• HEADLINES: Wheat soars on Russian geopolitical worry, Argentine GFS forecast arid into March; China buys US soybeans.

• Chicago corn, soybean and wheat futures are sharply higher at midday on fund short covering, dry Argentine weather forecasts and new Russian aggression in its war against Ukraine. Managed money has been active buyers of wheat, corn, soybeans and soyoil. Unlike yesterday, funds have been limited buyers of soymeal and are basically flat. The morning trade volume has been sizeable with more than 152,000 contracts of March corn, 82,000 contracts of March wheat, and 112,000 contracts of March soybeans trading hands. Monday is the last day of the index fund roll which should add to today’s volume at the close.

• We calculate that funds are back to holding a record or near record long position in meal, while adding to their length in soybeans/corn. Funds are holding a sizeable net short Chicago wheat position of more than 55,000 contracts which is vulnerable if Russia ups its aggression in its war against Ukraine. Wheat charts turn more bullish with close above $7.80 March Chicago with values able to push above the 50-day moving average earlier this week.

• Chicago brokers estimate that funds have bought 7,400 contracts of wheat, 5,600 contracts of corn, and 5,100 contracts of soybeans. In the products, funds have booked 3,200 contracts of soyoil while buying 900 contracts of soymeal. Managed money has been Chicago buyers from the opening bell.

• China is rumoured to be back in the US Gulf soybean market taking 3-4 cargoes in the past 48 hours. The return of Chinese demand was a surprise, but the buying is likely for their soybean reserve. China prefers to source reserve soybeans from the US or Argentina. With the Argentine soy crop getting smaller, it may have pushed the Chinese Government to be buyers from the US.

• The CFTC will be unable to update its weekly CoT report today as data is lacking from key market participants. The CFTC hopes to release the report when data is available/updated, and go backwards to release the report starting with January 31 and following with February 7. Trader’s hope is that the CoT updates will be available next week.

• Russia is positioning itself for coming UN negotiations over the continuance of the Black Sea Grain Export Corridor Agreement which expires on March 19.  Russia continues to argue that Ukraine exported grain is not flowing to needy countries, but western nations like the EU. Moreover, the Russian military is stepping up their rocket attacks on Ukraine infrastructure including its power grid. The uncertainty of a corridor deal extension and Russian military push has short wheat holders worried about growing geopolitical tensions.

• The midday GFS weather forecast is drier for Argentina/S Brazil. The model has pulled the rain potential northward into N Argentina and S Brazil into early next week with totals in the heart of the growing area ranging from 0.1-0.7”. Such rain is far less than what is needed to replace lost soil moisture and the drought will worsen. In fact, the 10–15-day period maintains an arid trend into the closing days of February, a growing concern that Argentine crop yield/production.

However, we note that the GFS forecast has under-forecast rain with the past 3 storm systems, and we fear that the model is making the same mistake again. We look for rain of 0.5-2.00” in the period from Sunday through Wednesday. Heat returns around Feb 20 and then lasts into the Feb 26.

• Chicago is adding back weather/war risk premium into price heading into the weekend. Brazilian hedge pressure late session will pull soybean values off their highs as the harvest accelerates and pushes further south. Yet, Russian aggression against Ukraine is on the increase which worries anyone short wheat. We hold to a view that spot Chicago wheat peaks between $7.90-8.10, March soybeans above $15.40 and March corn above $6.85. Chicago is still stuck in a wide ranging trade. Don’t buy rallies or sell breaks with Argentine crop sizes still in decline.

• HEADLINES: Mixed session with meal rising on new fund buying/dry S Argentine weather; March corn sags to $6.70 support.

