Written Commentary
SOYBEANS
Soybean futures ended lower. Soymeal gained on soyoil. US soymeal supplies remain tight and poultry demand remains strong. Soyoil is also losing to soymeal on talk some may imports cheaper South America soyoil into the US. USDA finally reported the latest US soybean export sales figures. USDA reported that 31 mil bu of soybeans were sold last week. US total commit is near 929 mil bu vs 819 last year. China is buying soybeans, just not from the US. SOAM soybeans are cheaper. Yesterday Argentina sold another 10 cargos of soybeans to China, adding to the already 20 soybean cargos sold to China. For now, Argentina soybeans along with Brazilian soybeans are being sold to China in the timeframe where it should be US. Some fear US 2022-23 export number could be closer to 1,900 mil bu vs USDA 2,085.
CORN
Corn futures ended lower and near session low. CZ ended near 6.77. Overnight high was 6.90. 200DMA is near 6.70. Trend line support from the mid July low is near 6.40. Lower USDA September crop and carryout offered support to recent high. In corn no one knows what will happen to the Ukraine export corridor. Chinese corn demand is the great unknown. The 2022-23 Chinese corn balance sheet suggest China will need 25-30 mmt of corn with some doubting USDA 274 mmt production estimate. But the reeling Chinese economy would suggest less than 10 mmt of corn imports. The continued and growing tensions between Washington and Beijing would suggest as little as possible will come from the US. China may forego US corn and wait until Brazil 2023 safrinha corn crop becomes available and buy a good chunk of their corn needs from Brazil starting in July of 2023. Last week US corn sales were 23 mil bu. Total commit is near 484 mil bu versus 967 last year. Some feel this due to lower global demand and lower Brazil, Argentina and Ukraine corn export Prices. NOAA 30 and 90 day forecast calls for warm temps and dry US Midwest weather which should aid harvest advancement.
WHEAT
Wheat futures ended lower after US RR and unions came to tentative contract agreement to avoid a nationwide strike. Some flour buyers had reached out for trucks to keep producing. Those had to be cancelled. World Q3 wheat exports are down 9 mmt from last year. Buyers may be having trouble buying wheat due lower revenues. US 30 and 90 day forecast is for continued warm and dry weather for planting US 2023 HRW wheat crops. The US dollar is not backing down. With the Fed readying a 75-basis point rate hike on the 21st, an outside chance of a shock and awe 100 bp hike the USD will not set back until the Fed resets. This week’s readings for US CPI and PPI would suggest we are aways from the Fed reset.
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