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    Business

    Grain Markets and Other Stuff

    Joe Vaclavik and Mackenzie Johnston discuss the grain markets, the business of farming, news related to agriculture, and a variety of other topics.

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    Copyright: © 2023 Grain Markets and Other Stuff

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    Latest Episodes:
    Soybean Demand: STRONG Crush and TERRIBLE Exports Dec 16, 2025
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    🌱 NOPA Soybean Crush
    NOPA released its November crush report on Monday
    US soybean crush hit an all-time November record
    Crush was lower than October’s record, but well above last year
    End-of-month soybean oil stocks jumped sharply, reaching a 7-month high
    Oil stocks also came in above trade expectations
    📉 Soybean Futures Pressure
    Soybean futures extended losses on Monday
    The Jan26 contract settled near $10.72
    Market pressure continues from:
    Slow Chinese buying
    Expectations of a massive Brazilian crop hitting export channels
    A near-record speculative long position that leaves the market vulnerable to liquidation
    🚢 Export Inspections Update
    US soybean inspections disappointed last week
    Shipments were well below last year’s pace
    About one-quarter of soybeans were headed to China
    Corn and wheat inspections were near the high end of expectations
    Northern Plains soybean basis remains weak due to limited PNW movement
    🧪 Fertilizer Market News
    The US lifted sanctions on Belarusian potash over the weekend
    US fertilizer stocks fell sharply on Monday in response
    Belarus still faces logistical hurdles, limiting near-term impact
    Belarus accounts for only a small share of US potash supply
    Trump’s threat of tariffs on Canadian fertilizer remains the much bigger market risk


    📦 USDA Flash Sales
    USDA reported additional flash sales on Monday
    Soybeans sold to China for next marketing year delivery
    Corn sold to unknown destinations
    📑 Export Sales Report (Catch-Up Edition)
    USDA released another outdated export sales report
    Soybean sales were strong, led almost entirely by China
    Corn sales slipped from the prior week
    Wheat sales landed near the low end of expectations


    Fund Traders LOVED Soybeans.... a Month Ago Dec 15, 2025
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    🌱 Soybean, Corn & Wheat Markets
    Soybean futures plunged on Friday, with the Jan ’26 contract falling nearly 17 cents to around $10.77 — the lowest level since late October. The pressure came from slowing U.S. export demand as the seasonal export window closes and growing expectations for a massive Brazilian crop. Brazilian soybeans are expected to hit the export market by mid- to late January and will likely be priced at a discount to U.S. supplies, adding further downside risk. Corn and wheat futures also finished the day lower.
    📊 CFTC Commitment of Traders (COT)
    The CFTC released another outdated, catch-up COT report. As of November 18, large money managers were net buyers across the grain complex. Funds were heavily long soybeans, sitting just shy of an all-time record. Notably, this was the exact time the soybean market peaked. Private estimates during the government shutdown significantly underestimated fund length, making this information largely useless from a grain marketing standpoint in real time.
    🚢 USDA Flash Sales & China Watch
    USDA reported multiple flash sales on Friday, including soybeans sold to China, soybean meal sold to Mexico, and corn sold to unknown destinations. Officially, China has purchased just over 3 million metric tons of U.S. soybeans for the current marketing year. However, trade chatter suggests actual purchases could be much larger due to sales listed as “unknown” and potential non-reportable purchases during the shutdown. Some analysts estimate total Chinese buying could be materially higher.
    🏗️ Hedge Funds Move Into Physical Commodities
    Hedge funds and trading firms are increasingly investing directly in physical commodities like pipelines, storage, power generation, and energy infrastructure. The goal is to gain better data, market insight, and diversification during volatile years. While this can create new profit opportunities, it also puts hedge funds in direct competition with major global trading houses.
    ⛽ 2026 Biofuel Quotas Delayed
    The EPA is expected to delay finalizing 2026 biofuel quotas until next year. The agency is still reviewing public comments and plans additional stakeholder meetings. The decision could become part of a broader negotiation between oil and agricultural interests. While higher biofuel mandates could help farmers, expectations remain muted, with year-round E15 already largely conceded. A mandated E15 requirement would be the only real surprise.


