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Grain Comments: 02-22-2023

Good Morning

Soybeans dominated trade volume overnight with an initial move higher (just a couple cents short of last week’s highs) followed by a wave of profit-taking into the morning hours. Weather situations remain un-changed and the trade is interested in Ag Forum acreage figures tomorrow.

Ukraine is seeking a one-year extension to the Black Sea grain export agreement when they resume talks with Turkey and the United Nations, though the exact date of said discussions is not yet set; they are also looking for increase the number of inspections teams at the checkpoint to eliminate delays.

Friday afternoon’s USDA Cattle on Feed Report is expected to show all U.S. cattle on feed as of February 1 at 11.772 million head, or 96.5% of last year; January placements are seen at 97.1% of last year, while January marketings are estimated at 103.9% of last season.

A Bloomberg survey of “as many as” 24 analysts sees the USDA estimating 2023 corn acreage at 90.9 million acres in this week’s Ag Forum, with aver-age production at 14.888 billion bushels and carryout at 1.761 bln bu. Soy-bean plantings are seen at 88.6 mln ac with output at 4.510 bln bu and carryout at 297 mln bu, with all-wheat plantings at 48.5 mln ac, production at 1.882 bln bu, and ending stocks at 646 mln bu for 2023/24.

U.S. radar is active this morning with snow north and rain and mixed precipitation south/southeast; forecasts are active as well with heavy amounts expected through tomorrow, then again Sunday (heavier towards the Plains this time) while above-normal precipitation remains for the 6-10 and 11-15 day maps as well. Temps continue to run cooler west/northwest and warmer east/southeast.

Argentine forecasts remain dry save for some far northern rain chances during the 6-10 day; Brazil saw rain again center/northeast yesterday with good coverage seen through Sunday, and rains shifting center-south for the 6-10 day.

Even with weather related issues in some regions of the country, the Brazilian soybean harvest is progressing. It is now believed that 25% of the Brazilian soybean crop has been harvested and is making its way into the export channel. It is no surprise that these soybeans are being offered at a sizable discount to the US with the price spread reaching $1.10 per bushel between the two sources. As a result, Brazil already has 14 million metric tons of soybeans in the export line up. We are starting to see some push back from Brazilian farmers on future sales though, which is being closely monitored by the US exporters. Brazil farmers have slowed their soybean selling as values in the country continue to fall, and for the first time in over a year, soybean export values have turned negative. This is in part from the record yields that are pressuring basis and cash bids, but also from currency valuations. The softer US dollar has made the selling of new crop soybeans even less attractive. Importers are not showing as much concern over this slow selling though as they believe once the initial flush of new crop soybeans work through the system values will rebound and farm sales will return. Any hint of prolonged disruptions may bring the US additional export business, however.

Have a great day!

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