Written Commentary
SOYBEANS
Soybeans traded sharply higher. Some link the buying to photos from RGDS south Brazil showing soybean fields being mowed down. One group recently toured Brazil crop areas and estimated Brazil soybean crop at 124 mmt vs USDA 139. This assumes that the weather pattern is changing and south Brazil should begin to see normal rains. Same group estimates that South America soybean crop losses could reach 40 mmt. Informa estimated US 2022 soybean acres at 87.8 million versus 87.2 last year. There 2022 soybean crop is 4,520 mil bu vs 4,435 last year. They have been using a US 2021/22 carryout of 310 due to higher crush. Informa estimates World 2022/23 soybean production neat 396 mmt vs 368 this year. US 124 vs 120 and Brazil 147 vs 137. US soybean export sales are est at 500-1,300 mt.
CORN
Corn futures have traded higher. Talk of lower South America supplies and concern over Black Sea corn exports offered support. Increase US farmer selling offers resistance. One crop group estimates that South America corn crop losses could reach 20 mmt. Informa estimated US 2022 corn acres at 91.5 million versus 93.3 last year. There 2022 corn crop is 14,999 mil bu vs 15,115 last year. This assume a yield of 179.5 bpa vs 177.0 last year. They have been using a US 2021/22 carryout of 1,200 due to higher ethanol and export demand. Weekly US ethanol stocks were higher than expected. Covid reducing driving miles? US corn export sales are estimated at 600-1,200 mt. There remains concern about Ukraine exports if Russia invades. Fact the Putin will be at China Winter Olympics opening ceremony suggest an invasion is not imminent. In 2014 at Sochi Olympics Russia did not invade Crimea after the Olympics. Informa estimates World 2022/24 corn production at 1,222 mmt vs 1,204 this year. US 380 vs 384, Brazil 128 vs 116. Argentina 54 vs 50. FSU 62 vs 63 and 49 last year. EU 70 vs 70. China 274 versus 272.
WHEAT
Wheat futures ended sharply lower. Risk on risk off. Funds have covered their Chicago short. Now what? Reduced concern about Russia invading Ukraine is weighing on wheat. US equities turned lower after US Central Bank said they were more focused on the US economy than financial markets. US Dollar also turned sharply higher. Informa estimated US 2022 wheat acres at 48.1 million versus 46.7 last year. Winter wheat acres were 34.4 versus 33.6 ly. Spring acres are 12.7 vs 11.4. There 2022 wheat crop is 2,026 mil bu vs 1,646 last year. US winter wheat crop 1,381 mil bu vs 1,277. Spring 607 vs 331. Key is US spring and summer weather. Earlier this week USDA dropped US HRW crop rating below Jan 3 estimate and last year. This helped rally KWH to 8.49. Covid and inflation may be reducing US consumer food buying. There is also concern that Covid and strict vaccine mandates may be lower US workforce.
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