    Farmers Need Lower Input Costs, But Trump Wants to Tariff Fertilizer AGAIN Dec 12, 2025
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    🌱 Fertilizer Markets
    Fertilizer stocks surged Thursday after Ukrainian drones struck two fertilizer plants in western Russia.
    While the facilities represent a small share of global capacity, the market is now pricing in higher geopolitical risk and potential supply chain disruptions.
    Earlier this week, President Trump threatened “very severe tariffs” on Canadian fertilizer if needed to boost US production.
    Canada is the largest supplier of potash to the US, making this a key risk point for US growers.
    For many US corn farmers, fertilizer is the 3rd largest expense behind land and machinery.
    Nitrogen (N): ~65–75% of total fertilizer costs
    Potash (K): ~10–20% of total fertilizer costs
    Last month, the Trump administration lifted tariffs on most fertilizer imports, including urea, ammonium nitrate, UAN, ammonium sulfate, TSP, DAP, and MAP.
    🌎 Export Flash Sales
    Soybeans:
    264,000 mt to China (25/26)
    266,000 mt to unknown destinations (25/26)
    Corn:
    186,000 mt to unknown destinations (25/26)
    📦 Weekly Export Sales (Catch-Up Report)
    Corn: Strong sales at 2.4 mmt, well above expectations
    Mexico was the top buyer
    Soybeans: Near the low end of expectations but improved week-over-week
    Germany was the largest buyer
    Small China cancellation
    Wheat: Sales beat expectations sharply
    Unknown destinations led buying
    🇧🇷 South America Update
    Conab trimmed Brazil’s soybean crop forecast to 177.1 mmt
    Still a record crop if realized
    The cut reflects dry November weather and some replanting
    About 90% planted as of early December
    First exportable supplies expected early January
    Total exports estimated at 112 mmt
    🌦️ US Drought Monitor
    Corn Belt saw cold temps, with most moisture falling as snow
    Drought mostly unchanged, but worsened in parts of MO and IN
    High Plains dryness ticked higher in SE Kansas and NE Oklahoma
    Areas Experiencing Drought:
    🌽 Corn: 31%
    🌱 Soybeans: 31%
    🌾 Winter Wheat: 34%
    🌾 Spring Wheat: 16%
    🐄 Cattle: 25%


    Fed Cuts Rates Again, Could Inflation Cause the Next Grain Bull Market?? Dec 11, 2025
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    🏦 Fed Cuts Rates for the Third Straight Meeting
    The Federal Reserve lowered interest rates another quarter point on Wednesday, bringing the fed funds rate down to 3.5%–3.75%, the lowest since September 2022. Three FOMC members dissented — the most pushback since 2019 — signaling deep concern about the path forward.
    Fed Chair Jerome Powell said the goal is to steady the labor market while keeping inflation moving toward the 2% target. The Fed’s new projections show just one cut in 2026 and another in 2027, far fewer than markets expected.
    Some economists warn that stagflation is becoming a real risk — inflation that stays too high while job growth weakens.
    👉 Prices keep rising while the economy slows, family budgets get squeezed, and fixing one problem risks worsening the other.
    🌱 Soybeans Rebound on Flash Sales
    Soybean futures stabilized after multi-week lows. Jan26 beans +4¢, settling near $10.91 after USDA announced a 5 mil bu sale to China and 12 mil bu to unknown destinations. Gains were limited by ongoing confusion regarding China’s schedule for buying the agreed 12mmt of U.S. soybeans.
    Corn and wheat moved lower:
    • Mar26 corn −4¢ → ~$4.44
    • Mar Chicago wheat −5¢ → ~$5.30
    🚢 Fresh Flash Sales Reported Wednesday
    USDA confirmed new export activity for 2025/26 delivery:
    • 136,000mt soybeans → China (~5 mil bu)
    • 331,000mt soybeans → Unknown (~12 mil bu)
    • 120,000mt soybean cake & meal → Poland
    🌾 Trump Administration Rolls Out $700M Regenerative Ag Pilot
    The White House announced a $700 million program under “Make America Healthy Again” to expand practices like cover crops, no-till, conservation planning, and whole-farm soil & water management.
    Farmers will apply through EQIP or CSP, with an emphasis on soil health, water quality, and habitat.
    📝 Payment rates have not yet been released.
    ⚓ Ukraine Hits Russia’s Shadow Fleet Again
    Ukraine used Sea Baby drones to attack a large Suezmax tanker tied to Russia’s oil trade. The empty vessel (1 million-barrel capacity) suffered major damage.
    As these attacks continue:
    • Freight costs are expected to rise
    • Crews are increasingly wary of Black Sea movements
    • Putin warned he may retaliate against vessels controlled by Ukraine’s allies
    • He also suggested Russia could cut off Ukraine’s access to the Black Sea entirely
    ⛽ US Ethanol Production Slips
    Weekly ethanol output fell to 1.11 million bpd (−1.9% vs. last week, +3% vs. last year).
    Stocks declined to 22.51 million barrels, slightly lower week-over-week and −2.1% versus last year.
    Margins have weakened: Reuters estimates break-even to +30¢ across the Corn Belt based on spot corn, DDGs, inputs, and product values.


