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Grain Comments 02/15/23
Country movement is again being closely monitored by trade. Cash grain movement has been on the light side ever since the end of last fall’s harvest, although we did see a slight increase on the latest market rally. Movement has again stalled which is starting to become a concern to buyers who were not able to extend their coverage cushion ahead of the upcoming spring planting season. Now spring frost laws are limiting country movement even more. Buyers have tightened their basis values in response to this in several regions of the US in an attempt to encourage as much movement as possible. If farmer movement does not increase it will force more end users to buy commercial inventory which tends to be more expensive which will strain already thinning margins, especially on ethanol. The question now is when the next wave of farm stored inventory will take place, and this may not be until after the spring planting season is complete. A concern with this is that given warming temperatures across the US this can generate quality issues in storage facilities. For today’s session trade will be focused on both the weekly ethanol data and monthly NOPA crush report for indications of domestic demand after the USDA trimmed both uses in the February WASDE report.
Highlights
* US fertilizer values continue to weaken
* US ethanol values +7 cents last week
* DDG values $15 to $20/ton lower
* Next week expected to turn dry in Argentina
* Trade expects ongoing Black Sea exports
* Corridor key in lower world food values
* US farmers starting to focus on spring planting
* Interior basis mostly firm
* May take 5 years to repair Ukraine infrastructure
* ASF spreading in Hong Kong
Corn
* Corn oil values softer
* Delays to Safrinha planting monitored
* US corn demand has improved
* Ukraine corn harvest 93% complete
* Ukraine grain exports -28.7% on the year
Soybeans
* NOPA Jan crush est 181.66 mbu
* Jan oil stocks est 1.91 billion pounds
* Market continues to receive Chinese buying rumors
* Slight improvement to Argentine crop rating
* India YTD veg oil imports +25%
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