Written Commentary
SOYBEANS
Soybeans ended higher. For the month soybean futures have rallied 110 cents, soymeal $32 and soyoil 2 cents. Most of the rally was linked to debate over how low South America soybean crop is and how much demand could shift to US. Argentina rated their crop 19 pct G/E vs 28 last week. Some private estimates are as low as 38 mmt vs USDA 54.Some estimate Brazil crop near 125 mmt vs USDA 134. Paraguay 4 mmt vs USDA 6.3. There were reports that Paraguay may be asking to import Argentina soybean. 27 mmt drop in SA crop this late in the season would be unprecedented. Where would the World find 1,000 mill bu of beans before the next US harvest? This week, China cancelled Brazil soybean cargoes, announced soybean sales from reserves and are buying US new crop soybeans. This week. China was 92 pct of new US new crop soybean sales. Bulls look for a test of 17.00 SK.
CORN
Corn futures ended higher. Corn futures dealing with more than supply and demand numbers. Inflation is on the rise in US, Canada and UK. Will US Central Bank raise rates in 2022? Will this slow inflation or US economy. US trucker and labor shortage is adding to supply chain challenges. Mid February Midwest weather is not helping. Some estimates that South America corn crops could be down 23 mmt or 900 mil bu. Were will the World get than much corn? Some are already estimating US 2021/22 Corn demand near 15,155 mil bu with export 2,650 and ethanol use 5,400. USDA is 2,425 and 5,325 respectively. Then there is 2022/23. Next week USDA will release an estimate of US 2022/23 corn supply and demand at their Annual Outlook Conference. Most are near 91.0 million planted acres, 180.5 yield, total supply near 16,135 mil bu, demand near 15,035 and carryout 1,100. Many doubt USDA will be that high in demand or that low in carryout, There last baseline total supply was 16,782, demand 14,830 and carryout 1,952. This weeks NOAA 90 day Weather forecast called for above normal Midwest temps and below normal rains in US SW. Rains in US delta has raised concern that wet spring weather could suggest a year like 1983 when rains stopped during the summer. US Sec of Ag has asked DOJ to investigate farmers input cost. Most of the increase was seed, fertilizer and energy.
WHEAT
Wheat futures ended mixed. WK ended lower and near 8.00 with a range of 7.97 to 8.18. US SRW export demand remains slow and Midwest and Delta rains should be helping crops. KWK ended high with a range of 8.20 to 8.54. NOAA US south Plains 90 day weather forecast suggesting drier than normal and warmer than normal temps offer support. Cold temps this weekend then warmer temps could start early growth with overall rainfall less than ideal. Managed funds are still short Chicago wheat. There remains misinformation about if Russia will invade Ukraine or not. It is a tug of war between supply and demand wheat bears and uncertainty over the futures of Black Sea wheat exports and US spring and summer weather. Informa continues to forecast higher 2022 World wheat crop especially in US and Canada. US wheat export Commit remains below pace to reach USDA goal. MWK ended higher with a range of 9.54 to 9.70.
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