On The Money Grain Commentary 1-26-23

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Corn Outlook:

The focus in the grains continues to lie with the conflict in the Middle East, harvest progress, weather in South America, and the dysfunction in Washington. While the Middle East does not directly impact the grains, it does affect some of the outside markets. Meanwhile, corn harvest has passed the halfway mark at 59 percent complete, which is on par with a year ago, but ahead of the average of 54 percent. For the moment, exports are a concern as inspections last week were 17.2 MB and must average 41.1 MB each week to reach USDA’s target of 2.025 BB. Currently, the average pace of shipments the past 4 weeks is 20.1 MB, which is below the 5-year average of 23.9 MB for this time of the year. The bottom line in corn is that without a production threat to South America’s crop, there is little to motivate the bulls.

Bean Outlook

Soybean exports have picked up recently, but that is generally the norm as China is most active with their purchases during our harvest. Last week, inspections were a marketing year high at 90.3 MB with China taking 73.8 MB. The average pace of shipments the past 4 weeks has risen to 62.2 MB, which is slightly ahead of the 5-year average of 61.4 MB for this time of the year. However, be aware that exports usually peak in the first or second week of November and decline, on average, 80 percent until the end of the marketing year. Meanwhile, harvest will soon be crossing the finish line as it is 76 percent done compared to 78 percent a year ago and 67 percent for the average. Looking at Brazil, their crop is 30 percent planted versus 37 percent a year ago. Conab currently forecasts their production at 162.0 million tons with the USDA at 163.0 million. However, some analysts think that their crop could be closer to 160.0 million tons. Even with production of this size, it would still be a record.

Wheat Outlook:

Wheat has fallen to the wayside as some of the dry areas in Australia and Argentina have received rain recently. Meanwhile, exports were a sore spot last week with inspections a marketing year low of 6.2 MB. This was well below the average of 13.9 MB that must be shipped weekly to reach USDA’s projection of 700 MB. The pace of shipments the past 4 weeks is 12.0 MB, which is below the 5-year average of 14.6 MB for this time of the year. In other matters, winter wheat planting will be ending shortly, and is 77 percent done versus the average of 78 percent.

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