This Week in Commodities 03-03-2023

Corn Continues Lower

  • May CBOT corn futures shed 10-1/4 cents this week to close at 639-3/4
  • December 2023 CBOT corn futures shed 5-1/4 cents this week to close at 571.
  • Traders expect the USDA to cut about 3.6 million tons off of Argentina’s corn crop in Wednesday’s WASDE report, Brazilian corn production is expected to be mostly unchanged from the February USDA estimate
  • Brazil’s ag ministry announced this week another 90 firms have been cleared to export corn to China; Brazil is expecting record corn exports this year given a big jump in Chinese purchases
  • Rumors swirled this morning that COFCO has bought as much as 1.5 million tons of US corn; The last daily flash sale of US corn to China specifically was August 9, 2022

Soybeans Battle Back Late in the Week

  • May CBOT soybean futures shed 10-1/4 cents this week to close at 1518-3/4
  • November 2023 CBOT soybean futures shed one cent this week to close at 1373
  • The trade average guess for Argentina’s soybean crop size on Wednesday’s USDA WASDE report is 36.65 million tons, this would be a 4.35 million ton cut from the February estimate; The Buenos Aires Grain Exchange lowered their crop size estimate for Argentina this week to just 33.5 million tons
  • Brazilian soybeans were 33% harvested as of March 1 according to the IMEA; This compares to 43% harvested last year in the same week; Record yields in Northern and Central Brazil are more than expected to make up for the poorer yields forecasted in Southern Brazil
  • CBOT soybean meal futures shook off early week weakness to close slightly higher this week; Soybean meal will look towards the USDA’s Argentina crop estimate next week for direction


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CBOT Wheat Higher This Week

  • May CBOT wheat futures added a 1/2 cent this week to close at 708-3/4
  • May KCBOT wheat futures shed 25-1/2 cents this week to close at 816-1/4
  • May MGEX spring wheat futures shed 12 cents this week to close at 872-3/4
  • Russia stated this week it is unhappy with the negative impacts of the Black Sea Grain Deal on its own imports; The current grain deal is set to expire on March 18.
  • Spring wheat export sales are running 12% ahead of last year’s strong pace and the recent correction in prices should bring buying interest; The possibility of big spring wheat acres in the months to come could however limit upside potentia

Mixed Day for Dairy

Despite some green on the board today, most of the dairy complex was lower on the week. Nearby prices for Class III and IV found gains today with heavier losses throughout Class III from July ’23 through March ’24. The nearby gains were likely attributed to active purchasing in the spot cheese trade where prices may have found recent support. A trendline dating back to the middle of 2020 on the second month Class III contract continues to provide support on current levels. Dairy slaughter rates are well above levels from last year. To date, 406k head have been slaughtered, roughly 21.5k head above last year’s levels, these cull rates did not slow down the growth of the dairy herd which grew 9k head from December to January. Today’s Dairy Production Report showed year-over-year growth in production and inventories for most dairy products in the month of January. US butter production was up 3.8%, total cheese production up 3.2%, powder production up 2.8% with a rise in inventories, and whey production was conversely down 9.7% but inventories up 27.7%.


Keegan Madigan

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