    Clueless and LYING!! China Soybean "Commitments" and the White House Dec 10, 2025
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    🇨🇳 Soybean Purchase Deadline Confusion
    Questions remain over China’s commitment to buy 12mmt of US soybeans. On Tuesday, US Trade Representative Jamieson Greer said the deadline isn’t year-end but “end of the growing season.” Nobody seems to agree on what that actually means. The White House fact sheet indicated the end of 2025, while Greer insists there’s a discrepancy in the published deadline vs. the real one.
    So far this marketing year, China has purchased only 3mmt of US soybeans. The CNBC article we’re referencing is… interesting. Greer, Bessent, and former USDA chief economist Joe Glauber all seem to have different interpretations of the deadline.
    📊 USDA Report—Soybeans Weak, Corn Strong
    Tuesday’s WASDE didn’t bring many surprises.
    • Soybean exports unchanged at 1.64B bu—a 13-year low
    • Ending stocks unchanged at 290M bu
    • Exports currently running ~40% below last year → further cuts likely
    Corn was the bright spot:
    • Record 3.2B bu corn export forecast
    • Ending stocks trimmed to 2.03B bu, lower than trade expected
    🚜 Deere Responds on High Machinery Costs
    After President Trump’s call for lower tractor prices, John Deere says it is helping farmers cut costs—not by lowering sticker prices, but through automation that reduces labor and chemical use.
    Equipment inflation has been driven by:
    • Post-COVID manufacturing inflation
    • Tech advancements
    • Steel & aluminum tariffs

    🐄 USDA Cuts 2026 Fat Cattle Price Forecast
    • New forecast: $235/cwt—down 4.5% from November
    • Still 5% above the 2025 projection
    USDA cited reduced packing capacity as the driver.
    Tyson is closing its Lexington, NE, beef plant and cutting the second shift at Amarillo.
    US beef imports for 2026 are now forecast at a record 5.45M lbs, supported by tariff relief on major suppliers like Brazil.
    🇦🇷 Argentina Slashes Grain Export Taxes
    Permanent tax cuts are coming soon:
    • Soybeans 24% → 22%
    • Soymeal/soyoil 24.5% → 22.5%
    • Corn 9.5% → 8.5%
    • Wheat 9.5% → 7.5%
    Milei’s government frames this as a step toward fully eliminating export tariffs.
    🥈 Silver Breaks Record High
    Spot silver rallied ~4% Tuesday to $60.50/oz 📈
    Drivers include:
    • Expected Fed rate cuts today
    • Newly added to US critical minerals list → tariff & supply concerns
    • Weaker dollar + geopolitical safe-haven flows
    Silver is now up ~110% YTD, beating gold and platinum.
    📑 CFTC Data Catch-Up Accelerated
    Commitments of Traders Reports will be current by the end of December, not late January.
    Expect fast-tracked report releases over the next several weeks.


