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Argentina rains continue to pressure markets

morning market recap.jpg
Afternoon report: Soybeans skid to a nearly two-month low on wetter forecast.

While Jacqueline and Ben are on assignment at the Farm Futures Business Summit, enjoy guest commentary provided by Advance Trading Inc.

Corn

A daily sales announcement of 195k MT of 2022-23 corn sold to Mexico kept corn supported early on, but pressure on soybeans spilled over into corn as well. March corn is down 5 cents, while December ’23 corn settled at $5.95 ¾, down 5.25 cents.

March/May corn spread was at an inverse (March higher than May) of 3.75 cents at one point today, further encouraging producers to have corn sold/hedged nearby.

With Brazil’s export window winding down, spot FOB corn values have gone from a $2 per MT discount to the Gulf to a $7.25 premium.

The Cattle on Feed report will be released tomorrow with trade expectations of Dec. 1 cattle placed on feed at 91% of LY (range 89.0-94.4) and December marketings estimated 94.7% (94.0-96.2).

Soybeans

Beans extend losses from yesterday with Argentina getting more rains than expected and a wetter forecast. March beans ended down nine cents to $15.15 which is near yesterday’s low of the day. November ’23 soybeans are down 9 ½ cents to a nearly 2-month low of $13.64 3/4 – a level we have not seen since before Thanksgiving.

Rising covid outbreaks in China and other countries are pressuring ocean freight values and raising demand concerns.

Unshipped U.S. soybean sales as of Jan. 5 were 542 mbu, up 37% year to year (145 million). Since 2013-14, the other 3 years in which early January O/S were above 500 million, the final export total versus the January estimate increased by an average of 99 million bushels.

Wheat

Chicago wheat is down 8 cents, Kansas City is down 9 cents, and Minneapolis is mixed with nearby months higher and deferred months lower. Good moisture has fallen in the last 24 hours in the Plains states, and another shot is over the weekend.

The BA Grain Exchange is expecting Argentina’s wheat exports to fall over 60% to 5.9 MMT, which is an 8 year low.

China imported 15% more wheat in December as the quantity rose to 1.1 MT, raising it to 10.0 million for 2022, a new high.

Interesting side note: U.S. hay stocks are the lowest as of Dec. 1 in the last 25 years with persisting drought in the southern plain states – even lower than the drought year of 2012.

U.S. all hay stocks

Outside Markets

Dow is down 90 points. Fighting back from bigger losses early on, S&P is down 9, while energies are higher today. Crude oil is just over $80 a barrel, up $1. Natural gas up slightly as well.

Weather

U.S. and Argentina’s weather outlook this morning improved. Rain was near expectations for Argentina yesterday for Cordoba, western BA and northeastern La Pampa. Argentina will see rain this week with the greatest amounts Friday into Saturday, then again early next week.

Southern Brazil has an opportunity to see rain this week. Three weather systems will hit the U.S. Great Plains by mid next week. It starts with precipitation falling across Nebraska into Iowa (yesterday) through Wednesday night, before moving east.

CBOT Settlements Quotes as of 2:58 p.m.

Contact Advance Trading at (800) 747-9021 or visit advance-trading.com.

Information provided may include opinions of the author and is subject to the following disclosures:

The risk of trading futures and options can be substantial. All information, publications, and material used and distributed by Advance Trading Inc. shall be construed as a solicitation. ATI does not maintain an independent research department as defined in CFTC Regulation 1.71. Information obtained from third-party sources is believed to be reliable, but its accuracy is not guaranteed by Advance Trading Inc. Past performance is not necessarily indicative of future results.

The opinions of the author are not necessarily those of Farm Futures or Farm Progress.

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