Written Commentary
SOYBEANS
Soybean futures ended little changed. Market trying to balance dry Argentina and S Brazil weather versus talk of slower soybean export demand to China. Soymeal gained on soyoil. This despite higher palmoil prices due to lower Malaysian stocks and higher exports. Trade est US Nov NOPA soybean crush near 181.5 mil bu vs 179.4 last year. NOPA soyoil stocks are est at 1,619 mil lbs vs 1,832 ly. Trade estimates weekly US soybean export sales near 1,500-2,000 mt vs 1,716 ly. Last week, total commitment was near 38.8 mmt vs 38.7 ly. USDA goal is 55.6 mmt vs 58.7 last year. Last week China bought 40 soybean cargoes, US Dec-Jan, Brazil Jan-April. Some feel China is now 75 pct covered for Jan-Feb. Increase China Covid cases could lower their raw material import demand.
CORN
Corn futures ended lower. CH range was 6.46-6.53. Corn futures are trying to find value with export and ethanol demand slowing versus tight old crop supplies and dry Argentina and S Brazil weather. Brazil December exports were near 6.8 mmt vs 3.4 ly. Some feel USDA estimate Brazil 2022 crop near 116.0 mmt vs 87.0 the previous year. USDA est 2022/23 Brazil exports 47.0 vs 44.5 ly. Some feel USDA may be understating last years Brazil crop. IEA raised World 2022 and 2023 Crude demand. This has helped Crude rally from 70-77. This offers support to corn futures. Still, weekly US ethanol production was down 1.5 pct from last week and down 3 pct ly. Stocks were up 5 pct from last week and up 17 pct from last year. Margins are negative. US Ukraine Ag Attache lowered Ukraine corn crop from 27 mmt to 23. They raised exports from 17.5 to 20.0. Harvest is 60 pct done which suggest 9 mmt are still in fields and may not be harvested until spring. Weekly US corn export salles are estimated near 600-900 mt vs 691 last week. Last week, total commit was 19.0 mmt vs 36.5 ly. USDA goal is 52.7 mmt vs 62.7 ly.
WHEAT
Wheat futures ended lower led by KC. Some look for winter storm to drop snow across parts of NE and KS. Some feel wheat prices were also lower on talk that Ukraine Odesa port was partially back up and working after weekend bombing. India domestic wheat prices are record high. India wheat stocks are only 19 mmt vs 38 last year and lowest in 6 years. Some feel USDA crop est may be too high and India may not be able to export 2.7 mmt. Weaker US dollar, crude oil strength, and weaker CPI might help support futures. Funds hold a sizable net short position and war escalating could offer support. Record Russian and Australian wheat crops offer resistance. US cash basis finding strength for all three wheat classes with weather and logistical challenges for NSW, tight stocks and feeding for SRW, and bounce back after large dip past 30 days on HRW with talks of HRW into feed rations for Q2.
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