Grain Comments: 02-17-2023

Good Morning:

Corn and soybeans have found buyers at the end of a mostly negative week of trade, with Argentina continuing to see the short end of the weather stick, and neither crop willing to give ground into the spring U.S. planting campaign. USDA Ag Forum acreage estimates arrive next week.

Ukraine officials said that negotiations on extending the Black Sea grain ex-port deal will start in a week, as it’s up for renewal again in March after being extended in November. Russian officials have indicated unhappiness with the agreement as of late and are looking for a reduction of some sanctions.

Snow fell in the central and eastern belt yesterday with heavy rains Southeast; the Plains and belt are dry for the weekend before northern chances return early next week into a wet 6-10 day period. Extended forecasts remain cold and wet for the remainder of the month, now right up into early March.

Argentine rains were confined to the far North yesterday and forecasts remain dry, with frost threats in the coming days then heat returning next week; Brazil again saw widespread rains over the past 24 hours, with action continuing center-north going forward, and dryness concerns lingering in the south.

It is quite likely we will see elevated positioning during today’s session which may lead to volatile trade. This is from the markets being closed next Monday for President’s Day. Typically, there is little trade reaction to this market break, but futures have been much more sensitive to any influence this year than those in recent history. The main interest at this time is South American weather and crop sizes. While crops have been trimmed in both Brazil and Argentina this year, total South American production forecasts remain larger than last year. Until we see production estimates decline year to year, market reaction may be less than hoped for. One thing trade will be focused on this weekend will be South American rains or the lack thereof. This is especially the case for Argentina where rains are desperately needed to prevent further crop loss. Recent rains in Argentina have been heavier than expected, but reports from the field indicate they are missing areas of greatest needs. The question this raises is if areas that are getting rainfall will see high enough yields to cover losses in those missing out.

Have a great day!