• Chicago corn, soybean and wheat futures were unable to hold the early rally and values are lower at midday. Soymeal is holding its overnight gains on meal/oil spreading, regardless that US soymeal export sales are not showing much improvement from Argentine soy crop losses. S American fob soymeal for March/April is offered $20-35/mt below the US Gulf which limits US export competition. Yet, we doubt that March soymeal can push above recent resistance at $495-505/ton, a range that is the historical resistance on the weekly/monthly price charts. Cash soymeal in Decatur is offered at +3-4/ton over Chicago on the rail with their being no meal registrations for delivery on first notice day. Today’s meal rally is about chart-based momentum with little fresh fundamental news available. Southern Argentine weather is drier than desired, but crop condition ratings later today are expected to be steady from last week. We look for a mixed Chicago close with the bears needing a a few good rains to take the pressure off the crop. Most in the industry are using a 2023 Argentine soybean crop of 37-40 million mt and a Brazilian soybean crop of 153-154 million mt. Early Northern Brazilian soybean yields are solid to record large.

• Chicago brokers estimate that funds have sold 1,500 contracts of wheat, and 2,000 contracts of corn (9,000 contracts of buying early in the session) while being flat in soybeans. In the products, funds have bought 5,400 contracts of soymeal while selling 6,100 contracts of soyoil. Managed money is being protective of a near record net long position in soymeal.

• Rumours abound that the ICE Exchange is experiencing IT problems that may prevent it from providing its position data to the CFTC. So far, the CFTC has not announced whether Friday’s Commitment of Traders report will be released. The industry hopes for a CoT report but worries that it could be delayed for another week.

• US Weekly Export Sales data held few surprises. For the week ending February 2 the US sold 4.8 million bu of wheat, 45.7 million bu of corn, and 16.9 million bu of soybeans. For their respective crop years to date, the US has sold 599 million bu of wheat (down 38 million or 6%), 1,055 million bu of corn (down 745 million or 41%), and 1,753 million bu of soybeans (up 36 million or 2%). The US corn sales pace continues to lag well behind USDA annual corn export forecast calling for a cut of 75-125 million bu.

• US soymeal sales stand at 7.21 thousand tons vs 7.72 last year or a decline of 500,000 tons or 6.5%. There is no evidence that US soymeal sales are likely to pick up steam vs Argentine crop losses with Brazil and Argentine offering meal through June at price levels that are $15-40/mt below the US Gulf.

• The midday GFS weather forecast was drier at midday with limited rains for the southern half of Argentina over the next 10 days. The model has pulled the rains northward into N Argentina and S Brazil early next week. The only good news for Argy crops is that the heat will abate with seasonal 80’s to lower 90’s returning for high temperatures.

• Near normal rainfall exists for Northern and Central Brazil for the next 6-8 days with near to above normal rains returning for the week 2 forecast. The rain favours already seeded winter corn, but it will hinder the soy harvest.

• The market focus nearby is on Argentina and the placement of rain from Sunday through Wednesday of next week. The GFS model has a history of being too dry since mid-January, we will see if the drier forecast is correct.

• US corn export demand is below expectations and no demand bump is being offered as Brazil focuses its exports on new crop soybeans. Soymeal is being supported by drier Argentine weather forecasts, while Northern Brazilian soy yields argue for a crop boost in coming WASDE reports. We are bullish of Chicago soyoil while being neutral to bearish of corn, soybeans, and wheat.

• HEADLINES: USDA raises US stocks, lowers Argentine production; Feb WASDE lacks market-changing data.

• The USDA’s February WASDE leans mixed, but like most years the report lacked statistical fireworks and S American weather stays priority number one into the middle part of March. Range bound trade will continue into at least the release of USDA Outlook Forum data in late February. Rising US end stocks cap rallies; falling Argentine production estimates lend support.

• US corn stocks were lifted 25 million bu amid lower projected ethanol production, which is USDA simply aligning with the pace of output to date, namely the steep year-on-year drop in production autumn and early winter. Otherwise, the US corn balance sheet was left untouched, though we fear another modest downward revision to exports in March or April. Like ethanol grind, it will be difficult for exports to catch up given commitments as of Feb 2 were down 42% from the previous year.

