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Grain Comments: 1/10/2023

Good Morning:

The grains look unwilling to challenge any type of resistance ahead of Thursday’s key USDA data dump, with corn and soybeans holding below technical and psychological levels and wheat willing to re-test lows. Export paces range from shaky to disastrous, and the trade is looking for steady-to-bearish corn and soybean supply-side changes this month as well.

U.S. precipitation will be confined south and east mid-week this week, with extended maps still active; above-normal temps hold for the next two weeks.

Argentine chances will remain far northeast this week and far southwest for the 6-10 day, with most areas staying hot and dry; Brazilian rains again fell in the northeast over the past 24 hours but action moves into the heart of crop areas through Saturday, with dryness concerns remaining in the south.

Demand on a whole is more of a determining factor in daily price discovery. This has long been a topic in corn where export sales remain well below expectations. The US has been pressured all marketing year from Brazilian sales of their record crop that was harvested last year. While Brazil has now pulled its corn offers until their new crop harvest takes place, many buyers likely have enough coverage to bridge the gap until these bushels are available. The most watched of these is China who was the recipient of 20% of the corn Brazil exported in December. Between this and ongoing corn exports from Ukraine there is little need for US corn at the present time. Even if the US does see sales perk up, they will likely still fall short of current USDA expectations. Not only is export interest diminishing on corn, but so is domestic usage, mainly on ethanol. We are also seeing lackluster demand on wheat, both domestically and globally. We have also seen a decrease in soybean demand although this was fully expected with the start of the Brazilian harvest. Soybean sales are still above the volume need to reach yearly projections which is tempering this decline. Soybean loadings are a concern though and may still lead to an increase in ending stocks in future WASDE reports.

Have a great day!

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