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Grain Comments: 02/07/2023

Soybeans continue to oscillate, below recent move highs but still above technical support, with a tight overall S&D allowing the bulls to hold serve heading into tomorrow’s February USDA S&D report. South American forecasts are still giving that side enough narrative as well, with Argentina still hot and dry and enough Brazilian rains to slow harvest and stem the flow of soybeans from an expected record crop. Corn values are wound up even tighter in recent sessions, holding tenuously above chart sup-port with traders looking for a minor increase in carryout tomorrow.

Light rains have fired up in the southern U.S. and move through the southern and eastern Midwest today through Thursday, with the Plains and the bulk of the belt dry in the near-term. The 6-10 day forecast remains wet, with 11-15 day maps varied but split into a wet north and dry south. Temperatures will peak in the 6-10 day period but move back towards normal now for the 11-15.

Argentina remains dry near-term save for some light chances tomorrow and again this weekend, as well as in the 6-10 day time frame; none of those chances appear to be major events or improvements to a dry overall pattern. Brazilian rains were confined far north over the past 24 hours, heaviest in the center-north through Saturday, then shifting south for the 6-10 day time frame. Those rains next week should help with dryness concerns in RGDS.

While the United States has seen a build in export demand on corn in recent weeks it is still questionable if we will meet current USDA yearly projections. It was thought the United States would be the main source of corn for the global market by now, but this has not happened. This is mainly from the fact the US competitors in the global market have continued to make sales and shipments of product. The main one of these is Brazil who exported 6 million metric tons of corn in January and is expected to load out another 2.4 million metric tons this month. Analysts had though Brazil would have depleted their corn inventory by now. This export pace gives trade the indication that last year’s corn inventory in Brazil was larger than believed. Another corn supplier that continues to make exports is Ukraine. Weather has favored harvest activity in Ukraine, allowing farmers to get more of their corn crop out of the fields. Much of this corn has made its way into the European Union. In fact, the EU has received so much Ukraine grain that it is hurting domestic values. The United States will still see better demand for its corn offers in the near future, but the window for sales has definitely shrunk.

Have a great day!

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