Ag Market View for Jan 24.23
The soybean complex closed mixed. Soybean futures were slightly lower across the board. Mch-23 soybeans rebounded enough to fill a gap from yesterday’s open. Soybean meal was mixed with Mch-23 closing $2 lower, while the deferred contracts were $1 – $3 higher. Soybean oil was down 60 – 100, closing at 1 month lows. Oil World is forecasting Argentina’s soybean crop at only 34 mmt, well below the USDA est. of 45.5 mmt. This is also well below the previous low est. at 39 mmt from Dr. Michael Cordonnier. Oil World’s production forecast for Brazil is 152 mmt, and Paraguay 9 mmt, both 1 mmt below the Jan-23 USDA forecast. If the O.W. Argentine production forecast were verified at 34 mmt, this would be their smallest crop since 2008/09. The implied yield at 2.1 mil. tons per HA would also be lowered than the 2.3 mt per HA during the 2017/18 drought. Assuming all the Oil World SA production forecasts, down 13.5 mmt from USDA, global production would still be a record at 374.5 mmt, all other countries held constant. Harvest across the northern Brazilian state of Matto Grasso has reached 6% just below the 5 year average of 9%. Yesterday AgRural reported all of Brazil’s harvest reached 2% as of last Thur., down from the 5% pace from YA. Export markets remain quiet with China on Lunar New Year holiday this week. EU soybean imports for 22/23 MY have reached 6.1 mt, down 19% from YA. S&P Global Insights is forecasting 2023 US soybean acres at 88.0 mil., up from 86.3 in 2022, and up from 87.0 mil. in the Nov-22 USDA Baseline projections.
Prices turned around in a major way with no major news. Old crop was up $.10 – $.11 while new crop was up $.05 – $.06. Mch-23 closed back above the 100 day MA at $6.74 ½. There were no significant changes to the South American weather forecasts. Light rains moved thru Central Cordoba, southern Santa Fe and parts of Buenos Aires overnight and today. Forecasts offer 2 more significant rain events over the next 10 days. The first beginning tomorrow extending into the early part of the weekend. The second beginning the middle part of next week. There seems to be a strong underlying support to corn prices on breaks perhaps anticipating strong demand as US prices have become more competitive in the global marketplace. The USDA announced the sale of 130k tons (5 mil. bu.) of corn to an unknown buyer. US and Mexico officials continue to discuss Mexico’s planned ban on GMO corn imports beginning a year from now. So far no resolution to the dispute. Brazil and Argentine officials this week announced their proposed plan to create a common currency in an effort to boost trade between the 2 SA countries. EU corn imports for the 22/23 MY have reached 16.1 mmt, nearly double the 8.9 mmt YA. S&P Global Insights is forecasting 2023 US corn acres at 90.5 mil., up from 88.6 in 2022, however down from 92.0 mil. in the Nov-22 USDA Baseline projections. Higher US winter wheat acres has led to their lowered corn acres. Tomorrow’s EIA ethanol production report is expected to show a slight drop from last week’s 1,008 tbd pace.
All 3 wheat classes closed with double digit gains for the day, rebounding from yesterday’s selloff. Ukraine’s grain exports thru the Black Sea last week reached 894k tons, up 82% from the previous week. 35 vessels await inspection, up from 30 last week. Another 85 vessels are awaiting to participate in the BSGI. EU wheat imports for 22/23 have reached 18.1 mmt, up 6% from YA. S&P Global Insights is forecasting 2023 US spring wheat acres at 11.2 mil., up 3.4% from YA. Durum acres forecast at 1.687 also up 3.4% from YA. The next winter storms continues to bring a mix of snow and rain across a wide stretch of the nation’s midsection. Look for Thursday’s drought monitor to show further reductions in drought impacted areas.
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