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Grain Comments: 03-03-2023

Good Morning

Overnight volume indicates that the grains are ready to limp into the end of the week, but beans and meal remain the buoys, as feed grain demand suffers, and the trade expects stocks increases there next Wednesday.

Rains are heavy in the south this morning as expected, having skipped most of the Plains and moving into the SE belt today; some snow in seen in the north across the weekend into early next week. 6-10 day maps remain wet with 11-15 day forecasts more varied, but cold lingers up into mid-March.

Argentina will see some rain chances early next week, but conditions remain dry for the bulk of their belt overall. Brazil once again saw scattered rains throughout yesterday, wet through the weekend and right up into the 6-10 day.

We are starting to see shifts in market focus. One of these is more interest on US weather outlooks as we approach the spring planting season. At the present time many regions of the Corn Belt are reporting higher soil moisture levels than a year ago. Some areas are starting to report excess moisture which could end up impacting acreage if they persist for the next few weeks. As more attention is placed on spring planting, less is given to marketing old crop inventory. Historically this tends to support interior basis values as deliveries of farm stored inventory declines. This year will likely be no different, but how much basis improvement we see may be less than in recent years. One reason for this is that processing margins have been under pressure in recent weeks which is impacting what a buyer can pay. Another is that many buyers have been aggressive on their origination in recent months and feel they have adequate coverage. Reports from the country also indicate farmer sales are already at 80% of last year’s crops and pushing bids may not elevate movement. There are still likely going to be windows of opportunity to extend sales over the spring planting season. Trade will continue to wait for clarification of Chinese buying speculation today. The question now is if this will be a case of “Buy the rumor, Sell the fact.”

Have a great day!

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