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Grain Comments: 1/18/2023

Good Morning:

Old-crop soybeans continue to lead the charge post-USDA, with the bulls noting decent inspections, flash sales, and active foreign buyers especially after the USDA cut export estimates (for corn as well) last week.

Yesterday’s NOPA December soybean crush came in at 177.5 million bushels, below the 182.9 mbu trade estimate and 186.4 mbu last December, but above 179.2 mbu in November. Estimates ranged from 174.4-188.0 mbu.

U.S. precip coverage looks strong today with rains in the south and snow in the west this morning; forecast maps remain wet (and cold) going forward.

Argentina saw western rains yesterday and coverage looks solid through the weekend, with a wetter 6-10 day today as well. Brazil saw good 24-hour rain amounts center-north and ten-day forecasts are normal-to-above as well.

Demand remains the leading fundamental factor in the market at this time. The most interest is on China where imports remain slow and not up to early estimates. This is especially true on corn where Ukraine and Brazil are making larger than predicted exports and while slowing, are still high. Brazil is now projected to export 5 million metric tons of corn this month, well above last year’s total. This is down from December but gives the indication the country could be making exports until their new crop bushels are ready for shipment. Ukraine also continues to export large volumes of corn, but as with Brazil, this pace is slowing as well. The combination of these exports is further narrowing the window for US exports. Soybean demand is also raising some market questions as sales have slowed in recent weeks but still remain well above the volume needed to reach yearly projections. This is generating ideas US sales may not fall as much as projected when the South American export season starts. Given these outlooks, the USDA may still be over-estimating US corn demand and under-estimating soybean demand. Just as much uncertainty on demand is on the domestic side where ethanol consumption has been erratic in recent weeks, but crush remains elevated.

Have a great day!

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