Ag Market View for Jan 30.23
The entire soybean complex was higher with soybeans up $.16 – $.26, soybean meal up $10 – $15, and soybean oil up 50 – 70. Today’s high in Mch-23 soybeans at $15.38 is $.60 above last week’s low. Next resistance is the January high of $15.48 ½. Nearby soybean meal carved out new contract highs. Spot Mch-23 is close to filling a gap on the weekly bar chart at $492.20, vs. today’s high of $490.30. China has reported bought up to 100k tons mt of Argentine soybean oil for spring shipment. There were no new announced sales from the USDA this AM. Export inspections at 68 mil. bu. were above expectations. 52 mil. bu. were destined for China. Brazilian soybean harvest progress reports are coming in around 4%-6% as of late last week, behind the 11% pace from YA. Friday’s CFTC report showed Money Managers were healthy sellers in the soybean complex in the week ended last Tues. Jan. 24th. Long liquidation totaled just over 55,000 contracts. MM’s likely reversed course being large buyers Wed. thru Fri. of last week, carrying over the buying into this week. Brazilian soybean prices have slipped to 13 month lows at the Port of Paranagua. The USDA will release its Dec-22 census crush report tomorrow at 2 pm CST. Expectations are between 187 – 188.6 mil. bu., down from 189.4 crushed in Nov-22 and well below the 198 mil. bu. in Dec-21. Soybean oil stocks are expected to rise to 2.249 bil. lbs., up from 2.108 bil. in Nov-22, however below the 2.466 bil. in Dec-21. US stock are tight, however US export demand will fall dramatically Feb-23 forward as it always does with the arrival of Brazilian harvest.
Prices closed steady to $.03 higher in sympathy with the higher soybean complex. While two soaking rain events have provided short-term relief to drought stricken areas of Argentina, forecasts are leaning dryer by the end of this week. The next rain event slated for the middle part of this week are expected across Western and southern parts of Argentina, away from the larger producing areas. Central areas of Brazil are still wetter than farmers would prefer, slowing soybean harvest progress and in turn the planting of the 2nd corn crop. China is back this week from their Lunar New Year’s Holiday celebration. Markets will be sensitive to any breaking demand news. Chart resistance for spot Mch-23 is at $6.88 ¾, just above today’s high of $6.87 ¼. The USDA announced the sale of 112k tons (4.5 mil. bu.) of corn to Japan. Export inspections at only 21 mil. bu. were below expectations and well below the 47 mil. bu. needed per week to reach the USDA export forecast. Egypt announced a 2nd corn tender for shipment late Feb. into early March. Late Fri. IMEA estimated corn plantings in Mato Grosso at only 6%, well behind the average of nearly 18%. Ukraine’s corn harvest has reached 90%, with total volume est. at 25.2 mt, vs. USDA production forecast of 27 mt. Total grain exports from Ukraine since July-22 have reached 26.3 mt, down 31% from YA. Their corn exports stand at 14.9 mt. The USDA monthly corn grind for ethanol production from Dec-22 is tomorrow at 2 pm CST. Look for a slightly lower corn usage figure than the 447 mil. bu. of corn consumed in Nov-22. Look for US exports to seasonally improve in the late winter and Spring months as Brazil is largely away until their 2nd crop harvest starting in June. The US export pace will need to improve just to reach the current USDA forecast of 1.925 bil. bu.
Prices finished with slight gains in all 3 classes in a two sided trading session. KC closed $.04 – $.06 higher, Chicago was up $.02 – $.03, while MGEX was steady to up $.03. The 50 day MA at $7.63 capped the rally in Mch-23 Chicago. Export inspections at 16 mil. bu. were in line with expectations and just above the 15 mil. bu. needed per week to reach the USDA export forecast. Ukraine’s wheat exports since July have reached 9.4 mt, vs. the USDA forecast of 13 mt for the entire July/June MY. While conditions remain dry across the US Southern plains this week, this afternoon’s NWS 6-10 forecast shows above normal precipitation across the entire winter wheat belt.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.