Grain Comments: 03-02-2023

Good Morning

The grains look to build off lows for the second straight session, aided by rhetoric coming from Russian officials in recent days, who are voicing concerns rather than blindly going along with a Black Sea extension.

January USDA total crush came in above the average 189.6 mbu trade estimate at 191.1 million bushels yesterday, up from 189.4 mbu in Dec but still below 194.3 mbu last January. Corn used for ethanol of 444 mln bu is up from 425 mln last month but below 464 mln a year ago.

U.S. precipitation chances look strong south/southeast today and tomorrow but miss the bulk of the Plains and at least the northwest half of the belt, but extended maps continue to favor the high side of normal precipitation wise. Temperatures remain normal to below-normal right up into the middle of March.

Argentine rains again held north over the past 24 hours and remain there through the weekend, with some better chances in the west during the 6-10 day but most areas staying dry. Brazil saw decent coverage yesterday and plenty more good rains are on tap both through the weekend and into the 6-10.

Once again, trade will be heavily interested in today’s export sales numbers. Demand for US corn, soybeans, and wheat has been light for the past several weeks which is not surprising given current market economics. The most pressure has been on corn where offers from all other exporters have been well below the US. The main one of these is Ukraine which is where many importers have focused their buying, including China. Ukraine and Russia are also offering wheat at a sizable discount to the United States. It is reported that 21% of the grain exports from the Black Sea are destined for China which is reducing chances of US sales. US soybean sales have been better, but these have trailed off in recent weeks as well as more soybeans are coming out of Brazil. These are also at a sharp discount to the US. More demand interest is starting to fall on the new crop months as bookings are very low at this time. There is plenty of time for these sales to increase, but this may be an indicator of a bigger shift in the global market. Importers are now booking as much of their coverage they can from alternative sources and just using the US as a backstop to fill gaps. If this continues it will greatly alter long-term US demand outlooks. Trade will be waiting for confirmation on rumored Chinese corn imports in this morning’s daily sales report.

Have a great day!