Grain Comments: 1/19/2023

Grain market action quieted a bit overnight with volume slowing and losses muted; soybeans are looking for direction after surging to highs yesterday and then reversing course, but values remain elevated overall.

Tomorrow afternoon’s USDA Cattle on Feed Report is expected to show all U.S. cattle on feed as of January 1 at 11.652 million head, or 96.8% of last year; December cattle placements are seen at 91.0% of last year while December marketings are estimated at 94.7% of last season.

U.S. precipitation coverage was widespread over the last 24 hours as expected, with snow lingering in the north; action looks lighter in the near-term but extended maps continue to show above-normal precipitation. Temperatures are running below-normal through the rest of Jan and into early Feb.

Argentina was mostly dry yesterday but chances return tomorrow and Saturday, then again later next week; Brazil again saw some rains center-north over the past 24 hours and coverage looks strong through Monday, with 6-10 day maps showing rains for the northeast as well as parched southern regions.

What the United States will see for acreage this coming production season is becoming more of a market topic. Last year US farmers seeded 88.6 million acres of corn as weather was a major issue for spring planting. This total is expected to be much higher this year with some analysts predicting US corn plantings at 94 million acres. While possible, this seems like a stretch. To reach this level the US would need to see very little prevent plant and bring in acres from the reserve program. In the USDA baseline projections US corn acres were predicted at 92 million. This number is more realistic. The main reason some analysts are higher is because that is what the feel the US will need for corn acres to satisfy demand. The uncertainty in this is how much corn demand the US will lose to South America if Brazil’s crop is as large as some predict. Trade is also predicting larger soybean and wheat acres this year. As with corn we need to see hardly any prevent plant to make this a reality. Before long we will start to see more competition in the market for any uncommitted acres ahead of the spring season.

Have a great day!