Written Commentary
SOYBEANS
Soybeans ended slightly lower. USDA announced 130 mt US soybeans to China. Favorable Brazil weather and concern that China may not import as much soybean as USDA forecast and may buy less from US offers resistance. Soyoil futures continue to slide lower. BOH is at its lowest level since October. Lower than expected EPA biofuel mandate could reduce US soyoil use 400-500 mil lbs. Weekly US soybean export inspections were near 63 mil bu. Season to date exports are near 778 mil bu vs 873 ly. USDA goal is 2,045 vs 2,158. Some could see final US exports 50-100 mil bu below USDA. That could add to carryout and push futures lower. Crude oil has turned lower. There is concern about slower US/World economy despite China slowly reducing Covid restrictions. OPEC decided not to reduce production. Liquidation of long soyoil short soymeal spreads is helping soymeal futures. Favorable 2023 World soybean and oilseed crops could be negative futures.
CORN
Corn futures ended lower. It was risk-off for many markets with Crude, US equities, gold, silver and copper lower and US Dollar higher. Each day there is a different headline on what the US Fed will do concerning interest rates. Last week, There was talk that Fed may reduce the amount of rate hikes in 2023. After the jobs report showed increase in wages some feel Fed may have to increase Fed funds to 6.0-6.5 to get inflation down to 3.5-4.0. This could take some time and push US into a recession. This could lower demand for food and fuel. Brazil weather is favorable and could suggest record corn crop. Argentina is dry but some feel rains could improve early in 2023. Ukraine continues to ship corn at prices discount to US. USDA has not changed US December S/D from November in last 3 years. On Friday, though USDA could lower US corn exports 100-150 mil but and raise carryout the same. USDA could wait until the end of Jan final US report on Dec 1 stocks before adjusting feed and residual. USDA could lower ethanol us 25-50 mil bu. Weekly US corn exports were 20 mil bu. Season to date exports are near 249 mil vs 371 last year. USDA goal is 2,150 vs 2,471 ly.
WHEAT
Over the last week, Russia has been dominate seller in global Wheat trade. They continued to discount prices to do business. USDA may be too low in their est of Russia crop at 91 mmt. Some could see their crop closer to 100 mmt. This could also increase their final exports. Weekly US exports were 12 mil bu. Season to date exports are 400 mil bu vs 409 last year. USDA goal including flour is 775 vs 800 ly. US south plains is dry but some feel weakening La Nina could increase spring showers. For 2022/23 US shows US HRW end stocks near 259 mil bu vs 360 ly. SRW 87 vs 94. HRS 124 vs 140. White 69 vs 52, US 571 vs 669. Some look for US 2023 wheat crop near 1,835 and carryout near 600. HRW 220, SRW 110, HRS 150 and White 80.
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