Written Commentary
SOYBEANS
Prices were down $.06 – $.10 in old crop, $.02 – $.03 in new crop. Soybean meal was up $1 – $2, while soybean oil was down 75 – 110. May-23 soybeans briefly violated it’s 50 day MA at $15.09 ½, however recovered to close back above it. Next support is at the Feb-23 low of $15.00 ¼. There were no export sales announced today. Soybean inspections at 25 mil. bu. were below expectations of 40 – 50 mil. and the lowest in nearly 5 months. While YTD inspections are still up 3% from YA, vs. the USDA forecast of down 8%, they continue to slip vs. YA as Brazilian soybean and soybean meal offers remain below the US. AgRural estimates Brazil’s harvest has reached 33% as of last Thursday Feb. 23rd, vs. the YA pace of 43%. An Argentine farm group next week is expected to protest Government policy seeking better taxation, financial support, and more favorable exchange rates. Friday’s CFTC report showed as of Jan. 31st money managers were long 175,500 contracts of soybeans, their largest long position since April-22. MM’s were also long 141,000 contracts of soybean meal. MM’s long position in soybean oil was down to only 31,000 contracts, the smallest since Aug-22. There was speculation today that China may be looking to sell back 1 mmt of soybeans they had purchased from Argentina. Perhaps looking to replace this volume with cheaper supplies from neighboring Brazil
CORN
Prices were down $.05 – $.07 in old crop, while new crop was down by less than $.01. Spot corn slipped to its lowest level in nearly 3 months. Next support in May-23 is the Dec-23 low of $6.36 ¾, vs. today’s close of $6.43 ½. Little change with South American weather as a hot, dry weather this week across Argentina is expected to push crops toward maturity. Weather for Brazil is generally favorable. Spotty rains across the north central growing regions should allow soybean harvest and 2nd corn seedings in Mato Grosso to accelerate. More widespread rains in the South in RGDS will benefit later developing crops. Rains across Parana and southern MGDS likely to slow soybean harvest and corn seedings. There were no export announcements today. Export inspections at 23 mil. bu. were at the low end of expectations of 20 – 30 mil. YTD commitments are down 38% from YA, vs. the USDA forecast of down 22. As of Jan. 31st MM’s long position in corn was nearly 220,000 contracts. Likely under 200,000 by today’s count. Friday’s cattle on feed report showed cattle inventories at 96% of YA, slightly below expectations while continuing to suggest weaker domestic consumption. No update on when negotiations to extend the Black Sea Grain Initiative will begin. Estimated count of vessels awaiting inspections stands at 137, 112 inbound, with 25 outbound.
WHEAT
Wheat continues to lead to the downside with all 3 classes again down double digits. Chicago closed $.10 – $.12 lower while KC and MGEX were down $.12 – $.18. Spot Chicago is at its lowest level since Sept-21. Spot KC is closing in on its Jan-23 low of $8.03. Export inspections at 22 mil. bu. were actually above expectations and the highest since early Oct-22. YTD inspections are down 2% from YA, vs. the USDA forecast of down 3%. Today Egypt stated they have 4.6 months of wheat supplies in reserve. As of late Jan-22 MM’s were short 63,600 contracts of Chicago wheat. Weekend moisture across the southern US plains was better than expected. Some states have reported monthly crop ratings this afternoon. It’s likely weekend rains weren’t incorporated into today conditions as ratings declined in key states that received weekend rains, Kansas, Colorado, South Dakota, and Nebraska. Complete condition and progress reports are expected to begin next Monday Mch. 6th.
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