Written Commentary
SOYBEANS
Soybeans and soymeal ended lower. Soyoil, corn and wheat ended higher. Soybeans saw some profit taking after US weekly soybean export sales were a record high for this week in the market year. Some feel China was going to take 28 mmt from US in 2022/23. This is part of their total imports of 98 mmt. There is 26 mmt total commit to China with almost 6 mmt in unknown. Some feel this could suggest that China may be done buying from US unless South America 2023 crops drop from current estimates. Early China soybean crush in down 10 pct versus last year vs USDA est of 8 pct higher. China factory and retail sales dropped adding concern about slower economy and lower raw material import demand.
CORN
Corn futures ended higher. March corn continues its uptrend from 6.35 low. Strong US domestic cash basis and dry weather in Argentina offers support. Talk final US corn exports may be lower than USDA estimate offers resistance. US farmer remains a reluctant seller in what is left in 2022 marketing year. Some feel US farmer could add to old and new crop sales in the new calendar year. Weekly US corn export sales were 37 mil bu. Total commit is 787 mil bu vs 1,516 ly. USDA goal is 2,075 vs 2,471 ly. Mexico, Guatemala and unknown were best buyers. Japan commit is behind ly. Weekly US ethanol production dropped and stocks increase. Margins are negative. Some feel corn futures are overvalued given talk of lower World 2023 demand and potential for higher supply. For now most will watch Argentina weather and Black Sea exports.
WHEAT
Wheat futures ended higher. Algeria bought around 500kt for Feb and only Russian and Ukraine worked without discounting current replacement. The weather remains poor which has slowed the pace of shipments but the vessel line-up is huge. Following the US Ag Attaché’s revised Ukraine S&D’s, we have taken another look at the prospects for Ukraine wheat exports for the rest of the season with some unable to agree with the Attaché’s numbers. Rosario GE took the Argentine crop down to 11.5 mt with abandonment put at 900thousand ha from a total 5.9 mil ha planted (USDA 12.5 mmt). Wheat futures may also be adding weather premium due to colder than normal US temps next week. Weekly US wheat export sales were 17 mil bu. Total commit is near 518 vs 558 ly.
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