Soybeans, corn, wheat extend gains

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Soybeans, corn, wheat extend gains

Soybeans were sharply higher on commercial and technical buying. A return to hot, dry weather is in the forecast for most of the Midwest starting next week. Next week also marks the start of August, a critical month for most of the U.S. soybean crop. If the weather materializes as expected, it’d likely trim at least some yield off the USDA’s most recent projection, with an updated guess out August 12th. How many acres were actually planted this year is an uncertainty as well, with the results of a USDA resurvey also out next month in the supply and demand report. The USDA’s national condition rating was down 2% and, overall, development is slower than normal. Soybean meal was up sharply, with August hitting a contract high, on commercial demand linked to cash basis levels and crush margins, while bean oil followed the rest of the complex higher.

Corn was higher on commercial and technical buying. The USDA’s national rating fell 3% last week for corn and development is behind average in parts of the region. That decline in the condition rating was due to hot, dry conditions last week, which are expected to make a return to much of the Corn Belt next week, especially western areas. Export demand is slow, with more than 60% of Brazil’s second crop harvested. Brazil and China are reportedly discussing speeding up the timeline of a trade deal that would send Brazilian corn to China. Brazil’s second crop is the largest of the three and the source of most of their exports. The trade is also watching development conditions in Europe. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was sharply higher on commercial and technical buying. Ukraine says it will ship grain from the Black Sea region despite continued attacks by Russia. Ukraine and Russia did reach a deal last week to facilitate trade, but less than 24 hours after the agreement was signed, Russia shot missiles at a key Ukrainian port and has continued attacks on civilians this week. Still, any gain is going to be held in check by the relatively slow demand for U.S. wheat on the export market, due in part to relative strength in the dollar. Many analysts were anticipating at least some increase in demand due to Russia’s attack and a smaller than expected crop in India, but that has not materialized. The USDA’s spring wheat condition rating was down 3% on the week. A spring wheat crop tour is ongoing this week.