    Trump Confirms $12bil Farm Aid Package: What Do We Know?? Dec 09, 2025
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    🚜 Farm Aid & Tractor Prices
    President Trump announced a $12 billion farm aid package on Monday and urged ag equipment makers to lower tractor prices — blaming environmental regulations for higher costs. The administration plans to lift some of those rules to reduce equipment expenses.

    • $11B → one-time payments to row-crop farmers under the Farmer Bridge Assistance (FBA) program
    • $1B → specialty crops
    • Eligibility: AGI below $900k for 2022–24 tax years
    • Acreage reporting due by Dec 19 — 5pm ET
    • Payments expected by Feb 28, 2026
    FBA looks much more like ECAP than the old MFP. Rates aren’t out yet.
    Covered crops: Barley, Chickpeas, Corn, Cotton, Lentils, Oats, Peanuts, Peas, Rice, Sorghum, Soybeans, Wheat, Canola, Crambe, Flax, Mustard, Rapeseed, Safflower, Sesame & Sunflower.
    📊 USDA Crop Production Report—Today 11:00am CST
    Traders expect minimal changes to US ending stocks:
    • Corn & wheat → slight declines
    • Soybeans → modest increase
    Global: slightly more beans & wheat, slightly fewer corn stocks.
    🇧🇷 Brazil Crop Outlook
    AgRural projects:
    • Corn: 135.3mmt (↓ from 141.1mmt record last year)
    • Soybeans: 178.5mmt (unchanged)
    Dry southern weather remains a risk to yields.
    The US crop is ~3.2× bigger than Brazil’s upcoming corn crop—but Brazil will export ~33% of production vs the US at 18–19%. 📦
    🇨🇳 Flash Sale to China
    Another soybean flash sale Monday:
    • 132,000mt (5 mil bu) → China for 25/26 delivery
    Since late October, China has now booked 2.85mmt (105 mil bu) via flash sales.
    🚢 Export Inspections
    Week ending Dec 4:
    • Soybeans: 1mmt—+9% vs wk prior but -41% vs last year
    • Corn: 1.5 mmt—above expectations, +36% vs last year
    • Wheat: 393kmt—+59% vs last year
    China finally showed up—119,895 mt of beans were inspected at the Gulf.
    PNW still quiet: only one cargo to Taiwan from WA/OR.
    📝 Export Sales (still catch-up reports)
    Week ending Nov 6:
    • Beans: 510,600 mt—down 59% w/w (China lead buyer)
    • Corn: 979,500 mt—down 51% w/w (Japan lead buyer)
    • Wheat: 462,500 mt—up 8% w/w (Japan lead buyer)


    Trump to Announce $12 Billion Farmer Aid Package TODAY Dec 08, 2025
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    The Trump administration is expected to announce a $12 billion aid package for farmers today. The announcement will take place around 2 this afternoon in Washington, DC. About $11 billion will go to crop farmers through the new Farmer Bridge Assistance program, with the rest going toward other commodities. The funds have been authorized under the Commodity Credit Corporation Charter Act and will be administered by the FSA.

    🎯 China Soybean Purchases Back in Gear!
    China resumed buying US soybeans late last week. US exporters reported 462,000mt (17M bushels) sold to China for 25/26 delivery. Since late October, China’s total buys sit at 2.7mmt (~100M bu)… still a long way from the 12mmt commitment. 📉

