Written Commentary
SOYBEANS
Soybean traded higher. SH ended near 15.45 but tested a high near 15.64 On one 3,000 contract buy order. USDA announced 380 mt US soybeans was sold to unknown. Some feel this could be China for March. China remains on holiday but new US soybean sales suggest they may be worried about South America crop losses and fact they have not bought enough imports for 2022 or FH 2023. Some in the trade are estimating that final South America soybean crop could be down 21 mmt or 770 mil bu from USDA December estimate. This could increase demand for US soybeans. One analyst lowered his estimate of US 2021/22 soybean carryout to 120. Weekly US soybean export sales are est near 600-1,200 mt vs 1,025 last week.
CORN
Corn futures ended sharply lower. Large increase in US ethanol stocks and drop in margins triggered new selling. Higher stocks could suggest slowdown in demand and could suggest a need to lower production. Bull supply market need to be fed daily. Sell stops were hit below 6.24 CH. Weekly US export sales are est near 600-1,300 mt vs 1,402 last week. World supplies are in a decline which is still bullish corn futures. There is talk that La Nina could dry out parts of Argentina, S Brazil and Paraguay. There were some estimates that Argentina corn crop could be 44 mmt versus USDA 54. Most look for USDA to drop the Brazil corn crop to 113 mmt versus their December estimate of 115. A few could even see USDA increase Brazil crop due to higher acres and hope for better 2nd crop weather. A few crop watchers though feel the final crop could be 106 mmt. There is talk that Brazil stocks including 1st crop could be 25 mmt versus USDA estimate of 34 mmt. This suggest to some that Brazil could be low on supplies before the second crop harvest. Most still look for US corn demand to increase 500 mil bu and drop final US 2021/22 carryout to 1,100. That should be friendly old/new corn spreads and futures. After the close. USDA China Ag attaché raised China corn production and lowered total corn imports to 20 mmt versus 26 previous.
WHEAT
Wheat futures ended lower. Wheat futures may be following the drop in corn. There continues to be a problem with US export prices a premium to EU and Black Sea. Some moisture across US HRW south plains triggered new selling. Most weather watchers do not see a pattern change and are still looking for US February south plains weather to be drier and warmer than normal. Weekly US wheat export sales are est near 200-675 mt vs 676 last week. KWH hit sell stops at 7.76. Wheat bulls still looking for buying due to Russia/Ukraine conflict and talk of drier weather in pats of SW EU, NW Africa, parts of NW Russia and SW US HRW areas. Bulls also look at lower EU and Russia export trade and higher N Africa, Asia and Middle East wheat demand as supportive. Fact US export pace is below level to reach USDA goal and managed traders are using a wheat short to hedge against long corn and soybean futures offers resistance.
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