Written Commentary
SOYBEANS
The soybean complex was higher across the board. Soybeans finished strong up $.13 – $.22 making new highs on the close. Soybean meal was up $5 – $7 while soybean oil was up 85 – 125. Next resistance for Mch-23 soybeans at $15.55 ½ vs. the today’s high of $15.49. Mch-23 soybean oil surged thru resistance at its 50 MA trading to its highest level in a month. Next resistance is the 100 day MA, currently 64.53, compared to today’s high of 63.01. No export announcements today. Export inspections at 58 mil. bu. were in line with expectations. YTD commitments are up 3.5% from YA, vs. the USDA forecast of down 8%. Shipments to China totaled 37 mil. bu. Brazil’s soybean harvest est. as of late last week ranged from 21 – 25%, vs. 33% YA. Dr. Michael Cordonnier lowered his Argentine soybean production est. another 2 mmt to 34 mmt, well below the USDA forecast of 41 mmt. A Bloomberg survey suggests US soybean acres this year will rise 1.1 mil. to 88.6 mil. Spot board crush margins improved $.07 to $2.37 per bu., the highest level since early Jan-23.
CORN
Prices closed $.01 – $.03 higher. Weekend weather brought isolated areas of frost across southern Cordoba and northwest Buenos Aires in Central Argentina. While significant crop losses are not expected, the extent of the damage likely won’t be known for several days if not weeks. The rest of this week is expected to be dry across Argentina with next prospects for rain not until early March. Heavy rains across central and northeast Brazil will cause delays to soybean harvest and 2nd corn plantings. Rains across Mato Grosso were a bit more scattered enabling harvest progress to move along. Forecasts suggest normal to below normal rains from now until the middle of next week. Export inspections at 25 mil. bu. were in line with expectations. YTD inspections at 541 mil. are down 37% from YA, vs. the USDA forecast of down 22%. Brazil’s 2nd corn crop is estimated to be 40% planted, behind the YA pace of 50%. Ukraine’s Ag. Ministry reports corn exports have reached 17.4 mmt since July-22, down 7% from YA vs. the USDA forecast of down 17%. The Rosario Grain Exchange estimates Argentine exports Mch thru June will likely drop 40% from YA, as a small portion of this year’s crop was planted early. The Bloomberg survey forecasts 2023 US corn acres to jump 2.3 mil. to 90.9 mil. February is the month that determines the Revenue Insurance Guarantees for the upcoming planting season, a key determinant for planting decisions. The average closing price for Dec-23 corn in Feb-23 has been $5.95 so far, just above the record high from last year at $5.90. If the average fall price is higher the insurance guarantee is based off that new figure. Right now Nov-23 average close in Feb-23 is $13.76, just below the Spring high of $14.32 ½ from last year. The current ratio Nov-23 beans/Dec-23 corn at 2.35 has been trending up from the January low of 2.26.
WHEAT
Prices ended up closing lower across the board. KC was down $.02 – $.03, MGEX down $.04 – $.06, while Chicago was down $.10- $.15. Mch-23 KC is surged to $1.55 over Chicago, a new all-time high for the by-class differential. Export inspections at 14 mil. bu. were in line with expectations. YTD commitments are down 3% from YA, in line with the USDA forecast. Ukraine exports since July-22 have reached 10.8 mil. tons down 39% from YA. Russia exported 730k tons of wheat last week, up from 540k the previous week. The Indian government will offer 2 mil. tonnes of wheat to the open market in an attempt to lower prices. Wheat markets shrugged off threats from Russian President Putin declaring they may step back from the New START treaty that limits nuclear arms between the US and Russia.
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