Ag Market View for Dec 12.22
Soybean futures ended lower. Better than expected overnight Central Argentina rains helped trigger long liquidation. Final end, at least for today, of the liquidation of long soyoil and short soymeal spread may be suggesting a bottom in soyoil futures and top is soymeal. Argentina weather suggest net drying over the next 10 days. Showers are in the forecast after Day 10. Last week there was talk that Argentina soybean crop could drop as low as 42 mmt vs USDA 49.5. There was also talk that Final Brazil crop could reach 161.0 mmt vs USDA 152.0 and 127.0 last year. Weekly US soybean exports were near 67 mil bu vs 64 last year. Season to date exports are near 858 mil bu vs 937 last year. Some feel Some feel tight US supplies could help SK to 15.00.
Corn futures ended higher. Matif corn closed slightly higher in low volume. Cash trade has gone to almost zero with many EU co-ops closing their books for the year on Thursday. Ukraine’s updated port shipments suggest USDA revised annual projection of 17.5 mmt still looks too low. We still see the potential supply at 20-24 mmt, but Putin continues to say one thing but do another. Some feel the damage to Odesa, notably power knock-outs and the surrounding region is much greater than what the newswires are reporting. Vessels continue to turn off their AIS at will as accusations of stolen grain persist. Transit/inspection at the Bosphorus remains an unknown but corn continues to move. Russia’s corn harvest still has around 25% left in the fields. Weekly US corn exports were 19 mil bu vs 36 last year. Season to date exports are 281 mil bu vs 407 last year. Brazil and Ukraine export prices are below US for much of the remainder of 2022. Some still look for final US corn exports to be down 100-150 mil bu. Brazil weather is mostly favorable for crops. C Argentina saw better weekend rains. It will now be warmer and dry over the next 10 days. Extended weather models do show rains after day 10. Slowing US and EU economy may be slowing car driving and drop in gas and ethanol use.
Wheat futures ended higher. Matif wheat futures got a boost from the US bounce. French/EU cash premiums remain very strong amidst an ongoing lack of farmer selling and an expected big January shipping program. Russia continues to sell big volumes (Algeria, Egypt, Pakistan), but shipments took a hit in the first week of December due to the weather. Transparency with regard to the corridor becomes increasingly limited. Istanbul inspection teams have now stopped documenting vessels leaving time from the load port, making it impossible to accurately estimate total voyage times and thus freight rates. Weekly US wheat exports were only 8 mil bu. Season to date exports are 409 vs 419 ly.
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