Written Commentary
SOYBEANS
The soybean complex closed mixed with soybeans and soybean meal lower, while soybean oil was slightly higher. Mch-23 soybeans closed at $14.90 ¼, down $.16 ¼, roughly $.10 off the morning lows. Mch-23 held key chart support at the 50 day MA, currently $14.76. The next key support is the 100 day MA at $14.50. Soybean meal closed $2 – $4 lower, well off the morning lows. Soybean oil turned high as end users found good value with prices below $.62. Soybean crush margins rebounded $.13 today to $2.08, after falling sharply the past few weeks. The combined long position by Money Manager’s in the soybean complex as reported by the CFTC has swelled to over 373,000 contracts, the largest in 9 months. MM’s are sitting on a record long in the soybean meal. The USDA announced the sale of 192k tons (7 mil. bu.) of soybeans to an unknown buyer. This morning’s export inspections at 66 mil. bu. were above expectations while last week’s figures were revised up by just over 4 mil. bu. YTD inspections are down 3% from YA, vs. the USDA forecast of down 8%. AgRural lowered their Brazilian bean production forecast by .7 mmt to 152.9 mmt, in line with the USDA 153 mmt. They also report harvest at nearly 2% as of last Thur., down from the 5% pace from YA. No Demand news from China this week as they are off for their Lunar New Year celebration. Dr Michael Cordonnier lowered his Argentine soybean production est. another 2 mmt to 39 mmt, (USDA – 45.5 mmt) and his Paraquay est. by 1 mmt to 9 mmt. (USDA – 9 mmt) He kept his Brazilian forecast unchanged to 151 mmt.
CORN
Prices closed $.08 – $.10 lower, however well off session lows. Weekend rains of .75” – 1.50” were common across drought stricken areas of Argentina, with some areas picking up 3+”. Dry areas in Southern Brazil, RGDS, also benefited from weekend rains. The next round of rain for Argentina is expected Wed thru the upcoming weekend, followed by 2 more rain events stretched out into the early days of Feb. Markets will continue to assess the recent rains impact on crop potential as the early planted crops have no doubt suffered irreversible yield loss. The BAGE crop conditions, usually out on Thursday, will take on added significance. Mch-23 held key chart support at its 50 day MA of $6.62. If violated, next support is at $6.50. Money Managers were healthy buyers of corn last week having added just over 42,500 contracts to their long position, at 192,137 contracts as of last Tuesday. Export inspections at 29 mil. bu. were in line with expectations, however well below the pace needed to reach the USDA export forecast. YTD inspections at 453 mil. bu. are down 30% from YA, vs. the USDA forecast of down 22%. AgRural also lowered their Brazilian corn production by .4 mmt to 123.9 mmt, just below the USDA’s 125 mmt forecast. COF at 97% of YA levels were in line with expectations. Dr. Michael Cordonnier lowered his Argentine corn production estimate by 1 mmt to 44 mmt, vs. USDA at 52 mmt.
WHEAT
All 3 classes of wheat were sharply lower today. Chicago was down $.20 – $.22, KC down $.27 – $.29, while MGEX was down $.20 – $.25. Mch-23 Chicago reached its lowest level since Sept-21. Next key support is $7.02 ½. Next key support for Mch-23 KC is at $8.03. Mch-23 MGEX has slipped to its lowest level since Aug-22. Weekend snowfall across Western Kansas were better than expected providing roughly .50” – 1.00” of rainfall equivalent. Export inspections at 12 mil. bu. were at the low end of expectations. YTD inspections at 469 mil. bu. are down 4% from YA, in line with the USDA forecast. SovEcon is reporting Russian wheat is trading at $306/mt FOB, up slightly from last week. They also estimate Russia exported 800k mt last week, ups form 670k the previous week. In total Jan-23 exports expected to reach 3.7 mmt, well above the 2.7 mmt in Jan-22.
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