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Grain Comments: 02-16-2023
The grains continue to retreat from move highs as the week progresses, with Chinese demand for U.S. soybean exports clearly slowing as Brazilian supplies come online. Flash sales have been few and far between and soybean export sales are expected to be weak in this morning’s report (though corn sales estimates are more substantial). The 2023 U.S. acreage battle should keep prices of both from falling too far in the next month-plus.
U.S. radar remains active this morning with snow in NE and IA and rains in the ECB into the Ohio River Valley; action will move out by tomorrow and leave a drier near-term stretch, but extended maps remain safely on the above-normal side going forward. Temperatures are definitely moving into a cold stretch, with 6-10 day maps showing very cold conditions in the northern Plains and NW corn belt, remaining cold throughout for the 11-15 day.
Argentina was mostly dry yesterday save for isolated rains in far western crop areas, with some decent chances in north today and tomorrow but most regions staying dry. 6-10 day maps are still dry throughout. Brazil saw rains east/northeast over the past 24 hours and coverage will fill in through Mon-day, heaviest center-north but will good chances throughout. 6-10 day maps keep precip chances in the central belt, with harvest able to advance in the north but dryness concerns potentially firing back up in the far south.
As always, trade will be focused on this morning’s export sales report. Trade is now tracking our current export sales and where we usually are for this time of year. As of last week’s report, US export sales on corn totaled 1.05 billion bu (bbu). This is 55% of the yearly forecast and below trade expectations. New crop export sales on corn currently total 56.7 million bu (mbu) which is low but in line with where we were last year at this time. Soybean sales for this marketing year currently total 1.75 bbu which is 88% of the yearly forecast and a high volume. New crop sales total just 33 mbu though and are 80% less than a year ago. Hard red wheat export sales are 75% of their yearly forecast and soft red sales at 81.5%. The obvious question surrounding these numbers is if they are too high, or too low. Trade seems more confident that overall demand for Us offers will start to increase as crop estimates out of South America continue to be trimmed. This is especially the case on corn and is why that grain has started to perk up in recent session. Uncertainty over Black Sea exports is also favoring the US for now.
Have a great day!
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