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-Good rains remain in South American forecast
-Argentine exchange sharply cuts corn/soybean crop estimates
-Modest rise in Malaysian palm oil production could cool prices
-Export Sales uninspiring
-Reduction in ethanol blending target being considered

 Good rains remain in the forecast for Argentina and southern Brazil, with several systems expected over the coming 15 day period.
 The Rosario Grains Exchange sharply lowered their estimate of the Argentine corn crop to 48 MMT from 56 MMT previously, pushing their estimate well below USDA’s 54.0 MMT and below their estimate of last year’s crop of 52 MMT (USDA 50.5 MMT). The exchange also lowered their estimate of the soybean crop to 40 MMT from 45 MMT previously and compares to USDA at 46.5 MMT and last year’s 46.2 MMT (USDA).
 China’s recently-released updated 5-year plan shows the goal of increasing soybean production to 23 MMT by the end of 2025 from this year’s 16.4 MMT. Corn production goals are a bit more modest, aiming for 277.5 MMT by 2025 vs this year’s 272.6 MMT, with wheat production holding steady or even declining a bit to 140 MMT by 2025 vs this year’s 144.1 MMT.
 A newswire article published yesterday during the session indicated the Biden administration is considering lowering the 2022 ethanol blending mandate from the 15.0 billion gallon target proposed just several weeks ago amid pressure from the oil industry.
 Argentina’s ag ministry estimates the country’s farmers have sold 37.3 MMT of last year’s soybean crop (87%) vs year ago sales at this time of 38.0 MMT (78% of the crop). So far, 4.9 MMT of this year’s expected 44 MMT crop has been sold.
 Iraq is believed to have bought 150k tonnes of Australian wheat in their latest tender, with the U.S. missing out on any/all business.
 The Malaysian Palm Oil Board sees the country’s palm oil production in 2022 rising modestly to 19.0 MMT from this year’s 18.12 MMT, with end 2022 palm oil stocks rising to 1.95 MMT vs this year’s 1.58 MMT. Malaysian palm oil exports in 2022 are expected to rise to 17.0 MMT from this year’s 15.56 MMT. With the expected improvement in production, the MPOB sees the 2022 average crude palm oil price at 3800 ringgit/tonne (~$910) vs the 2021 average of 4407 ringgit/tonne (~$1056). Benchmark March palm oil futures closed last night at 5161 ringgit/tonne (~$1236).
 The Malaysia Palm Oil Council expects India’s total veg oil imports in 2022 to decline to 13.8 MMT from this year’s 14.1 MMT as a result of an expected 600k tonne increase in domestic veg oil production next year. Specifically, the MPOC sees 2022 Indian palm oil imports at 8.1 MMT vs this year’s 8.5 MMT, soybean oil at 3.2 MMT vs this year’s 3.1 MMT and sunoil imports at 1.9 MMT vs this year’s 1.8 MMT.
 Malaysia’s largest palm oil plantation by size, Sime Darby Plantation, expects the country’s labor shortages to worsen in early 2022 relative to conditions over the last six months, with the industry facing a shortage of 75k workers. This could detrimentally impact palm oil production in early 2022 by 20-30%. While efforts are being made to increase the return of foreign workers due to COVID-related reductions, the process is proving quite slow.
 Strategie Grains maintained their early views on 2022/23 EU grain production with the soft wheat crop seen at 127.7 MMT, down slightly from this year’s 129.8 MMT, with new crop corn production estimated to be 66.4 MMT vs this year’s 68.4 MMT. New crop EU soft wheat exports are expected to decline slightly from this year’s 31.2 MMT due to anticipated increased competition from Russia and North America.
 Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/46331 for details on today’s USDA Export Sales report.
 U.S. corn sales were 458k tonnes (18.0 million bushels), below market expectations of 500k-1.5 MMT and rebounded only modestly from the previous week’s very poor sales of just 10.0 million bushels.
 U.S. soybean sales last week of 736k tonnes (27.0 mil bu) were within market expectations of 400k-1.2 MMT, the best in three weeks after the modest holiday week sales of 14.1 mil and 16.9 mil bushels, but were below year ago same-week sales of 33.4 mil bu. New net sales to China were only 39k tonnes.
 U.S. wheat sales of 265k tonnes (9.7 mil bu) were within market expectations of 150-400k tonnes, up from the previous week’s marketing year low sales of just 1.8 mil bu and were comparable to last year’s same-week sales of 8.1 million.
 U.S. soybean meal sales were 104k tonnes, at the lower end of market expectations of 10-350k tonnes and, while better than sales the previous two weeks of only 32k and 70k tonnes, were still below the roughly 157k tonnes/week average “needed” pace. Soybean oil saw net cancellations of 2.9k tonnes last week.

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