Written Commentary
SOYBEANS
Soybeans ended higher. Market is trying to overcome an oversold tech picture. US domestic cash soybean and soymeal basis firmed this week as shorts try to add coverage. Cash crush margins are still positive. Weekly US soybean export sales dropped 6 mil bu. Total commit is near 2,200 vs 2,374 ly. USDA goal is 2,170 vs 2,261 ly. Dalian soybean, soymeal, soyoil and palmoil futures were Higher on profit taking. Soybean futures had dropped from a high near 16.06 to a recent low near 13.21 and are now near 200 DMA at 14.14. BOU dropped from 80 cents to 56 cents and are now near 61 cents with 200 DMA near 64. SMU dropped from 453 and 3 times tested a low near 390 and is now near 412. SMU is now trading over 50 and 100 DMA. America weather model suggest warm and dry US Midwest over next 10 days. EU model is not as warm with some rain late next weekend. Next week USDA will update US and World supply and demand. Trade could see US 2021/22 soybean carryout near 208 vs USDA 205 and 2022/23 211 vs USDA 280.
CORN
Corn futures ended higher. CU went from 7.78 to a low near 5.82 and is now near 6.33
and back above the 200 DMA near 6.29. Bulls have control of today’s energy and grain
markets. Word that China has bought more US PNW corn helped rally futures. Weekly
US corn exports sales dropped 2 mil bu. Total commit is near 2,376 vs 2,744 ly. USDA
Goal is 2,450 mil bu vs 2,753 ly. Latest census corn exports to date are 120 mil bu higher Than season to date export inspections. EU corn prices are higher. EU weather has turned Dry and next 2 week forecast is also dry. There was talk that their crop could drop to62 mmt from 72 mmt and USDA est of 68. There is also talk that 20 mmt of Ukraine Crop may also not be exported. For the last 30 days US Midwest weather has been perceived to be mostly normal. Parts of MN, OH, IN and KY have missed the rains. This week parts of C IL received a good rain. Next 2 week forecast is warm and dry. Today’s mid- day GFS was a little crazier with a strong ridge over IA and MO. Previous models had the ridge further west. Trade is looking for the USDA to est US 2021/22 corn carryout near 1,488 mil bu vs 1,438 previous and 2022/23 near 1,442 vs 1,400. This assumes a US crop near 14,520 mil bu and a yield of 177. Ly crop was 15,115.
WHEAT
Bulls had control of today’s energy and grain markets. Word that China has bought more US PNW Wheat and Canada and Australia wheat helped futures. Word that EU dry weather could lower their wheat crop may be helping wheat. Paris wheat futures were higher on dry EU weather. Argentina weather is also dry. Argentina est 40 pct of wheat soils are dry and rate the crop 21 pct G/E vs 56 ly. Weekly US wheat export sales were 10 mil bu. Total commit is 222 vs 245 ly. USDA goal is 775 vs 805 ly. US SRW wheat is cheapest in World with HRW a discount to Russia. Ukraine war continues which adds to concern about Ukraine wheat exports. Ukraine farmers are offered $2.10 for new crop wheat. Why would they plant a 2023 crop? Russia wheat exports also in question with thin vessel line up and inability to price forward contracts. Trade est US 2022/23 wheat carryout at 638 vs USDA 627. Interesting est is World wheat end stocks. Trade est stocks at 266 mmt vs 266 last month but range is 240-272. WU dropped for 12.85 to 7.85 and is now near 8.91 with 200 DMA near 9.03.
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