Ag Market View for Dec 23.22
The soybean complex closed higher across the board. Jan-23 soybeans closed at $12.79 up $.11 ¼ for the day and down $.01 for the week. Prices remain in a $14.60 – $14.95 range. Jan-23 soybean meal closed at $455.30 up $3.30 for the day but down $7.70 for the week. Jan-23 soybean oil closed at 65.93 up .13 for the day and up 2.57 for the week. Spot board crush margins improved $.12 this week to $2.48 bu. Soybean oil product value jumped 1% to 42%. The USDA announced the sale of 124k tons (4.5 mil. bu.) of soybeans to an unknown buyer. Argentine soybean plantings advanced 10% last week to 61% complete, still well behind the historical average of 79%. Ratings slipped to 12% G/E, down from 19% last week. Parana, the 2nd largest producing state in Brazil is expected to harvest 21.4 mt of soybeans this year, up from YA drought reduced crop of 12.3 mt. Much needed rains of .50” – 1.00” are expected across Central Argentina the next few days. A dry but a cooler pattern to develop the last week of the year. Week 2 of the outlook offers better prospects for rains across Central Argentina the first week of 2023. The Week 2 forecast and beyond will be the principal factor driving prices next week. The markets do not reopen until 8:30 CST on Tuesday Dec. 27th. A much more favorable weather pattern with frequent showers and no threatening heat for Brazil, including the South, thru the first full week of the New Year. I suspect Brazilian production estimates will start trending higher. Argentine crop estimates will hinge on weather conditions in early January.
Prices jumped to a new 3 week high today with Mch-23 corn high of $6.67 ¾ stopping just shy of its 50 and 100 day MA’s that converge near $6.69. Mch-23 closed at $6.66 ¼ up $.05 ¾ for the day and up $.13 ¼ for the week. The USDA announced the sale of 150k tons (6 mil. bu.) of corn to Mexico. Parana is expected to harvest 15.4 mt of corn this year, up from 13.3 YA. Corn plantings in Argentina climbed 9% last week to 52% well below the historical average of 68%. Crop ratings slipped to 15% G/E, down from 17% LW. Cattle of feed as of Dec 1st was 97% of YA, in line with expectations. Placements at 98% were just above expectations of 96%. Marketing’s were 101% also in line with expectations.
Prices closed higher in all 3 classes. Mch-23 Chicago wheat closed at $7.76 up $13 ¾ for the day and up $.12 ½ for the week. Mch-23 KC closed at $8.74 ¾ up $.08 ¾ on the day and up $.35 for the week. Mch-23 MGEX closed at $9.31 ¾ up $.09 ½ for the day and up $.22 ¼ for the week. Argentine harvest advanced 24% to 78% complete. The BAGE kept their production forecast at 12.4 mt. With the winter wheat crop in dormancy and updated crop ratings months away, the impact from this week cold snap will not be known for weeks. A big warm up is in store for late next week for the entire continental US as both the 6-10 and 8-14 forecast show much above normal temperatures along with above normal precipitation.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.