dry areas of the European Union. SovEcon has Russia’s wheat crop at a record 94.7 million tonnes, up 3.8 million from the last estimate. Soy, corn see more weather pressure

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