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The page on the calendar has turned to 2023 which means that the focus in the grains will be on next week’s USDA final crop report estimate for 2022, crop conditions in South America, and spring planting intentions. The crop is mostly favorable in Brazil, but there are concerns of dryness in Argentina. Meanwhile, expectations are that there will be an increase in planted acres of corn over soybeans this spring. However, with the increased market volatility that could change. In the meantime, exports continue to struggle. Inspections last week were below the previous week at 26.2 MB. They must average 48.5 MB on a weekly basis to reach USDA’s target of 2.075 BB which seems like a Hail Mary. Although the pace of shipments has improved the past few weeks, they are running 7.9 percent below their five-year average. The bottom line in corn is that the crop in Argentina will have to deteriorate further to overcome the decline in exports.
All eyes have been on crop conditions in South America, especially Argentina, while the decline in exports has mostly been ignored. However, that may be changing as harvest of early planted soybeans has begun in Brazil with yields being reported slightly better than a year ago. In the meantime, exports are languishing. Inspections last week were 53.3 MB with China taking 33.3 MB. While overall shipments have declined 32.8 percent since early November, shipments to China have fallen 42.0 percent. That said, it will be difficult for soybeans to hold price gains unless the crop in South America disappoints.
While dryness has plagued wheat in the southern Plains, global prospects are favorable with Russia expected to produce a record crop. In the meantime, the U.S. continues to struggle in the world market. Export inspections last week were the second lowest of the marketing year at 3.1 MB. After showing signs of improvement for six weeks, the pace has declined.
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