• US soybean stocks were raised 15 million bu to 225 million. 2022/23 crush was lowered a like amount based on pace analysis. NOPA/Official crush has fallen below year-ago levels in each of the last two months despite enlarged margins. Capacity will be expanded but monthly data must show a decently sized year-on-year increase beginning in spring. Exports were left unchanged.

• US wheat stocks were raised 1 Mmillion bu. Higher projected seed disappearance was offset by reduced milling demand.

• Argentine corn production was lowered another 5 million mt amid weak vegetation health/crop ratings and following a string of reduced forecasts from the major grain exchanges there. Argentine corn production is now pegged at 47 million mt, vs. initial estimates in late 2022 of 55 million. Argentine exports were lowered 3 million mt, feed use 2 million mt, and major exporter corn stocks/use was trimmed to 8.1%, vs. 8.3% in Jan and 8.6% in Dec. Large Brazilian/US production is needed in 2023.

• Argentina’s soy crop was lowered 4.5 million mt to 41 million, the lowest since 2017/18. Crush was lowered 1 million to 38 million mt, unchanged from the previous year, and Argentina is forecast to be a net importer of soybeans worth 3.8 million mt. Argentina last year was a net exporter of 2.1 million mt. Brazilian soy production was left untouched at 153 million mt. Combined S American soy production in 2023 will be up 26 million mt. Exports will be up 17 million mt, with crush up 2.4 million mt from last year.

• The market anxiously awaits the complete arrival of Brazil’s soy crop, but a steadily weakening Brazilian cash market is expected to lead Chicago futures lower during the spring months.

• World wheat stocks were raised 900,000 mt amid larger projected production in Russia and Australia. USDA is unwilling to adopt Rosstat’s 100+ million mt Russian output figure but raised production there 1 million mt amid larger spring wheat harvested area. Australian wheat production was increased 1.4 million mt to a record 38 million mt. Russian exports were lifted 500,000 mt to 43.5 million mt. Aussie exports were also raised 500,000 mt to a record 28 million mt. Competition for late season importer wheat demand will stay intact, which will act to challenge rallies at $7.60, spot Chicago, and $9.00, spot KC.

• Global ag futures have largely shrugged off new USDA data. We believe that late Feb/early Mar weather conditions in Argentina will be the primary driver of daily/weekly row crop price determination, while rising Black Sea tension and the end of round 2 of the Black Sea export corridor in mid-March lingers in the background for wheat markets worldwide.

• El Niño is expected by May/Jun. A record large Brazilian crop is likely given current soil moisture abundance there and as climate guidance keeps a pattern of above-normal precipitation in place across Central Brazil into March 13.

• HEADLINES: Chicago futures chop on pre report positioning; Index fund roll starts on the close; Stats Canada stocks uninspiring.

• Chicago grain futures are sharply mixed at midday with an early rally in soybeans failing while wheat futures try to regain lost early ground. Corn is holding in the red with rallies being sold. The 50 day moving averages crosses at $6.65 in March corn and $14.94 in March soybeans. A non-bullish USDA report could cause both support levels to be tested by the weekend. The midpoint of the crop year will be reached by the end of February, and price focus will be shifting away from S American crop sizes to the new Northern Hemisphere growing season. Risk is being adjusted accordingly.

• China was an active buyer of 4-6 cargoes of Brazilian soybeans for April/May this morning while China’s trade of soymeal at port was a massive 1.0 million mt. Chicago acted poorly to Chinese demand on the thinking that China has covered 70-80% of their April soybean imports and 60-65% of May. And the big Chinese soymeal trade was likely capitulation by livestock feeders fearing that prices would keep rising. The net result was that Chicago soybean/soymeal futures fell while soyoil rallied sharply.

• Chicago brokers estimate that funds have sold a net 3,700 contracts of corn and 1,700 contracts of soybeans, while buying 2,100 contracts of wheat. In soy products, funds have sold 4,200 contracts of soymeal and bought 6,200 contracts of soyoil. We are told that there was some good cash connected end user pricing shortly after the morning reopening.

