Written Commentary
SOYBEANS
The soybean complex closed mixed. Soybeans were up $.01 – $.03. Soybean meal was mixed with old crop slightly lower, new crop $2 – $3 higher. Soybean oil was 30 – 40 lower. There were no export announcements today. Demand for US soybeans will remain weak with Brazil offering new crop supplies $1.00 below US prices. Argentine crop ratings slipped this week despite better than expected rains across the northern half key production areas. The BAGE reported soybean ratings as only 9% G/E, down from 13% LW. The crop rated Poor/VP jumped 8% to 56%. They went on to cautioned that the potential for an early frost may further damage the drought impacted crop. While they didn’t lower their current production forecast of 38 mmt, they implied lower est. were likely. Late yesterday the US EPA announced a shortened window allowing US farmers to apply dicamba herbicide. This year’s deadline is June 12th, compared to June 20th last year. The intent is to reduce the risk for the herbicide to spread to nearby fields.
CORN
Prices closed up $.01 – $.03. Rains this week across the northern half of Argentina were better than expected. Next weeks crop ratings will help determine if the rains were of much benefiit to the crop. Clearly they came too late for this week as both corn and soybean conditions slipped. Cooler, drier conditions will prevail for the next week before above normal temperatures return next weekend. Week 2 of the forecast offers better rains across Western Argentina. Good harvest progress will be made in Brazil this weekend before above normal precipitation returns next week. Moisture levels for their 2nd corn crop will be near ideal. The USDA did announce the sale of 120k tons (5 mil. bu.) of corn to an unknown buyer. The BAGE reported crop conditions fell to 11% G/E, down from 20% LW. 45% of the crop was rated Poor/VP up from 34% LW. Overnight Ukraine stated that discussions with the UN and Russia to extend the Black Sea Grain deal will begin next week. The last extension reached in Nov-22 expires on Mch. 19th. Grain prices will be sensitive to headlines surrounding these negotiations which are likely to go on for at least a few weeks. A Ukrainian grain group expects corn production to reach 21.1 mmt in 2023, down from 27 mmt in 2022, and well below the 42 mmt harvested in 2021 before the Russian invasion. Despite the reduced output they expect exports to reach 20 mmt, down from 22.5 mmt from the 2022 crop, and 27 mmt from the 2021 crop. Corn exports are likely to remain elevated for the next few months, at least compared to the first half of the MY, until the 2nd Brazilian crop is available.
WHEAT
Prices closed mixed. Most Chicago and MGEX contracts closed within $.01 of unchanged. KC was up $.07 – $.09. Mch-23 KC closed $1.41 premium over Chicago, a new high. Ukraine expects 2023 wheat production to reach 17.4 mmt, down from 21 mmt in 2022, and well below the 33 mmt in 2021. They expect to be able to export 14 mmt, actually up from 13.5 mmt from the 2022 crop, however below the 19 mmt sold from the 2021 crop. Tunisia reportedly paid an average of 338.73/mt CF for 100k mt of soft wheat for Mch-23 shipment. Russia is the likely supplier.
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