This Week in Commodities 3-10-2023

Corn Continues Lower

  • May CBOT corn futures shed 22-1/4 cents this week to close at 617-1/4
  • December 2023 CBOT corn futures shed 13-1/4 cents this week to close at 557-3/4.
  • There were no bullish surprises for US corn in yesterday’s USDA Supply and Demand report
  • The USDA made major reductions to global demand to fully offset the 7 million cut to Argentina’s corn production
  • Corn exports sales were above trade expectations and the 4-week average but this didn’t help support prices
  • Selling pressure persists as fund traders continue to liquidate their long positions

Soybeans Pressured by Export Cancellations

  • May CBOT soybean futures shed 11-3/4 cents this week to close at 1507
  • November 2023 CBOT soybean futures shed 15-1/2 cents this week to close at 1357-1/2
  • Negative export sales due to large cancellations, triggered selling in soybeans yesterday
  • Weakness in other commodities added to the pressure
  • The USDA lowered global ending stocks on yesterday’s WASDE report to 100.01 million tons versus 99.0 MT in the 2021/2022 season and 100.03 MT in 2020/2021
  • The USDA cut its estimate for Argentina’s soybean crop by 8 million tons on yesterday’s WASDE report to 33 million tons, and yet the Rosario Exchange cut their estimate again this week to 27 million tons. This would be Argentina’s smallest crop since 2008
  • Prices remain supported above the February low


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Wheat Made New Lows for the Year

  • May CBOT wheat futures fell 29-1/2 cents this week to close at 679-1/4
  • May KCBOT wheat futures shed 18 cents this week to close at 798-1/4
  • May MGEX spring wheat futures shed 44 cents this week to close at 828-3/4
  • Wheat futures found support today and finished the day higher but only after dropping to new lows for the year. Minneapolis Spring wheat and Chicago Soft Red Winter wheat fell to levels not seen since July 2021 as funds continued to short the market
  • Export shipments of 13.9 mb were below the 17 mb needed each week to achieve the USDA’s export estimate of 775 mb and was down 38% from the previous week
  • The USDA left Russian production unchanged at 92 million tons, which is 8 million tons lower than some private analyst projections

Class III Lower, Class IV Stagnant

The second month Class III contract failed to add onto yesterday’s gains but was overall higher on the week. The contract bounced 15 cents higher for the week and stayed above a trendline dating back to 2020. The Class IV second month contract worked in the opposite direction and has traded even or lower over the last four weeks, losing 36 cents this week and over a dollar during the last four weeks. The Class III and IV prices are not the only dairy products converging recently, the spread between spot cheese blocks and barrels has collided this week, leaving only a one cent premium on blocks, that premium was 37.5 cents to start the week. That collision can be associated with regional cheese reports showing barrel inventories getting back to healthy levels as demand for cheese, despite strong production, is fair in the US. Cheese demand in Europe is being reported as strong, with their domestic producers keeping busy production schedules and not growing inventories, while total cheese exports reported for January up over 15%YoY. Butter exports were the only dairy product to show YoY reductions in exports, a 13% drop from 2022, pressuring nearby butter futures to new lows for the month and for the current move to the downside.


Marianne Janka

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