• There were no daily sales announced by FAS/USDA today. However, Census confirmed that there were 305 million bu of soybeans, 145 million bu of corn, and 39.6 million bu of US wheat exported during December. This compares to 297 million bu of soybeans, 196 million bu of corn, and 50 million bu of wheat during December 2021.

• Stats Canada reported December 31 grain and oilseed stocks of 22.3 million mt of wheat, 11.4 million mt of canola, and 3.6 million mt of oats. Trade estimates nailed the wheat/oat stocks totals but were 300,000 mt too high on canola. The report leaned bullish canola and neutral of the grains.

• Algerian wheat purchase prices are said to average $329/mt basis CIF for April. The wheat is said to be a mixture of EU/Russian wheat. The Russians are offering wheat for April around $308/mt which would leave $20-21/mt to cover freight and costings. Purchase tonnage totals are awaited but note that key world wheat importers are getting coverage through April/May amid the potential escalation of the Ukraine war by Russia. Also, another Black Sea Corridor Pact must be signed by all sides before March 19 to continue.

• The midday GFS weather forecast is slightly drier than the overnight run with less rain coverage/lower amounts for Western Argentine crop areas. The GFS Ensemble model pegs rain totals in a range of 0.25-1.50” from Sunday through Tuesday of next week. This is down around 0.50” from what was offered by the GFS and other forecast models overnight.

• Dry weather follows in the 10–15-day period with another rain event needed in late February for crops to mend across Argentina. Projected Brazilian rain for RGDS/Parana is estimated at 1-2.50”. Such rain will aid the far Southern Brazilian soybean/corn crops. Another 2-3 soaking rains are needed across Argentina for yield improvement into March 10.

• Price action following the USDA February Crop report is key. We doubt that the bulls will chase a bullish report. However, until a more regular rain pattern develops across Argentina, breaks will also be supported. We would argue that a longer term price peak has formed, and that additional Argy supply loss is needed to push Mar soybeans above $15.50 or Mar corn above $6.90. Otherwise, Chicago corn and soybean values will settle lower with the oil share spread performing. Wheat holds in a range into spring awaiting additional rain for the Western US Plains.

• HEADLINES: Chicago sags on better rains for Argentina; US dollar catches a bid; Key 50 day moving average just below in corn/soybeans.

• Chicago grain futures are lower at midday on a gain in the US dollar, rising US/China political tensions, and potential for rain across the key crop areas of Argentina this weekend and early next week. Today’s tone of Chicago is bearish, but the USDA February Crop report will be released in less than 48 hours with traders adjusting their risk accordingly.

• Funds are holding sizeable, long positions in soymeal, soybeans and corn and a sizeable net short position in US wheat futures. Yet, we calculate that funds are holding their smallest net long soyoil position in 20 months. The recent break has pulled spot Chicago soyoil futures to their lowest level since July 15 when spot futures fell to 58.40 cents. The low this morning for March soyoil was $58.43. We would argue that soyoil futures are undervalued and that soymeal futures are overvalued. It will be key to monitor the oil share spread following the USDA February Crop report on Wednesday.  We look for a mixed close today, and for that trend to persist into the USDA report. Record soybean yields out of N Brazil will make up for any Argentine soybean crop shortfall under 40 million mt. The N Brazilian soy yields are that sizeable.

• Chicago brokers estimate that funds have sold a net 4,700 contracts of corn and 3,800 contracts of soybeans, while buying 900 contracts of wheat. Funds were early buyers of 2,900 contracts of wheat and turned around as sellers of 2,000 contracts for a net of 900 contracts on the day. In soy products, funds have sold 3,400 contracts of soymeal and 4,800 contracts of soyoil.

• The USDA confirmed that Mexico purchased 200,000 mt of US corn with 118,000 mt to be sold to Japan. The Japanese corn was old crop while the Mexican corn purchases was evenly split between old and new crop.

