March corn futures finished today's session 1/2 cent higher at $6.83 while March soybeans were 14 cents lower at $15.09 1/2 and March wheat in Chicago was down 2 1/2 cents $7.50.
The strength from the overnight session did not carry over into the start of day trade. Advances in the night session were generated by strong economic indicators and higher consumer demand than expected. Importers are also showing more concern over the delays to the Brazilian soybean harvest with one-month delays to new crop loadings. There are thoughts this will bring the US more export business, but how much is questionable. Brazil soybean values are well below the US and this will make any cancellations very light. To eventually see US sales moved to Brazil origination is very likely once harvest advances. Trade is also less confident it will see heavy Chinese buying following the Lunar New Year break given the price spread between the US and South America and the fact they have been booking imports while on holiday. Weather outlooks for South America turned wetter overnight which also capped daily buying interest. Trade is keeping a close eye on the winter storm moving through the US as it will further disrupt already light case deliveries. Weakness was limited by technical support and thoughts the escalation to fighting in Ukraine may slow exports from that region.
Moderate declines were made in the corn complex early today in response to better crop ratings in Argentina. The Argentine corn crop improved to 12% Good/Excellent but is still below the 31% rating a year ago. This improvement still shows that recent rains benefitted the crop, and more precipitation is on the way. Sources in the country are still projecting a crop that is 8 million metric tons (mmt) under the USDA. Ukraine officials are projecting 2023 corn exports from 6 to 7 mmt well below last year’s 20 mmt. Chinese and Brazilian officials claim corn trade between the two countries will “increase substantially” in the future. Losses were held in check by thoughts the US will still see an increase in export demand as Brazil turns its attention to loading out new crop soybeans which supported the spot contract. Basis values firmed today both internally and in export channels as country movement was slowed by winter weather and export demand perked up during the week. March corn finished the week 6 ¾ cents higher.
Soybeans struggled for much of today’s session as updated forecasts for South America upped rains chances for next week and beyond. The Argentine crop rating improved with this week’s rains and additional improvement is expected. Brazil should also see drier conditions to allow harvest to gain momentum. Trade is still hoping to see some quick ship business out of the Pacific Northwest on current delays to the Brazil harvest. The US already has record unshipped soybean sales on the books which may limit additional sales. Brazil soybean basis is weakening, which is capping US potential, especially with Brazil offers already well below the US. US soybean basis values were firm today on hopes of added demand and light farmer selling. March soybeans gained 3 cents on the week.
Wheat futures were choppy today as debate over global production increased. This is focused on Russia where firms in the country have the crop at 104 mmt while the USDA is holding it at 91 mmt. The USDA is firm on their opinion and does not believe data supports higher crop projections. Regardless, Russia is offering wheat at a sizable discount to the global market which is pressuring values. Importers are also more focused on the record crop out of Australia. US weather forecasts for the Plains are not as cold as earlier in the week but the crop still needs moisture which is keeping risk premium in the market. Ukraine exports are again being questioned as fighting with Russia escalates. India announced today they will be expanding their plantings this year. India also releasing more wheat to cap domestic values for consumers. Wheat basis was mostly steady across the marketplace today. March wheat in Chicago finished the week 8 ½ cents higher.
Trade is closely monitoring US soybean demand. At the present time the US has cumulative soybean exports on the books of 1.71 billion bu. This is a 5% gain on the year and slightly above trade expectations for the year. Of these sales 61% have been done with China. The uncertainty is coming from the unshipped sales which are record high. Given the sharp discount of Brazilian soybeans to the US market this makes the likelihood of cancellations higher. The delay to the start of the Brazil export program is lessening this worry, but not removing it.
The Ukraine firm SovEcon updated the country’s grain production data today. SovEcon has the country’s 2022 corn crop at 26.5 mmt, up slightly from their previous estimate as harvested acres are greater than initially expected. This is still just short of the USDA estimate for a 27 mmt crop. The firm also projected a Ukraine wheat crop of 18.3 mmt for 2023 citing improved weather outlooks for the winter crop, mainly higher rainfall.
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