Written Commentary
SOYBEANS
With the exception of Mch-23 meal the soybean complex was higher across the board. Soybeans were up $.08 – $.16, soybean meal down $2 to up $3, while soybean oil is up 70 – 110. May-23 soybeans surged back above $15, closing right at its 50 day MA. Spot Mch-23 board crush margins remain stout at $2.32 bu., however cash margins are closer to $3 bu. There were no export sales announced today. Deliveries against Mch-23 soybeans oil surged to 500 contracts. Still no meal deliveries. Old crop soybean exports at only 13 mil. bu. were a new MY low and at the low end of expectations. YTD commitments are down 3% from YA, vs. the USDA forecast of down 8%. I look for the USDA to lower their export forecast by 20 mil. bu. in next Wednesday’s WASDE report. Soybean meal sales at 172k tons were in line with expectations. YTD commitments are down 7% from YA, vs. the USDA forecast of up 1%. Despite record production, Brazil’s soybean exports in Feb-23 reached only 5.2 mmt, down from 6.3 mmt in Feb-22, largely due to harvest delays. Look for exports to surge March thru July as history shows. Most private production estimates for Brazilian soybeans continue to come in near 151 – 153 mmt, vs. USDA at 153. The BAGE reported further deterioration with the Argentine crop. 2% of the crop is rated G/E, down from 3% LW. 67% of the crop is rated Poor/VP up from 60%. They went on to state their current production forecast of 33.5 mmt was too high, however didn’t provide specifics. The USDA’s current forecast is 41 mmt.
CORN
Prices closed mixed in a choppy volatile 2 sides trading session. Old crop futures were down $.02 – $.03, while new crop was up $.01. Lack of confirmation of fresh sales to China along with a weak export sales report allowed grain prices to pull back from the morning highs. Uncertainty surrounding an extension of the Black Sea Grain deal also provided support. The current deal expires Mch. 18th with no talks to extend the deal currently scheduled. Widely scattered rains impacted Northern Argentina overnight. Key growing areas in Central part of the country remain dry with no rains expected in the next week to 10 days. Argentine crop prospects continue to deteriorate. Export sales were disappointing at only 24 mil. bu. YTD commitments are down 39% vs. the USDA forecast of down only 22%. I expect the USDA to lower their export forecast at least 50 mil. bu. in next Wednesday’s WASDE report. Brazil’s corn exports in Feb-23 slipped to 2.3 mmt. While down from 5.5 mmt in Jan-23, it still represents a record high for the month. Brazil’s exports will then remain light until the 2nd crop harvest is available in July/Aug. Most private Brazilian corn production est. are coming in above the USDA forecast of 125 mmt. AgroConsults recent est. is 128.5 mmt (29.4 mmt – 1st crop, 99.1 mmt – 2nd crop). Datagro raised their 2nd crop est. to 102.9 mmt, up 8% from YA. StoneX raised their forecast to 130.6 mmt, with 101 mmt being the 2nd crop. Argentine corn ratings slipped again this week. The BAGE rated 6% of the crop in G/E condition, down from 9% LW. Poor/VP rose 5% to 56%. They didn’t offer an updated production forecast.
WHEAT
Prices closed higher across the board. Both KC and MGEX finished $.08 – $.12 higher, while Chicago was up $.01 – $.03. Export sales at 11 mil. bu. were in line with expectations. YTD commitments are down 6% from YA, vs. the USDA forecast of down 3%. Shipments are down only 2%. I do not look for the USDA to change their current export forecast of 775 mil. bu. Russia has indicated they would only agree to renewing the Black Sea Grain Initiative if their agricultural good and fertilizers have “unhindered access to global markets.” GrainCrop estimates Australia’s 2023/24 wheat production between 25 – 26 mmt, down from last year’s record crop of 38 mmt. Australia has produced record wheat crops 3 years in a row. Iran reportedly bought several hundred thousand tonnes of wheat from Russia. Precise volume and price details are not yet available. Ukraine has indicated they have no intention of limiting 2023/24 wheat exports. This however would require the extension of the BSG deal. With the exception of the Southern Plains US drought areas continue to shrink heading into spring plantings. US winter wheat areas in drought slipped to 54%, down from 57% LW, down from the peak of 75% in Nov-22 and the lowest since Sept-22. Spring wheat areas in drought slipped 5% to 59%, down from its peak of 79% in Nov-22.
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