Ag Market View for Mar 17.23
The soybean complex was lower across the board today and mixed for the week. Spot board crush margins continue to grind sideways to lower, closing the week at $1.81 down $.04. Soybean oil crush margins improved to 38%. May-23 soybeans violated support at the Feb low, trading down to a 3 month low of $14.70. It also traded below its 50 day MA for the first time since Nov-23. Weak basis in Brazil continue to pressure soybean valuations while whispers that Brazilian beans may be imported into the US. Yesterday the BAGE lowered their Argentine production forecast another 4 mmt to 25 mmt, their smallest crop this century. While some Brazilian soybeans may find there way into the SE US, my guess is overall volume likely to be small. Several tons of Brazilian soybeans will need to be moved into Argentina to supply their crush industry. The soybean complex was one of the few areas Money managers were net buyers in the week ended Tues. Mch 7th.
Prices closed $.02 – $.03 higher supported by another announced the sale of corn to China. Today’s 191k ton sale (7.5 mil. bu.) brings the weekly total of Chinese purchases to 83 mil bu. Spot corn has rebounded $.30 bu. from last week’s low when word of Chinese purchases surfaced. Russia claims the BSGI has been extended for 60 days, despite demands from the UN and Ukraine for a 120 day extension. For now the Black Sea Corridor remains open. Forecasts for heavy rains across north and central Brazil will continue to slow soybean harvest and corn plantings. Localized flooding is possible in Mato Grosso. Good rains developed across far southern Argentina in the past 24 hours, unlikely to have had a positive impact on crop production. The BAGE lowered their Argentine corn production another 1.5 mmt to 36 mmt vs. the USDA at 40 mmt. While much of the 2nd corn crop is planted in Mato Grosso Brazil, the forecast for heavy rains and potential flooding does raised concern over crop development and fertilizer leaching. Money managers were net sellers of 47,500 contracts week ended Mch. 7th, lowering their long position to 21,000 contracts, their smallest position since Sept. 2020. March 1st cattle of feed at 96% of YA, was in line with expectations. Placements at 93% of YA and marketing’s at 94% were slightly below expectations.
Prices were higher across the board, led by KC which was $.14 – $.16 higher. MGEX and Chicago were up $.08 – $.12. All classes had gains of over $.30 for the week. Wheat’s strength is attributed to uncertainty of the BSGI along with adding weather premium. The driest areas of western Kansas and Nebraska along with the Texas panhandle all received very little rain from the most recent system. Forecasts call for little to no rain over the next 7 days, further deepening the drought in these areas. Egypt’s GASC bought 120k tons of wheat from Ukraine for 298.70/mt CF. In the week ended Mch. 7th, money managers were net sellers of 9,000 contracts of Chicago wheat, extending their short position to just over 100,000 contracts, their largest short position since Jan-2018.
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