• The devastating S Turkish earthquake has not caused any delays in Black Sea grain inspections or shipments. However, it could delay future Turkish grain tenders until more is known about the financial and structural damage to Turkey. Today it is about the aftershocks and the help needed in distributing food, aid, and other supplies.

• US export inspections for the week ending February 6 were 18.9 million bu of corn, 19.7 million bu of wheat, and 67.2 million bu of soybeans. Wheat exports were larger than trade expectations, while corn was less while soybeans were right at trade ideas. For their respective crop years to date, the US has exported 493 million bu of corn (down 239 million or 33%), 1,392 million bu of soybeans (up 8 million or 1%, and 505 million bu of wheat (down 9 million or 7 million bu or 2%). US corn loadings must soon start to rise for there to be any chance of reaching the WASDE forecast of 1,925 million bu. We see 2022/23 corn exports at 1,850 million.

• Stats Canada will release their closing January grain stocks tomorrow morning. It is expected that stocks of wheat, canola, oats, and corn will be well up from the year prior, remember that 2021 was drought impacted.

• The midday GFS weather forecast is wetter than the overnight with better rain coverage/higher amounts for Argentine crop areas after Feb 12. The GFS forecast pegs rainfall totals in a range of 0.5-2.00” from Sunday through Tuesday of next week. Dry weather follows in the 10–15-day period with another rain needed in late February. Projected Brazilian rain has improved for RGDS/Parana with heavy totals of 2-5.00” offered for Sao Paulo.

• Extreme heat returns to Argentina this week but abates next week. USDA will likely cut its Argentine corn/soy crop estimates on Wednesday due the ongoing drought.

• Chicago has a heavy feel as new money is not flowing into raw material markets. This is a departure from the start of the year. And the USDA report is not scaring end users into taking soymeal coverage before the report. The 50-day moving average crosses at $6.65 basis Mar corn/$14.92 basis Mar beans.

• HEADLINES: Interior Russian wheat market offsets rising export tax; Soybeans slip lower in late week trade; CBOT corn ends firm but lacks bullish enthusiasm; Momentum stays absent nearby; Wheat ends weak on surge in US dollar.

• There is no indication that Russian wheat exports will slow meaningful. Egypt confirmed that it had purchased a sizable 535,000 mt of Russian origin for late Feb/March delivery at below replacement prices that included costs and freight. Relative warmth and a lack of heavy snowfall in Southern Russia will prevent major logistical issues at ports during the first half of February.

• Russia’s nearby wheat export tax has pushed up to $62-63/mt vs $45-48 in December. However, the rise in tax costs has been partially offset by falling interior values.

• The Russian Ruble scored a newer three-week low on Friday, with spot wheat in Southern Russia pegged at $183/mt, vs. $200 in mid-December. Russian exporters are receiving adequate supplies, while also face decently sized margins at current fob offers, which are $20-80/mt below EU/US origins. It is tough to be bullish of US/EU exports into early spring on the Russian wheat export aggression.

• Chicago soybean futures were down 2-3 cents to end the week, caught between a strong rally to new contract highs in the soybean meal market and a drop to a 7-week low in the soybean oil market.

• The USDA announced new crop soybean export sales to unknown destinations of 4.9 million bu. There has not been an old crop sales announcement in over a week, and we expect that daily announcements will be few and far between in the coming months as world demand is re-routed to Brazil.

• The Commitment of Traders report has been delayed due to reporting issues and is expected to be released next week. Chicago soybean open interest has been rising on seasonal considerations ahead of the March expiration. However, total market open interest is well below both last year and the 5-year average for early February. With a record large Brazilian crop on the way, speculative Chicago interest is reduced.

• The February WASDE will be released Wednesday. A further decline in the US export forecast and an increase in the Brazilian crop size are expected. The trade is anxious for Argentine crop and global S&D updates. Our market outlook is bearish on rallies.

