Click here to listen to this week’s call:
Condensed Overview:
Corn
Price & Spreads
- Corn up 8¾¢ on the week; spreads (March–May, May–July) narrowed.
- Early hopes for bigger March–May carry faded; offers stacked ~14–15¢.
USDA & Policy
- Domestic ending stocks unchanged at 1.54 billion (10.2% stocks-to-use).
- Global stocks down 3 MMT (mainly Argentina/Brazil).
- Possible policy shifts under new administration; ag tariffs remain a concern.
South American Production
- Brazil: Conab raised total corn to 122 MMT (was 119.6). Safrinha planting delays eased.
- Argentina: USDA trimmed production by 1 MMT.
Cash Markets & Farmer Selling
- Export inspections ~1.3 MMT; flash sales to unknown + Colombia.
- Basis in river/eastern markets mostly steady; western basis firmer due to freight issues.
- Farmer ~75–80% sold; recent sales slowed, likely to pick up again after planting or on higher prices.
Soy-Corn Ratio & Outlook
- Ratio at 2.09, favoring corn acreage.
- Possible 95+ million corn acres in upcoming USDA Outlook.
- A 95M-acre scenario plus near-trend yields could push 2023–24 ending stocks above 2.1 billion bushels (14% stocks-to-use).
Soybean Complex
Price Action
- March beans -13½¢ (10.36), November -5½¢ (10.52), meal down ~$5.50, oil slightly higher.
- Board crush improved on weaker beans + firm oil.
USDA & Other Estimates
- No changes for U.S. beans in WASDE; world stocks lowered on Argentine cut (49 MMT).
- Brazil unchanged at 169 MMT; Conab at 166 MMT. Some private estimates push 170–175.
Harvest & Exports
- Brazil ~15% harvested, behind normal but accelerating.
- U.S. export inspections strong; pace 24% over last year, matching USDA’s +20% target.
Cash Basis & Crush
- Processor basis modestly firmer; farmer sales still light.
- NOPA crush on Tuesday; soybean oil stock levels under scrutiny for biodiesel/renewable demand.
Acreage Scenario
- If corn hits 95M acres (with total corn/bean near 177M), beans might slip to ~82M.
- A 52 bu/acre yield yields ~336M bushel carryout (~8.3% stocks-to-use), keeping soybean supplies manageable if demand holds.
Wheat
Price & Technicals
- Third consecutive weekly gain: Chicago +22¼¢, KC +23¢, Minneapolis +16¾¢.
- Possible winterkill, short-covering, weaker USD all supportive.
- Chicago wheat tested 200-day moving average (~$6.01).
Fundamentals & Weather
- US Plains: Extreme cold next week; some areas lack snow cover.
- Black Sea: Dry, cold forecast; limited protection for wheat.
- France G/E ratings fell to 73% (vs. 86%). India remains hot/dry during fill.
USDA Data & Exports
- World stocks trimmed 1.3 MMT (tightest since 2016).
- Export inspections at 19-week high; however, sales pace lags.
- Russia/Ukraine export estimates cut further; some argue Russia still overstated.
Potential Headwinds
- Australia’s crop keeps growing (WA estimate up to 12.45 MMT).
- Peace talks in Russia/Ukraine could unlock 10–15 MMT more production long-term.
- China feed demand remains soft (lower import estimates).
Outlook
- Wheat’s premium over corn recovering (~$1.04 vs. historical $1.40).
- Closing near technical resistance; further moves may depend on weather forecasts and fund short-covering.
Market Schedule
- Markets closed Sunday night/Monday for Presidents Day, reopening Monday evening.
- Government reports delayed a day.
Final Takeaway
Across all three commodities, the near-term outlook is shaped by weather uncertainties, shifting acreage prospects, and continued global policy risks. While corn finds support from strong demand and a tightening global picture, the market is wary of potentially large U.S. planted acres. Soybeans remain underpinned by robust crush margins and Brazilian harvest progress, but acreage shifts and the Argentina crop story are pivotal. Wheat is drawing strength from winterkill concerns, tightening global stocks, and fund short-covering—although expanded Australian production and potential Russia-Ukraine peace developments could weigh on prices. Overall, markets are bracing for acreage estimates and further policy signals, keeping volatility elevated in the weeks ahead.
Back