Written Commentary
SOYBEANS
Prices were lower across the board with soybeans down $.24 – $.32, soybean meal down $9 – $15, while soybean oil was 30 – 40 lower. May-23 soybeans plunged below its 50 day MA while closing within a few cents of its 100 day MA at $14.75 ½. May-23 soybean meal held just above the Feb-23 low of $464.50. There were no export sales announced today. Deliveries against Mch-23 soybeans were 411 contracts, all put out by JP Morgan (Cargill ??). No meal deliveries and 8 contracts of soybean oil. Dr. Michael Cordonnier lowered his Argentine production forecast another 2 mmt to 32 mmt, vs. the USDA forecast of 41 mmt. This afternoon’s EIA data showed only 885 mil. lbs. of soybean oil was used for the production of biofuels in Dec-22, down 6% from Nov-22 and Dec-22. In the first 3 months of the Oct-22 thru Sept-23 MY soybean oil usage has reached 2.734 bil. lbs., up 5.6% from YA, vs. the USDA forecast of a 12% increase. I suspect the cold spell around the Holidays held renewable diesel production in check as actual refinery capacity grew 7% to 2.854 bil. gallons in Dec-22. Conab estimates Brazilian soybean harvest at 34% as of Feb. 25th, down from 42% YA. Brazil will set its biodiesel mandate in March. Industry group have been pushing for an increase from the current 10% to 12%, with additional increases to 13% in May/June, 14% July thru Feb-24, and 15% by Mch-24. Tomorrow afternoon the USDA will release the Jan-23 monthly crush report. Jan-23 crush is expected to have increased to 189.6 mil. bu. up from 187.4 mil. in Dec-22. Estimates range from 188 – 191 mil. bu. Soybean oil stocks are expected to increase to 2.368 bil. lbs., up from 2.306 bil. in Dec-22. Bean oil stock estimates range from 2.350 – 2.450 bil. lbs. Seemingly all the recent demand reports have not been supportive.
CORN
Prices closed $.06 – $.13 lower. May-23 corn violated the Dec-22 low of $6.36 ¾ closing at its lowest price since Aug-22. Deliveries against Mch-23 corn totaled 352 contracts. Argentine weather is taking on less of a role in price discovery as crops more toward maturity. Widely scatterd showers are possible today followed by a week of hot dry weather. Normal to below normal moisture in central and northern Brazil should enable soybean harvest and corn plantings to pick up pace relative to the historical average. There were no export announcements today. Dr. Michael Cordonnier reduced both Argentine and Brazil corn production by 2 mmt. His estimates are now 41 mmt and 121 mmt respectively, below the USDA forecasts of 47 mmt for Argentina and 125 mmt for Brazil. South Korea has reportedly purchased nearly 200k tons of feed grade corn in 3 separate tenders for either US or South American orgin for June shipment. Price expected to average just over $328/mt CF. EU corn imports as of Feb. 26th for 22/23 MY have reached 17.95 mmt, up 60% from YA. Texas corn plantings are reported at 5%. Lighter rainfall across the deep US south should enable a good start to early corn plantings. Ethanol production tomorrow is expected to see a modest drop from last week’s production rate of 1,029 tbd. Corn prices seem to be in search of demand.
WHEAT
With the exception of Mch-23 MGEX wheat all 3 classes closed $.02 – $.07 lower. Spot Chicago futures closed at its lowest level since Sept-21 on the weekly chart. Spot KC is holding just above its Jan-23 low just above $8.00. Deliveries against Mch-23 contracts were 910 Chicago and 245 KC. Ukraine has asked the UN to start negotiations on extending the Black Sea Grain Initiative. No confirmation on when or if the talks will begin. Turkey has reportedly purchased 790k tons of milling wheat from Russia and Ukraine. Prices ranging from $308 – $318 mt CF for delivery between March and late May. Jordan apparently passed on their recent tender for 120k mt of milling wheat. South Korea reportedly bought 50k mt US wheat, price ranged from $305.50 for US soft white, $359.50 HRW and $363.50 for DNS wheat. EU soft wheat exports thru Feb. 26th have reached 20.5 mmt, up 7% from YA. 7 US states reported crop conditions yesterday. 3 states improved, Oklahoma, SD, and Texas. 4 states saw ratings slip, Colorado, Kansas, Montana, and Nebraska.
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