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Tidbits, Spreads, Livestock, Export Sales, Markets & Rain Days Update 1/21/23

Highlights


The USDA’s weekly export sales had corn and wheat sales higher than the top end of the range of expectations. It is not a miracle; North America has always been the wheat supplier of last result. The January sharply increased insurance rates for ships in the Black Sea and increased export tax on Russian wheat, it was time for Canada and USA to get some wheat sold.

Argentina and Ukraine are the world’s #3 and #4 corn exporters and they both have serious problems exporting anything and the #2 corn exporter, Brazil, always gets its corn sold by the end of January to make way for its soybean harvest. Only the USA has corn for sale until Brazil’s second crop corn harvest begins in July. Note the export sales summary below. There is a lot of interesting information there.

 

Tidbits


Yesterday morning, USDA announced the sale of 220,000 mt of old crop soybeans to unknown. This is the 3rd spot sale since late December when all new sales are supposed to be going to Brazil. The harvest ready beans in Brazil are in the central area of South America and that is where it has been raining every day. There is no combine which can harvest soybeans in the rain. So, the US soybean export window stays open.

Check the number of days with rain in the forecast for the first three locations on our daily rain day chart. When they get the rain days down to 6 or 7 out of 10, harvest progress will really pick-up in Brazil.

Yesterday’s Cattle On Feed Report (% of a year ago):

  • On Feed 96.8% expected; actual 97%

  • Placements 91.5% expected; actual 92%

  • Marketings 94.7% expected; actual 94%

Yesterday’s USDA Poultry Report for December (percent of a year ago):

  • Eggs Produced 94.2%

  • Total Layers 96%

  • Layer Hatch 107%

  • Broiler Hatch 101%

Clearly bird flu took a massive toll on the layer flocks. It is well known in the poultry circles that 2022 was the worst year ever for bird flu. The good news for corn and soybean producers is there were 7% more layer eggs hatched in December 2022 than in the same month a year ago. Those peeps are already eating corn and bean meal.

The merger of 2,700 Kroger stores across the United States and over 2,200 Albertsons locations is expected to close in early 2024.

Baker Hughes reported yesterday the US oil and gas drilling rig count was down 4 (crude down 10, gas rigs plus 6) from last week to 771; Canada added 14 rigs.

Farm Futures survey estimates 2023 U.S. corn acreage at 90.531 million vs 88.579 million last year and soybean acres at 88.915 million vs 87.450 million last year. They see wheat acres at 48.839 million vs 45.738 million last year, with winter wheat at 34.892 million vs 33.271 million last year.

Russia will raise soybean export taxes from 20% to 50% “soon.” They do not export enough beans to make a difference, but it does take a few beans off the market.

CHS 2023 Virtual Grain Market Outlook & Strategies February 21 and 22. Review agenda and register at: media.inhousegroup.com/chs/hedging/2023mos/

Yesterday was the second consecutive day that beans and CBOT wheat had the nearby months gaining on the deferred months. In the case of beans, it was the second consecutive day that the inverse increased despite a down day. Inverses are supposed to decrease on down days. When they do not, bullish!


 

Export Sales Tracker



 

Market Data


This morning:

Crude oil settled at $81.69, up $1.08

The dollar index settled at 101.99, down 0.07

July palm oil settled at 3,863 MYR, unchanged. The contract high was made September, 1st at 4,365 MYR. Palm oil owns 36% and soybean oil owns 28% world market share.

July cotton settled at $87.22, up $3.04 per cwt. The contract high was made September, 1st at $101.64 per cwt. Cotton competes with soybeans and corn for acres.

July natural gas settled at $3.413, down 0.070. The contract high was made September, 6th at $5.938. Natural gas is the primary cost to manufacture nitrogen fertilizer.

July ULSD settled at $2.9602 per gallon, up 0.0450. The contract high was made November, 4th at $3.1450. ULSD stands for Ultra Low Sulfur Diesel.

March Dow Futures settled at 33,474, up 335. The lifetime high is 36,832 on January 5th, 2022.


 

Rain Days Update


The 6 to 10 day forecast updated every day at: https://www.cpc.ncep.noaa.gov/products/predictions/610day/

Explanation of Rain Days


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