• Chicago corn futures ended just fractionally higher. March has been unable to close below initial chart-based support at $6.75 but has been equally unwilling to add risk premium at/above $6.85. We expect a range of $6.60-6.85 to continue into planting, but it is imperative to use near-term strength to position for a more significant correction in mid/late spring.

• The market through February must contend with the return of warmth and dryness in Argentina, which is forecast into at least Feb 12. Brazil’s market has been somewhat firm, with March and May contracts there rising to $7.45-7.50/bu this week. Safrinha corn seeding in Mato Grosso is just 16% complete, vs. 32% on average. An acceleration in planting progress lies ahead, but ideally the crop there is fully in the ground by March 5. S American weather remains a priority.

• US domestic use will be challenged by weak ethanol profit margins and low cattle numbers. Falling crude oil prices are noteworthy. The market lacks the fear of shortages seen a year ago, and new supply dislocation is needed to test $6.90-7.00 basis spot.

• US wheat futures ended slightly lower on Friday amid renewed buying of the US dollar, which rallied 1.1%, and an otherwise lack of breaking news. US job growth of 517,000 in January has triggered fears of yet more benchmark interest rate hikes throughout 2023. The dollar appears to be forming a rounding bottom, and it is clear money has flowed quickly from the euro and other currencies to the dollar, which on balance harms US export demand.

• We doubt a lasing bear trend can be sustained until trend/above trend yields can be confirmed across the Northern Hemisphere this spring. But Russian wheat remains cheap. India’s cash market has turned lower for the first time since September. Harvests begin in North Africa, the Mid-East and India in April, and rallies will struggle mightily as global trade limps into the spring and summer.

• The risk of moderate fund short covering remains present.

• HEADLINES: Corn/wheat fail on early day rally; Funds add to length in soymeal; GACS gets cheap Russian wheat offers.

• Chicago grain futures are mixed at midday with the fund order flow being the dominate feature (once again). Chicago has all been about the flow of money since the start of the year with traders struggling with the back and forth of prices, depending on whether the money comes or leaves. Today is another example of new fund investment flowing into soybeans/soymeal and out of corn and soyoil. Funds are flat in wheat after being early buyers. It is the difficulty in predicting whether an investment manager wants to be a buyer or a seller or a spreader of the oil share which hurt trend followers.

• We look for a mixed Chicago close with the index fund roll to add some market drama next week as March longs are rolled forward. Most index funds will roll to the May position, but some will go forward to December corn and November soybeans. If you want to be bullish of Chicago, new crop offers a better opportunity vs the nearby with cash basis levels likely to leak lower as world soybean/grain demand is fulfilled by S America (corn/soybeans) and Russia (wheat). These are not easy markets to trade.

• Chicago brokers estimate that funds have bought 1,600 contracts of wheat, 6,500 contracts of soybeans, and 5,900 contracts of soymeal. Funds have sold 4,300 contracts of corn and 2,300 contracts of soyoil. Chicago open interest has risen nearly 85,000 contracts in corn/soybeans (each) in 2023, which is one of the reasons for the price rise during January.

• The USDA/FAS did not announce any new purchases of US corn, soybeans, soy products or wheat in its daily reporting system. This week’s US corn, soybean and wheat sales are down, which will be reflected in next week’s USDA weekly export sales report. We are seeing world soy demand switched totally to S America. With the $0.80/bu discount of Brazilian soybeans and the $0.20/Bu savings on freight, Brazilian beans landed in China are $1.00/bu cheaper not including the $0.15-.020/bu bonus on quality. Brazil has quite the advantage right now.

