Friday, February 3, 2023
Closing Markets: Corn +2. Beans -2. Wheat -4.
TFG WILL BE HOSTING THREE FOCUS MEETINGS ON THURSDAY FEBRUARY 9TH. THE FIRST MEETING WILL BE 8AM AT THE BEMENT LIONS CLUB BREAKFAST WITH MEETING TO FOLLOW. THE SECOND WILL BE AT THE LINCOLN OASIS SENIOR CENTER AT 12PM LUNCH WITH MEETING TO FOLLOW. OUR FINAL MEETING WILL BE 4PM AT THE FORSYTH COMMUNITY ROOM WITH MEETING AND DINNER TO FOLLOW. PLEASE LET YOUR TFG ORIGINATOR KNOW IF YOU PLAN ON ATTENDING SO WE CAN HAVE AN ACCURATE COUNT. THANK YOU!
MONTICELLO WILL BE OFFERING FREE DP ON CORN HAULED FROM THE BIN FROM 2/1/23-3/31/23.
Market Recap:
South American weather remains the driving force behind any sort of price direction. Brazilian weather models indicate heavier rains for central and northern crop areas delaying soybean harvest and corn planting and southern crop areas are drier. Argentina received some beneficial rains over the last 10 days improving crop conditions, but the next 10 days turn drier with warming temps. Many traders will use the next couple of session shoring up positions before the USDA’s next WASDE report. Next week’s report should give traders a clearer picture for how South American crop situation is progressing. Many traders are expecting to see further reductions made to corn and soybean in Argentina while others are predicting the WASDE will show higher corn and soybean production for Brazil.
Corn futures struggled to find price direction as trade was two-sided for much of today’s session. The national average corn basis remains at its strongest level in over 20 years but trade has been light for much of the week. The Buenos Aires Exchange increased its G/E rating for Argentinian corn from 12% to 22% due to recent rains. Rain will move out of the region and temperatures will start to climb over the next 10 days. On the flip side, central and northern Brazil remains saturated slowing safrinha corn planting progress potentially extending U.S. export program.
Soybean futures clawed their way back near the end of today’s session closing 8 cents off their lows. Early weakness was driven by improved Argentinian soybean crop ratings as the Buenos Aires Exchange reported soybean conditions increased 5 points to 12% G/E. Rumors were also circulating news wires that 1 MMT of Brazilian soybeans were sold to Argentina to help compensate for their shortfall. Some analysts are estimate that Argentina will import nearly 2 MMT of soybeans from Brazil in 2023. The most soybeans Brazil exported to Argentina was 657,000 MT in 2018. Throughout the session, traders turned their attention to 10-day weather models where conditions in Argentina look to turn hot and dry supporting domestic prices. In the short-term, soybean prices are being supported by delayed Brazilian harvest as heavy rains are being forecasted for central and northern Brazil.
Wheat futures were under light pressure for much of today’s session due to lack of interest. Agriculture consultancy, IKAR, has cut its forecast for Russia’s 2023 wheat harvest to 84 MMT, down from 87 MMT previously pulling wheat futures off their lows. Analysts have started pairing back Russian wheat output this week due to poor weather conditions. Another firmed lowered its forecast for 2023 by 1 MMT to 81.5 MMT. According to the ag ministry, Russia may harvest 80-85 MMT of wheat in 2023 compared to 104 MMT of wheat in 2022. There remains a large discrepancy if Russia is including conflict areas in their overall production output. Ukrainian farmers have completed 2022 wheat harvest threshing 20.2 MMT of wheat. Ukraine sowed more than 6 million hectares of winter wheat in 2022 but a large area was occupied after Russia’s invasion and only 4.9 million hectares were harvested. Turkish Foreign Minister stated today that Turkey expects the grain corridor will not only be extended but for a longer period. The current agreement is set to expire on March 19th.
The U.S. military has been monitoring a suspected Chinese spy balloon that has been hovering over the state of Montana. Military and defense leaders have been monitoring the surveillance balloon the past few days and some leaders have discussed shooting it out of the sky. Chinas Foreign Ministry confirmed that it is Chinese but said it is a weather balloon that had deviated from its planned course. However, U.S. government officials pushed back on this assertion, saying they are confident it is being used for surveillance as it continues to travel eastward and can maneuver.
Wet weather in Brazil this year has increased cases of soy rust on soybean crops. Famers were required to boost pesticide applications, raising their fungicide bills by 10%. Nearly 160 cases of the disease has been reported during the 2022/23 season versus 144 cases last week, and up from 88 at the same time last year. Despite more cases of the disease, Brazil’s soybean output is still projected to be record large.
World food prices fell in January for the 10th straight month, and down nearly 18% from its peak in March of 2022 following the Russian invasion of Ukraine. The FAO, which tracks the most globally traded food commodities, averaged 131.2 points last month against 132.2 in December and the lowest reading since September 2021. Falling prices in vegetable oils, dairy and sugar helped pull down the index while cereals and meat remained the same.
Ukrainian farmers have harvested 53.2 million tonnes of grain from 97% of the expected area. Farmers have completed wheat and barley harvests, threshing 20.2 MMT and 5.8 MMT respectively. Corn harvest is said to be 91% complete totaling 25.9 MMT as of February 2nd. The government said Ukraine’s 2022 crop harvest could total about 51 MMT once dried and cleaned, down from a record 86 MMT in 2021. The ministry said Ukraine’s grain harvest may decrease again in 2023 to 49.5 MMT because of the loss of land to Russian forces and lower yields.
Have a great evening!
Chelsey White
Emery Manager & Originator:: Topflight Grain Cooperative, Inc.
593 Emery Rd :: Maroa, IL 61756
Phone:: 217-794-2240
E-Mail:: cwhite@tfgrain.com
Web:: www.topflightgrain.com
This material should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any trading strategy, promotional element or quality of service provided by Topflight Grain Cooperative, Inc. Topflight Grain is not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable but is not guaranteed as to its accuracy. Contact Topflight Grains designated personnel for specific trading advice to meet your trading preferences. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by Topflight Grain Cooperative, Inc.
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