|
Today was the 2nd worst start to a New year on CME wheat in history. March corn made a new contract low at 4.62 1/2. Turn around Tuesday has been common the last few weeks, so we will see if that theme continues tomorrow. (since today is our "Monday")
StoneX Brazil projects that this year's soybean crop will total 152.8 million metric tons, following its latest customer survey, down from 161.9 mmt the previous month due to adverse weather through the period. Total corn production is pegged at 124.56 mmt, down from 126.02 mmt previously.
Rainfall has been very much below normal across much of Center-West and northeast Brazil for much of the growing season, while extremely wet in southern Brazil. The wet weather in southern areas has not notably hurt yields thus far, with a drier pattern now set in for the time being. Lower yields in Center-West and northeast Brazil were partially offset by an increase in soybean area planted across Brazil.
But soybean futures barely responded to today's StoneX Brazil cut, due to the lack of impact on U.S. exports that would justify rationing U.S. supplies with higher prices, as shown below. Brazil's weather problems have not yet threatened tight U.S. stocks, because buyers have not yet seen the need to increase imports of U.S. soybeans to compensate for a "short" Brazil crop. Part of the reason for that has been expectations for the Argentine crop to nearly double this year to close to 50 mmt, while increased production is also expected in Paraguay and Uruguay. Combined, we could see exports from these countries increase by nearly 20 mmt. It's still early, so that could change, but that's what the market is currently focused on.
Argentina's grain belt in 2023 had its wettest December since 2009, receiving 2.5x more rain than in Dec 2022. Nov-Dec rainfall was 33% above average.
As of last week, only 1% of corn and 3% of soybeans were in bad health vs 27% and 30% a year ago, respectively.
Ahead of next week's WASDE report, we will expect to see more private estimates hit the airwaves. Today, South American crop consultant Dr. Michael Cordonnier cut his Brazilian soybean production forecast by 2 MMT to 151 MMT, citing low yields on early harvested soybeans. The USDA is currently at 129 MMT for Brazilian corn and 161 for Brazilian beans.
Export inspections were not anything to write home about today. Marketing year to date soybean export inspections fall short of the seasonal pace needed to hit USDA's target by 36 million bushels, versus being short by 26 million bushels the previous week. Marketing year to date corn export inspections fall short of the seasonal pace needed to hit USDA's target by 5 million bushels, versus being short by 3 million the previous week. Marketing year to date wheat export inspections fall short of the seasonal pace needed to hit USDA's target by 59 million bushels, versus being short by 61 million bushels the previous week.
Funds were thought to have been all sellers today.
| 
