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Grain Comments: 1/17/2023

Good Morning:

Soybeans are looking to break a three-day winning streak around last week’s USDA report date; the bears are hoping for much-needed rains in Argentina this week, while a potential record Brazilian crop ensures little to no dip in supplies coming from South America (and heading to China).

This morning’s NOPA December soybean crush is expected to come in at 182.9 million bushels, up from 179.2 mbu in November but below 186.4 mbu in December 2021. Trade estimates range from 174.4-188.0 million bushels.

Rains fell in the northeastern half of the Midwest over the holiday weekend, with decent coverage on tap this work week as well (lightest in the far northern and far southern Plains); precip remains normal-to-above going forward. Temp forecasts flipped over the weekend, now cool into the end of January.

Argentina was dry over the weekend but chances are present through Saturday, with good rains expected for the heart of the belt. Impressive rains fell across Brazil over the weekend, with wet maps for the next ten days as well.

Now that the January USDA reports are behind us trade will shift its attention elsewhere for price discovery. The main focus of the market will now be on South American production. We are already seeing harvest of both corn and soybeans in Brazil, and progress is now at a point where we will start to receive better yield data. Weather in South America remains a key factor as even with harvest, planting is just wrapping up. This can easily cause production estimates to move in either direction. Before long we will start to see more attention on the upcoming planting season in the United States. The official planting figures from the USDA will be released at the end of March, but privates will release their data ahead of this. We will also see the data from the Ag Outlook Forum that will give us our first look at balance sheets projections. The United States cannot afford to lose production of any crop next year and this will put more emphasis on this year’s plantings. Demand will become more of a market focus, especially if we see any business from China. There remains thoughts China will be a US corn buyer this spring, but this demand will need to surface soon to support futures.

Have a great day!

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