Written Commentary
SOYBEANS
Soybean futures ended lower. USDA surprised the market with lower than expected estimate of the US 2022 soybean crop. Total US 2022/23 supply is down 138 mil bu from August. USDA dropped US exports 70 mil bu and crush 20 mil bu to get to a carryout of 200 mil bu. Question is, are futures high enough to ration the demand USDA dropped? Some feel US October soybean yield could be higher than Sep. USDA dropped US soybean crop rating 1 pct to 56 G/E. Weekly US export inspections were lower than expected. USDA export sales on Thursday key to estimating export demand. Argentina soybean, soymeal and soyoil export prices are below US. SX support is near 14.50. Most suggested US farmers increase cash sales on the USDA report rally. USDA estimates South America 2023 soybean crop near 210 mmt vs 174 this past year.
CORN
Corn futures traded lower. Some feel that after the USDA report CZ might settle in a 6.70-7.20 range into harvest. Cash basis remains strong as end users try to fill needs before harvest. Yesterday’s rally did trigger some farmer selling but not enough to satisfy demand. Some feel US corn yield could drop on USDA October 12 report versus September. Corn futures rallied to near 7.00 CZ after USDA dropped the US 2022 corn crop 415 mil bu from August. USDA dropped feed use 100, ethanol 50 and exports 100 to get to a carryout near 1,219. USDA also lowered weekly US corn rating 1 pct to 53 with 5 pct of crop harvest. USDA increased non US and China World corn crop 8 mmt and lowered EU only 1.2 mmt. USDA raised Ukraine corn crop 1.5 mmt and exports .5 mmt to 13.0. Key is if Russia renews the open export corridor deal. Next key USDA report is Sep 30 when they estimate Sep 1 stocks. USDA estimated US 2021/22 carryout near 1,525 mil bu. USDA dropped World corn exports 2 mmt to 183 mmt vs 203 ly. Brazil is 47 vs 44.5, Argentina 41 vs 39, Ukraine 13 vs 26 and US 57 vs 63. Non China World 2022/23 corn end stocks are est near 97 mmt vs 102 ly and 87 the previous year. This suggest 2023 South America crop production key to corn prices and demand for US corn. Some are still concerned that final US corn exports may drop to 2,000 mil bu.
WHEAT
Wheat futures ended higher but off session high. Matif rose €5 in early trade on the drop in the €uro/strength in the US dollar following the US inflation data report which came in above expectations. Fresh news was lacking. Black Sea Fob remains heavily discounted against EU values, even if the volume available is low, so EU cash buyers drop their bids to try to become more competitive. Brussels estimated Ukraine wheat crop at 26.9 mmt versus USDA 20.5 and official harvest data at 19.5 mmt. Wheat futures are adding to prices amid concern about US 2023 dry HRW weather forecast and the potential closing of the Ukraine export corridor. US export prices are higher than Russia but so far, Russia wheat exports to date are slower than needed to reach USDA goal. India has banned wheat, flour and rice exports. USDA continues to estimate India wheat exports at 6.5 mmt despite the fact India has banned new wheat, flour and rice exports.
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