    🤝 US–China Trade Call
    US Treasury Secretary Scott Bessent, USTR Jamieson Greer, and China’s Vice Premier He Lifeng held a “productive” video call Friday. The big talking point: the new trade truce and soybean commitments.
    🗓️ The wrinkle:
    The White House originally said 12mmt by Dec 31, but last week Bessent suggested deliveries would instead occur by the end of February—raising fresh questions about the terms of this “commitment.”
    📊 Fund Activity: Catch-Up CFTC Data
    The CFTC released another delayed Commitment of Traders report:
    Funds bought 76k corn contracts 🌽
    Funds bought 83k soybean contracts 🌱
    → Net long 120k = biggest since April 2018
    Funds bought 34k SRW wheat contracts 🌾
    The big soybean buying lines up with the late-October trade truce.
    CFTC says data will be fully current by late January.
    🇧🇷 Brazil Soybean Update
    Planting is nearly wrapped up:
    91% planted vs 95% last year
    Mostly complete in Mato Grosso and other top states
    New crop estimates vary widely:
    Patria: 171.9mmt
    Conab: 177.6mmt
    USDA: 175mmt
    🌧️ Next 10 days: Most of Brazil sees rainfall—especially the dry south
    🇺🇸 Early USDA Acreage Outlook
    USDA’s first look at 26/27:
    Corn: 95M acres (↓ 3.7%)
    Soybeans: 85M acres (↑ 4.8%)
    Wheat: 44M acres (↓ 2.9%)
    These numbers reflect expectations from USDA’s Nov. 14 WASDE.


    Corn Demand is STRONG - Why Can't the Market Rally?! Dec 05, 2025
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    🌽 Grain Export Demand Still 🔥
    USDA reported multiple flash corn sales on Thursday:
    • 100,800mt to Colombia
    • 392,500mt to Mexico
    ➡️ Both for 2025/26 MY
    Corn demand remains fantastic — 🚢 exports + ⚗️ ethanol running near record pace — yet futures just can’t seem to catch a bid.
    📦 “Catch-Up” Export Sales Report
    Week ending Oct 30:
    • Corn: 2mmt — down 📉 11% WoW (Mexico biggest buyer)
    • Soybeans: 1.2mmt — down 📉 14% WoW (Unknown biggest buyer; China finally showed with 232kmt)
    • Wheat: 505kmt — down slightly (Mexico biggest buyer)
    🐖 China’s Pork Prices Keep Sinking
    • Pork values now the lowest since 2022
    • Prices -18% YTD, expected to fall further
    • Weak consumer spending + slow economy
    • China’s sow herd only -2.1% YoY so far
    ➡️ If cuts deepen → less feed demand → soybean implications
    ⛽ API Flips Again on E15
    American Petroleum Institute now supports year-round E15 🤯
    ✔ Joined biofuel groups urging legislation
    ✔ Also pushing for limits on EPA refinery exemptions
    🔊 Pete Meyer:
    “Positive step but not mandatory. Stations need blender pumps + storage — not feasible in big cities.”
    🌾 Canada’s Record Wheat Crop
    StatsCan final crop report:
    • ~40mmt wheat, 🔺11.2% YoY — new all-time record
    • Beats 38.5mmt estimates
    • Spring wheat the driver: 29.3mmt (+10.3% YoY)
    ➡️ More pressure on a wheat market already struggling — especially spring wheat vs winter wheat

    🌦 Drought Monitor Update
    Corn Belt: mostly steady
    ✔ Improvements: N. Illinois & SE Wisconsin
    ❌ Slight worsening: Michigan
    High Plains: little change
    ✔ Only modest improvement in NE Kansas


    US Areas in Drought:
    • Corn — 30%
    • Soybeans — 30%
    • Winter Wheat — 35%
    • Spring Wheat — 16%
    • Cattle — 25%


