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Grains lower on soft export sales

The grains turned lower in the overnight as the weekly export sales report revealed weaker than expected sales.

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In the overnight session the grains traded lower with corn down 2 1/4 cents, soybeans down 8 cents and wheat down 3 cents. The Dollar is trading a bit lower this morning with crude oil off over a dollar a barrel. On Thursday the Saudi Arabia’s state grains authority issued a large international tender to purchase 715,000 metric tons of hard wheat for delivery between June to August. A reportable sale of new crop soybeans was reported for 118,000 metric tons to unknown destinations this morning.

Export sales were disappointing across the grain complex this morning. Wheat sales were on the low end of expectations which only booked 162,100 metric tons compared to expectations between 100,000-300,000 metric tons. Corn sales fell 7 percent week over week booking 406,000 metric tons which was on the low side of expectations which ranged between 400,000-500,000 metric tons. Soybeans only booked 27,400 metric tons this week which was down 95 percent from last week and way below analyst expectations which ranged between 150,000-300,000 metric tons. Analysts have been expecting soybean export sales to start tapering off as the newly harvested South American crop becomes more competitively priced on the global market.

On Wednesday the EIA ethanol production data showed that output slid 1,000 barrels per day to 952,000 BPD. Ethanol production typically trends higher from February through May but we have not yet observed a notable increase in production during that time frame. Ethanol stocks also fell 770,000 barrels to 20.55 million barrels.

In South America the Bueno’s Aires Grain Exchange increased their Argentina soybean production estimate to 58.5 million metric tons from 57 million metric tons, citing higher than expected yields as the reason for the increase. Port workers were into the second day of strike on Wednesday with more protests being threatened next week.

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