Written Commentary
SOYBEANS
Soybean and soymeal traded higher on talk of drier and warmer weather over 40 pct of South America soybean crop areas. Firm US cash soybean basis also offered support. Soyoil ended lower due to drop in energy prices and concern spread of Omicron virus could reduce food and fuel demand. Weekly US soybean exports were 61 mil bu vs 105 last year. This was near the lower end of trade estimates. Season to date exports are 997 mil bu vs 1,292 last year. USDA goal is 2,050 vs 2,265 last year. Some feel final exports could be 50 mil bu lower. One group also estimates final US 2021 soybean crop 50 mil bu higher. Their US carryout is 450 vs USDA 340. Another group though still looks for US 2021/22 carryout near 355. Key will be final US 2021 crop size and 2022 yield.
CORN
Corn futures ended lower. Like most Covid sensitive markets corn saw some long liquidation. Corn also followed energy prices lower. Grain markets have been volatile over the last 24 hours. Last nights opening calls were higher on follow through buying from Friday and talk of dry South America weather forecast. US cash corn basis remain firm supported by positive corn processing margins. Markets though opened lower and traded lower on lack of follow through fund buying and concern the spread of the Omicron virus would slow demand for fuel and feed. Weekly US corn exports were 39 mil bu vs 30 last year. This was on the high side of trade estimates. Season to date exports are 445 mil bu vs 506 last year. USDA goal is 2,500 vs 2,753 last year. Talk of lower Brazil and Argentina crops could suggest higher demand for US corn. One group estimates final US 2021 corn crop 250 mil bu higher but also has demand up 275. Another group does not see the increase in US 2021 crop and has a 2021/22 carryout closer to 1,330. They also could see US 2022 corn crop near 15,300 mil bu and demand near 15,100, This suggest a 2022/23 corn carryout near 1,575 vs USDA 1,816. This leaves little room for either continued South America weather concerns or warm and dry US 2022 weather.
WHEAT
Wheat futures ended mixed. Chicago and KC wheat ended higher on talk that RMA crop insurance winter wheat acres could be down 1-2 million acres from last year versus most estimates that acres would increase 1-2 million acres. Minneapolis wheat ended lower on concern over lower food demand. Oat futures were also sharply lower. Weekly US wheat exports were 7 mil bu vs 14 last year. Season to date exports are 427 vs 519. Key to wheat prices will be 2022 north hemisphere weather. One analyst estimates that US 2021/22 wheat exports will drop 50 mil bu and estimates US 2021/22 carryout near 680 vs USDA 598. Contrary to the RMA data, they also look for all wheat US 2022 acres up 2 million from last year and US 2022/23 wheat carryout near 900 vs USDA 636. China continues to buy Australia milling and feed wheat.
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