Written Commentary
SOYBEANS
Soybean rallied on increase talk of lower 2022 South America supplies. USDA announced new US old crop and new crop soybean sales to unknown. Some feel this could be China. China is the largest buyer of World soybeans and was planning to take more soybeans this marketing year from Brazil than US. Lower Brazil supplies could shift some China buying to US. Dalian soybean, soymeal, soyoil prices were sharply higher. Malaysian palmoil futures were lower. Weekly US soybean exports were at 44 mil bu vs 70 last year. Season to date exports are 1,383 mil bu vs 1,814 ly. USDA goal is 2,050 vs 2,265 ly. Some could see final exports near 2,160. Trade estimates US 2021/22 soybean carryout at 310 mil bu vs USDA 350. One group could see final carryout closer to 215 due to demand up 135 mil bu versus USDA.
CORN
Corn futures gapped open higher and traded higher. Managed funds added to net longs on talk of lower South America supply and the potential for higher US demand. While soybean and soymeal futures are making new highs, March corn future is trading just below contract highs. Some feel this could be due to fact corn losses in South America could be less as a percent of the expected crop than soybeans. Some feel parts of S Brazil 1st crop may have irreversible damage. Normal 30 day Brazil weather could help the larger 2nd crop. China is so far also not as an active buyer of US corn as soybeans. US farmer has also been a steady seller of old crop corn on the recent rally. Last year post China New Year celebration, China returned as a large buyer of US corn. Weekly US corn exports were at 41 mil bu vs 62 last year. Season to date exports are 732 mil bu versus 850 last year. USDA goal is 2,425 vs 2,753 last year. Some could see final exports near 2,680. March corn has had a nice run since the Sep, 2021 low near 5.06 to the Dec, 2021 high near 6.17. Prices backed off the a mid Jan low near 5.85 only to make new high the end of Jan at 6.42. Early Feb low was 6.10. Corn is adding back some inflation premium with talk that some feel final US corn demand could be up 345 mil bu which could drop final US 2021/22 corn carryout to near 1,200 versus USDA 1,540. Trade feels USDA will drop US carryout to only 1,512 and wait for more news about South America supplies, Ukraine corn exports and demand for US corn exports.
WHEAT
Wheat futures ended higher. Some feel wheat futures are following higher corn and soybeans. Wheat market may be seeing some short covering due to higher commodity prices. Wheat could also be adding some kind of war premium as Russia continues to add troops to Ukraine border especially in Belarus. Weekly US wheat exports were at 15 mil bu vs 17 last year. Season to date exports are 515 mil bu versus 626 last year. USDA goal including flour is 825 mil bu vs 992 last year. Stats Canada is expected to estimate Dec 31 wheat stocks at 17.3 mmt vs 25.0 last year. US drought index shows drier US south plains soils than in November. US 30 day south plains forecast is dry. French wheat futures traded lower after China agreed to take any quality of Russia wheat for import. EU had been a good seller of wheat to China. KC wheat futures have had a volatile ride from the 6.00 July, 2021 low. Futures rallied to 7.76 in Aug, dropped to 6.79 in Sep, rallied to 8.92 in Nov, dropped to 7.81 on Dec, rallied to 8.71 in late Dec dropped to 7.43 in early Jan, 2022, rallied to 8.49 in late Jan only to drop to 7.53 in early Feb. Less that prefect US spring weather could rally KC to 9.00.
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