MARKET COMMENTARIES

Morning Comments/Roy's (RJ O'Brien)

Morning Grain Comments - February 7,  2023

USDA crop report Wednesday at 11:00 am CST

Corn:  Corn is slightly lower this morning but look for 2-sided trade today.  Energies and US dollar are higher with equities mixed as macro markets wait for Fed Chairman Powell to speak later this morning. Overnight S. Korea booked 138k tons or 2 cargoes of S. American corn for FH Mar and April shipment.  Spot interior corn basis levels remain defensive on commercial movement while US producer remains on the sidelines. The Goldman index roll starts to today and runs for 5 sessions.  Interesting to note open interest in corn was up 9k contracts and soybeans were up 14k contracts.  US ag attach√© for Mexico estimates corn imports for 2022/23 will be 681 mln bu vs last year's 712 mln bu (which was a record).  Look for sideways trade in front of USDA WASDE report tomorrow.  Support in March at $6.70 and $6.60 with resistance at $6.85-6.90.
 
Wheat:  US wheat is mixed this morning with KC wheat slightly higher.  European wheat futures are steady to firmer.  Stats Canada wheat stocks report was dead-on with 22.3 mmt for all wheat (vs the 22.3 mmt avg trade estimate and range of 21.2-23.2 mmt).  Durum stocks were 3.7 mmt vs avg trade estimate of 3.9 mmt. Weather maps remain on a drier pattern for HRW areas.  TX wheat is rated just 13% Good (0% excellent) and 51% P/VP.  But this is still better than a year ago as this week's condition index is 41 vs 28 last year at this time.  7% of the TX winter wheat crop is headed vs 5% on avg.  Export news saw Jordan pass on its 120k ton tender.  Results waited for the Algerian tender. Japan is in for 83k tons of milling wheat for March-May shipment (32k is US origin). 
 
Soy-complex:  Soybeans are slightly higher as weather maps remain wetter than yesterday's runs for C-S Brazil in the 11–15-day period.  Soy oil seeing support from higher energies and Indonesia suspending/revoking some export permits in an effort to cool down domestic prices.  Canada's canola stocks at 11.4 mmt was less than the avg estimate of 11.7 mmt but within the
range of 10.7-12.6 mmt.  Over the weekend the IL governor signed a state package that creates a $1.50 per gallon tax credit for SAF sold/used in IL starting June 1 and runs through Jan 1st 2033.  This credit is on top of the federal credit.  Look for mixed trade in soybeans today as it remains range bound between $15.10-15.50 until a great supply of new crop Brazilian soybeans can hit the export market.