Written Commentary
MORNING OUTLOOK
Turnaround Wednesday? Grains are mixed to higher. SK is up 10 cents and near 14.89. SMK is near 467.6. BOK is near 60.58. CK is unch and near 6.30. WK is up 1 cent and near 7.07. KWK is up 1 cent and near 8.14. MWK is down 1 cent and near 8.65. US stocks are higher. US Dollar is lower. Crude is lower. Gold, silver, copper, cocoa and cotton are higher. Coffee is lower.
Better than expected China PMI data suggested to some the economy is finally showing some post-Covid growth. This is helping some commodities including soybeans. Argentina weather remains dry lowering soil moisture and raising more concern about lower supply. Argentina farmers are protesting export taxes. Brazil Feb soybean exports were 7.7 mmt vs 6.2 ly. Oct-Feb 16.8 mmt vs 17.1 ly. USDA est Brazil export near 92.0 vs 79.1 ly. US 54.0 vs 58.7 ly. Argentina 4.2 vs 2.8 ly.
Corn prices dropped and 5 day loss are near 50 cents. Some feel funds are liquidating out of longs after USDA bearish Outlook 2023/24 numbers, higher Dollar and fears global increase in Avian flu could reduce corn feed demand. Lower feed wheat prices could also lower World corn feed demand. Weekly US ethanol numbers could also show continued increase in stocks. USDA is estimating global corn exports near 181.0 mmt vs 204.7 ly. US 48.9 vs 62.7. Brazil 50.0 vs 48.0. Argentina 35.0 vs 34.0. Ukraine 22.5 vs 27.0. There remains concern over how many corn acres Ukraine will plant during war. Our weather guy hints the 3 year La Nina to El Nino factor is a drier biased one for late spring, summer and early autumn US rainfall, but temperatures will have the final word about summer crop production and the PDO may have the most to say about the strength of any high pressure in central US and the impact temperatures will or won’t have on 2023 US grain and oilseed production.
Wheat futures have dropped to lowest level since Sep 2021. Most of the drop due to lower demand for US exports and lower Russia export prices. Turkey bought Russia wheat near $285 fob. US south plains weather remains dry. EU is also mostly dry. There remains little price impact due to drone attacks on Russia, Putin admission of war losses and new US and EU sanctions on Russia Banks that finance exports. Wheat futures are oversold with Managed funds short 100,000 contracts. More snow/moisture is forecasted for US north plains.
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