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On the Grains
Grains are all weak in overnight trade with wheat leading losses in double-digits as of 6am. Yesterday’s nice gains in corn and beans were fueled in part by a big slowdown in sales by Brazilian farmers. The Lula administration has provisionally enacted a new tax plan aimed at raising $29 billion in new revenue that could raise farm taxes in Brazil by roughly 20%. Sources say that has many Brazilian farmers holding onto their grain instead of selling it into the world export market until they see if Lula’s tax proposals are approved by their Congress.
On the export front, yesterday’s weekly sales were near the high end of the expected range for corn and beyond the high end for new crop wheat. At the current pace, USDA’s corn export forecast could be raised. Soybean sales, on the other hand, came in near the low end of the expected range.

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