StoneX revised their Brazilian soybean production down 7.5 million mt to 126.5 million. The market is starting to pencil in that the US will probably pick up an additional 150 to 200 million bushels of exports. That would take the US carryover down to a 13 or 14 day supply. Currently, the USDA predicts the carryover would be large enough to meet the needs of the USA for 29 days.
Russia’s Gazprom announced it will double natural gas passing through Ukraine pipelines to the European Union in February compared to January. Natural gas prices fell out of bed in Europe.
Yesterday Russia imposed a two-month ban on the export of ammonium nitrate fertilizer beginning today.
The US soybean crush in December was an all-time high at 198 million bushels of soybeans, up 7 million bushels from November and 5 million bushels over a year ago. The previous all-time monthly crush record was 196.9 million bushels in October 2021. The market expected 197.7 million bushel crush. Better yet, soyoil stocks were less than expected by about a half billion pounds at 2.035 billion pounds. Inventory was the much more bullish than the total bushels crushed. I hasten to point out the USDA crush report was issued after the market closed yesterday.
The corn crushed in December was a record 539 million bushels with 486 million for ethanol, 7.4 million bushels more than expected.
Yesterday, soybeans in the states of Mato Grosso and Mato Grosso do Sul were selling for the highest prices ever paid in those two states where harvest is nearing its peak. Now that is bullish news! But it is also old news and already priced-in.
Mato Grosso's soybeans are 31.8% harvested compared to 4.7% last year and 20.9% average. Yields for the entire crop are expected to be about average, but the early yields are appeared to have been more impacted by cloudy conditions, lack of sunshine, and increased disease and pest pressures. The later maturing soybeans are thought to have a higher yield potential. Mato Grosso grows about 28% to 30% of Brazil's soybeans.
The number of soybean contracts traded yesterday was 2% less than Monday. That is a negative to have new contract highs on reduced volume.
USDA announced yesterday morning the sale of:
132,000 mts of new crop soybeans to China
110,000 mts of old crop corn to Mexico
Cash soybean meal prices were up more than $10 a mt around the world yesterday. March CBOT futures were up $17.10 per short ton.
West Texas Intermediate Crude Oil (WTI) Crude oil is up 18 cents at $88.38 this morning.
The Dollar Index is trading at 96.28, down 0.11.
Palm oil futures in Malaysia are not trading the rest of the week due to the Lunar New Year. It made new contract highs the last four trading days.
March cotton is up 71 cents per cwt at $128.04. The contract high was made yesterday at $129.37. The cotton gin people say that the demand for new clothes has exploded now that societies around the world are beginning to return to normal from the COVID restrictions. Cotton competes with soybeans for acres.
March Natural Gas is up $0.195 at $4.946 per Metric Million Btu. The contract high was made October 6th at $6.132 per MMBtu.
Natural gas is the primary input cost of nitrogen fertilizer.
March Oats finished yesterday at $7.15, up $0.19½. The contract high is $7.78 made November 22nd.
Rondonópolis, Mato Grosso, in the heart of Brazil's most productive soybean area, received 0.7 inch of rain yesterday; 0 inch a year ago and 0.2 inch two years ago (one inch = 24.5 mm).
Yesterday's high temperature was 80°F. Day time highs the next ten days will range from 83 to 91°F (100°F = 38°C). Yesterday, in the dry areas of South America: Santa Maria high temperature 102°F with no rain. Cordoba high temperature 92°F with no rain. Salto high temperature 95°F with no rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 1.15 inches 83 to 99°F Cordoba 0.66 inches 78 to 94°F Salto 0.89 inches 77 to 95°F
The Western Corn Belt has three less rain days than yesterday and the Eastern Corn Belt has two less rain days than yesterday.
The Equatorial Pacific water temperature chart was updated on Monday (see below). If you look closely, you can see that the temperature is very slightly above normal. This trend means the La Niña episode will be coming to an end in 40 to 60 days. A return to normal weather will greatly benefit Brazil's second crop (Safrinha) South American corn. It also means normal weather for the rest of the world.
Explanation of Rain Days
Every day, every place in the world has a ten day weather forecast issued many weather services.
By a "place", we mean a Findlay, Ohio; Arcadia, Minnesota; Atlantic, Iowa; Fullerton, Nebraska; Cordoba, Argentina; Craig, Colorado, Saratov, Russia and ten million localities we have never heard of.
The ten day forecast predicts the high and low temperature for each day as well as whether or not rain is predicted for each of the ten days, likewise cloudy, partly cloudy, sunny, etc.
We look at the ten-day forecast and if we see rain is predicted for 4 of the next 10 days, we record a "4" for that location on the chart for the today. It does not matter whether it is one-hundredth of an inch or 5 inches. We realize about half the days expected to receive rain never get rain that day, but we must be consistent in what we report each day and every day because rain makes grain a few key weeks of the growing season. Of course, we scan the temperatures and the amounts of rain just to see if anything is getting way out of the norm.