Wheat sees oversold bounce

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Wheat sees oversold bounce

Soybeans was mixed, mostly modestly higher. 74% of U.S. beans are rated good to excellent, up 1% on the week, with the USDA’s production update out Wednesday, along with the new supply and demand projections. China bought another 132,000 tons of new crop U.S. beans, the fifth business day in a row with a new sale, bringing the running total to 1,605,000 tons, all new crop, mainly to China. That demand comes despite the rise in political tensions between China and the U.S. CONAB says Brazil produced a record 120.9 million tons of beans in 2020, up 5.1% from last year. Soybean meal was lower on a lack of follow through after a higher start to the day and bean oil was lower on technical weakness.

Corn was mixed, mostly modestly higher. 71% of corn is in good to excellent shape, very good for this time of year, but that was before the probable damage from this week’s storm. The full extent of the damage to corn, and beans, in those states won’t be known for a while. That includes damage to around 10 million acres in Iowa, about 40% of the state’s total planted area in 2020. The damage also included grain storage buildings. CONAB says Brazil’s about 98.5% of Brazil’s second corn crop is harvested, with the combined crop pegged at a record 102.1 million tons. Ethanol futures were higher. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are also out Wednesday.

The wheat complex was modestly higher on short covering and technical buying, along with weakness in the U.S. dollar index. Contracts bounced off the recent lows, watching U.S. winter and spring wheat harvest activity. Both are slower than normal and the USDA’s spring wheat condition rating was down 4% on the week, falling to 69% good to excellent, steady with a year ago. DTN says Egypt bought 120,000 tons of wheat from Russia and that Syria is tendering for 200,000 tons of soft wheat. The World Food Programme says it is sending 50,000 tons of wheat flour to Beirut, after Lebanon’s only grain silo was destroyed by an explosion last week. CONAB expects a 14.1% increase in wheat planted area in Brazil, projecting production at 6.8 million tons.

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