Written Commentary
SOYBEANS
Soybeans ended lower. Soyoil gained on soymeal. Dalian soybean, soyoil and palmoil futures traded lower. This due to concern about Asian demand. The week started with a bang after USDA estimated US 2022 soybean crop at 4,378 mil bu vs 4,496 expected. This rallied SX to near 15.08. US inflation data was hotter than expected. This raised concern that US Fed will continue to raise interest rates which should push US Dollar higher and could hurt US grain export demand. USDA FAS finally released 4 weeks of export data. US soybean export commit is above last year. Still concern about future China demand for US soybeans especially with Argentina values lower offered resistance to futures. NWS forecasted 90 days of warm and dry Midwest weather which should help maturation and harvest. US basis levels are firm due to slow farmer selling. US avoided a nationwide railroad strike.
CORN
Corn futures also started the week higher after USDA lowered US 2022 corn crop. The yield was in line with the average trade guess but lower acres dropped the crop to 13,944 mil bu versus 14,088 expected. USDA also lowered US 2022/23 feed use 100 mil bu, Ethanol 50 and exports 100. This left US 2022/23 carryout near 1,219 versus 1,388 in August and 1,525 last year. The tight old crop supply puts more emphasis on USDA Sep 30 stocks report and need for early harvest. USDA FAS finally released 4 weeks of export data. US corn export commit is only 50 pct of last year. Concern about future demand for US corn especially with Ukraine, Brazil and Argentina values lower offered resistance to futures. Some fear final US corn export could drop below 2,000 mil bu. NWS forecasted 90 days of warm and dry Midwest weather which should help maturation and harvest. Corn futures bounced off session low today after Russia President said there were no changes concerning Russia invasion of Ukraine despite concern from both China and India and recent setbacks in east Ukraine. Weather watchers reported that La Nina could last into 2023. This could raise concern about South America crops. Dry weather in Central China raised talk of increase corn exports. Still most feel China will try to go without US corn until SA 2023 harvest. Some feel corn futures could drift lower into US harvest unless Russia closes Ukraine export corridor or SA weather turns dry.
WHEAT
Wheat futures ended higher after Russia President said there will be no changes in the war with Ukraine despite concern expressed by both China and India. This raised concern about Russia policy on Ukraine export corridor. NWS forecasted 90 days of warm and dry south US plains weather which could reduce soils for fall planting of the US 2023 HRW crop. The HRW 2021 supplies are already down and supplies are tight. Wheat futures rallied early this week on concern about a nationwide US railroad union strike slowing wheat shipments to buyers and increase SW feeding. Fact the strike was averted forces risk on futures liquidation. Wheat futures have many moving parts. Q3 World wheat trade is down 9 mmt from last year. Buyers may have lower resources to buy wheat. Russia fob export prices are well below US. Still their export pace to date is below the level to reach USDA goal. Fact Central Banks are raising interest rates to slow inflation, even if it pushes global economies into recession could rally the USD and reduce food demand.
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