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Ag Market View for Jan 18.23


Soybean futures closed $.15 – $.18 lower after trading to a 7 month high early in the session.    The speculative buying may have run its course in the short term as Mch-23 failed its attempt at trading above $15.50.  Today’s high has been $15.48 ½.  Soybean meal was down $5 – $8 after making new contract highs early.  Soybean oil was 15 – 30 higher.  Goldman Sach’s has suggested commodities will outperform equities in 2023.  Today’s trade felt like money manager selling overwhelmed inflows to the long side by index funds.  There were no export announcements today, this following yesterday’s weaker than expected Dec-22 NOPA crush report.  The weaker crush is largely blamed on winter weather around the Holiday’s.  Despite the lower crush, oil stocks were above expectations with implied monthly demand being the lowest in 15 months.  Spot board crush margins rebounded again today with soybean oil gaining on meal.  Product values have settled in near 60% meal and 40% oil.  If we see the weather shift as forecasted, it wouldn’t be shocking to me if today’s high held thru the Mch 31st stocks and acreage report. 


Prices closed $.03 – $.04 lower after making a 2 month high in early trade.  Spotty showers arrived in Argentina overnight.  Accumulated coverage wasn’t widespread, however the next round of moisture Thursday thru Sat AM expected to provide .50 – 2.0” amounts.  Rainfall chances every 3 – 4 days over the next few weeks provides confidence for an improved Argentine weather outlook. No export announcements this AM. Chinese customs showed their corn imports in Dec-22 at 870k tons, down 35% from Dec-21.  For all of 2022 China imported only 20.6 mt of corn, down 27% from 2021.  2022 barley imports were down 54% while sorghum imports rose 8%.  Chinese hog producers are being urged to curb excess hog herds by the Ag. Ministry.  This in response to prices having fallen below the cost of production.  EU corn imports since July have reached 15.7 mt, nearly double the 8.3 mt YA.  2nd corn crop plantings in the Southern Brazilian state of Parana are underway at 1% complete.  US ethanol production data delayed until tomorrow at 10 CST.  Range of estimates is 920 – 993 tbd, vs. 943 tbd the previous week.  One long term trend still apparent after last week’s WASDE reports is the US continues to be less of a factor in global ag. trade. 


All 3 wheat classes closed lower with Chicago down $.06 – $.09, while KC and MGEX were down $.10 – $.15.  China’s Dec-22 wheat imports at 1.1 mt were up 14.5% from Dec-21.  2022 imports totaled nearly 10.0 mt, up 2% from 2021.  Algeria likely bought between 510 – 600k tons of milling wheat in their recent tender closing today.  Likely all was sourced from Black Sea origin, price near $335/ mt cf.  EU wheat exports since July-22 have reached 17.7 mt, vs. 16.6 mt YA.  The BA Grain Ex. indicates Argentine wheat exports will reached 5.9 mt, down 62% from YA and well below the USDA forecast of 7.5 mt.  The biggest surprise in global balance sheets last week was the fact the US left the Russian wheat forecast unchanged at 91 mmt.  Most private est. are running between 100 – 104 mmt.  The US forecasts Russian exports at a record 43 mt.  IKAR recently raised their export forecast to 45.5 mt.  If we adjust the Russian production up to 102 mt, while using the higher IKAR export forecast Russian stocks would be a record high, while stocks to use at over 25% would be the highest in over 20 years.  I’d expect Russian wheat stocks to continue to cap rally attempts.

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