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Market Commentary for 3/20/23

Jon Scheve with weekly market commentary made on March, 18, 2023

May corn finished the week up 17 cents, largely due to China providing export announcements four days in a row. Each day with an export announcement, old crop corn futures also increased. There has not been a four day rally on the May contract since early January. Also last week, it was announced that the funds have been liquidating a significant amount of their long positions since late February. It now seems end users and likely China were buying old crop corn during the pullback. If the funds move to a holding pattern while farmers are planting, a floor price might have been established. And if more exports are announced in the next few weeks, higher prices are a possibility. Ukraine Uncertainty Continues Currently, it is unclear how many days the Ukraine grain corridor will be extended. Ukraine said it was renewed for the normal 4 months, while the Russians have said it was only for 2 months. Fewer days makes it more difficult logistically for buyers to line up freight in and out of the region. Either way, the continued uncertainty in Ukraine will not likely go away anytime soon. South American Weather The Mato Grosso region in Brazil has had significant rainfall recently, and some are concerned there could be nitrogen loss in the soil which could lead to yield reductions longer term. Conversely, Argentina continues to miss out on rainfall, and the dry weather may reduce yields even further. Wheat Weather Impact Continued dry weather in the US southern plains may help Kansas City wheat futures prices and minimize it being used as a corn replacement in feed rations this spring. African Swine Fever (ASF) There were reports this week that the disease is again present in China. Some market participants suggest that the disease has only affected about 10% of the herd and is not a big concern at this point. It seems that every winter now the disease is making a return, but producers there are getting better at dealing with the outbreaks too. This issue will be monitored closely by the markets moving forward. Banking Concerns All the banking issues in the news this week has spooked the financial markets. To combat this, the Fed and their European counterparts seem determined to keep the faith in the banking systems strong by moving quickly to keep depositors at these shaky institutions whole. Long term this should be positive for the financial markets, and in turn corn prices. Moving Forward As the trade awaits the acreage and old crop stocks report on March 31st, the focus before the report will be on export announcements out of the US.

Jon Scheve Superior Feed Ingredients, LLC

9358 Oak Ave Waconia, MN 55387

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