Written Commentary
SOYBEANS
Soybeans traded higher. Talk of lower South America soybean supply offered support. Parana state estimated their soybean crop at 12.8 mmt or down 35 pct from previous estimate of 18.4. This and talk of lower RGDS and Paraguay crops could drop South America crop closer to 169-179 mmt versus USDA Jan estimate of 199. Abiove estimated Brazil soybean crop at 135.8 mmt down 4.2 from previous est and exports at 86.9 also down 4.2 mmt from previous est. USDA est of Brazil exports is 94.0. Weekly US soybean export sales were 1,025 mt. Total commit is 44.1 mmt vs 57.7. USDA goal is 55.7 vs 61.7 ly. Nearby soybeans traded over 14.50 on weekly chart. This technically could suggest a test of 15.00. Some have raised US soybean crush. This to satisfy higher soyoil demand. This continues to weigh on soymeal as pct of crush. Same group now estimates US soybean carryout at 310 vs USDA 350.
CORN
Corn futures ended slightly lower with CH near 6.25 with a daily range of 6.21-6.27. Talk of lower South America crops helped support futures. Sharply higher US Dollar offered resistance to corn futures and most commodities. Crude oil futures had a range of 86.20-88.54 ending down near 86.52. 88 was highest price since Oct, 2014. Feb Nat Gas had a wide range ending higher as suppliers try to find extra Nat Gas for EU if Russia cuts EU off. USDA currently estimates Brazil and Argentina corn crop at 169 mmt versus 137 ly. Some feel final South America corn crop could be closer to 150 mmt. There is also concern a Russia invasion of Ukraine could reduce the 17 mmt of corn they are forecasted to exports. Weekly US corn export sales were 1,402 mt. Total commit is near 43.9 mmt vs 48.6 ly. USDA goal is 61.6 mmt versus 69.9 last year. Some could see final US exports closer to 68.2. This an increase in ethanol use could drop US 2021/22 corn carryout closer to 1,200 mil bu versus USDA 1,540. This leaves little room for extra corn export demand. Increase in demand could force futures higher to ration demand and try to increase US 2022 acres. One group this week estimated US 2022 corn acres near 91.5 million versus 93.3 last year. This could produce a crop near 15,000 mil bu versus 15,115 last year. Key then is 2022/23 demand. They estimate demand near 14,575 which would suggest a carryout near 1,600. Others have a crop closer to 14,900 and demand near 15,040. This would suggest a carryout closer to 1,150.
WHEAT
US wheat futures ended lower. Matif wheat traded lower and back into a downtrend channel. There were unfounded rumors of an agreement between NATO and Russia that would end the Ukraine conflict. EU wheat supplies are low. This questions the 16 mmt needed to meet 32 exports. USDA est EU wheat exports at 37.5. There is also questions if Russia can export USDA goal of 35.0 mmt. Australia may not be able to offset EU and Russia losses. Australia export capacity could be sold out. There is also talk that EU Banks may be pulling trade finance from Black Sea businesses. GASC announced a tender after futures closed. US weekly wheat export sales were 676 mt. Total commit is 17.2 mmt vs 21.7 ly. USDA goal is 22.4 mmt vs 27.0 last year. Some estimate final exports at 20.7. Tech speaking, KC weekly chart has support near 7.87. There is an uptrend line of support at 7.15 from Aug, 2020 low. There is a downtrend line resistance from Nov ,2021 high near 8.54.
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