    Scott Bessent Thinks You're Dumb, LIES About China Soybean "Deal" Dec 04, 2025
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    🚜 China Soybeans: Goalposts Moving?
    China is expected to fulfill its US soybean purchase agreement… eventually. On Wednesday, Treasury Secretary Scott Bessent said China will meet its commitment to buy 12mmt of US soybeans. The White House originally said by year-end, but Bessent now expects by the end of February. To date, China has purchased just 2.2mmt (~19%) of the required volume. 🤨
    The White House "Fact" Sheet stated—verbatim—that China will buy at least 12mmt during the last two months of 2025… plus 25mmt annually through 2028. Now the timeline has magically shifted. Sure sounds like some goalpost-dragging.
    📦 Chinese shipments of US soybeans are set to ramp up in the coming weeks:
    At least 6 vessels scheduled to load from the Gulf
    1 vessel already en route—the first since May
    Still well behind typical purchase pace
    Low Chinese demand = pressure on soybean prices
    US sorghum shipments to China have also resumed for the first time since March.
    🌽 Iowa Eyeing More Corn in 2026
    Iowa State University’s Dennis Johnson says farmers in north-central Iowa are leaning toward more corn acres next year. Corn has been the consistent moneymaker—despite some southern rust this year—and early 2026 budgets still favor corn over beans.
    He advised not to go overboard on fungicides next season… Just scout the crop.
    ⛽️ Ethanol Production = New Record
    US output hit 1.13mil bpd last week—an all-time high.
    Stocks rose to 22.51mil barrels.
    But… ethanol margins have softened:
    Roughly –$0.05 to +$0.25/gal depending on the plant
    ⚓ Black Sea Insurance Costs Explode
    Ukrainian attacks on Russian-affiliated vessels have caused insurance rates to triple for ships calling at Russian ports. Escalating risks raise concerns about retaliation:
    ➡️ Potential Russian strikes on Ukrainian port infrastructure
    ➡️ Ongoing pressure on global grain trade dynamics
    📉 US Jobs Market Cooldown Continues
    ADP reports 32,000 private-sector job losses in November vs. +47,000 in October. Hiring has slowed sharply under tariff fallout + tighter immigration.
    Monthly job growth:
    62k (Jul–Sep 2025) vs 186k (same period 2024) 😬
    Markets see an 87% chance of a quarter-point Fed rate cut on Dec. 10.


    Putin Threatens Black Sea - Corn & Wheat Bounce + China Soybean Update Dec 03, 2025
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    🇷🇺 Black Sea Threats Push Grain Higher
    Tensions escalated again this week after Russia warned it may retaliate for a recent surge in Ukrainian attacks on its tanker fleet. Vladimir Putin said Moscow could strike vessels belonging to countries that support Ukraine and even cut off Ukraine’s access to the Black Sea if attacks continue. Several Russian-affiliated tankers have already been targeted over the last week — a notable escalation from prior sporadic incidents.
    Corn and wheat futures responded quickly: Mar26 corn +5¢ to $4.50, and March Chicago wheat +6¢ to $5.41. Russia and Ukraine together are expected to account for 27% of global wheat exports and 13.5% of global corn exports this year. 🌎
    🌱 China Soybean Commitment: Can They Still Do It?
    Some traders still believe China can meet its 12mmt US soybean purchase pledge, but they’ve got a long way to go. State-owned importers — especially Cofco — are expected to ramp up buying in the next few weeks, including shipments destined for state reserves.
    The problem? US beans are still priced at a premium versus South America, leaving little commercial incentive. To date, China has purchased only 2.25mmt — just 18.8% of its commitment. To hit the target, they’d need to buy more than 2mmt per week for the rest of the year.
    There are 20 business days left in 2025, meaning China must average 487,450mt per business day to reach the White House goal. Most analysts view recent buying as short-term political optics, not a durable shift toward US supplies.
    🚢 More US Soybeans Heading to China
    Reuters reports at least six bulk vessels will load soybeans at Gulf Coast terminals in the next two weeks. Based on USDA flash data, China has “officially” purchased 2.2mmt so far this marketing year—but the true number could be higher due to USDA reporting delays.
    These shipments likely reflect previously reported sales. China taking a small batch of US soybeans is not new information and not bullish.
    💵 Bridge Payment Coming Next Week
    Ag Secretary Brooke Rollins confirmed Tuesday that a farm “bridge payment” will be announced next week. The program is designed to provide short-term relief while longer-term trade and assistance plans are finalized.
    President Trump’s “One Big Beautiful Bill” expanded farm support, but many groups argue more is needed heading into next season. Even before the bridge payment, the US is on track to spend $40+ billion on farm payments this year—the second-highest total since 1933. 🌾
    📈 Farmer Sentiment Surges
    US farmer sentiment jumped sharply in November. Purdue/CME’s Ag Economy Barometer rose to 139, the highest since June, with much of the increase driven by stronger future expectations. The Future Expectations Index climbed 15 points to 144.
    This was the first survey after the newly negotiated US–China trade truce, likely boosting optimism.


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