• US weekly export sales for the week ending January 26 were; 5.0 million bu of wheat, 63.0 million bu of corn, and 27.0 million bu of soybeans. For their respective crop years to date, the US has sold 594 million bu of wheat (down 40.0 million or 6.4%), 1,009 million bu of corn (down 767 million or 43%), and 1,736 million bu of soybeans (up 80.0 million or 5.0%). We expect this to be the last big week of US soybean sales with US wheat sales through January being at a record low. We would argue that USDA must cut its corn export estimate by 100-150 million bu and with Brazil now offering soybeans into October, US new crop export estimates are too high above 2,100 million bu. The Brazilian soy export program will have a long tail that harms US exports well into their harvest.

• The midday GFS weather forecast is drier (which did not have much rain either), but our confidence in the GFS model stays low. Showers are exiting E Argentina at noon and will reform across Uruguay and RGDS later today. Argentina will endure 8-9 days of dry weather with heat returning early next week. The good news, near to above normal rain is forecast in the 10–14-day period which should aid Argentine yields.

• The Brazilian weather forecast offers near to below normal rain across the North and improving rain chances for RGDS in Southern Brazil. The harvest will quicken into mid-February. The weather forecast for Brazil stays favourable with record corn/soybean crops in the making.

• Brazil’s soy export aggression will be felt for months to come, and well into the US new crop position. US corn export demand is disappointing with a suggestion that a secondary price top is either forming or in place. US wheat futures ran higher on short covering, but the Russian offers to Egypt’s GASC were aggressive. A purchase announcement of Russian wheat is awaited. Russia is now offering cheap wheat into April and will likely export 44-45 million mt.  We doubt that rallies in soybeans or meal can be sustained.

• HEADLINES: Brazilian soy production talk is big as farmers sell newly cut supply; World grain trade shifting south; Egypt cancels corn tender.

• Chicago futures are lower at midday with selling noted from sagging S American soybean/corn premiums, and the ongoing shift in world trade from the US to Brazil/Argentina. The US is in the cusp of seeing its export book languish as cheaper price offers from the Southern Hemisphere curtails new nearby US corn, soybean, and wheat export sales.

• The bulls are hopeful for another large week of US corn, soybean, and soymeal sales tomorrow, but with much of Asia on holiday last week, we are doubtful.

• The slowing of US export sales and shipments has now arrived. US export sales will be slow from February through July while shipments are likely to stay tepid well into the new crop position if Brazil’s weather is normal for winter corn yield/production. Brazil still has vessels to load corn during February and early March, which suggests strongly that last year’s Brazil winter corn crop is understated by as much as 4-5 million mt. The price of feed wheat and the ongoing export of corn by Brazil looks to curtail US 2022/23 corn exports. We fear that USDA/WASDE will further cut US corn exports in coming monthly reports. The competition in the world grain export market is acute.

• Chicago brokers estimate that funds have sold 2,300 contracts of wheat, 4,200 contracts of corn and 2,900 contracts of soybeans. In the soy products, funds have sold 2,200 contracts of soyoil and 900 contracts of soymeal. The fund buying of recent trading sessions has slowed.

• The USDA/FAS did not announce any new purchases of US corn, soybeans, soy products or wheat in its daily reporting system. China is said to be bidding for May soybeans out of Brazil this morning.

• The USDA ag attaché estimated the 2023 Argentine soybean crop at 36.0 million mt, 9.5 million below the USDA. The attaché estimate is just below the Rosario exchange forecast at 37.7 million mt but well below other private estimates that range from 38-42 million. No estimate was provided for 2023 Argentine corn. The world market has heard Argentine soy crop estimates of 36-41 million mt for several weeks now and is likely trading a crop of 38-40 million mt. To take the crop lower will demand the return of acute heat/dryness in the last half of February and March. Argentine weather will be closely watched, but Chicago appears to have digested a significant Argentine soy crop loss at this point.

• Northern Brazilian soy yields are reported to be massive and are slowing the harvest but will likely cause an upward adjustment the crop in coming CONAB monthly reports. RGDS is too dry, and crop losses of 3-4 million mt are expected, but RGDS produces 21-22 million mt of soybeans while Mato Grosso produces 44-46 million mt (larger than Argentina)

• The midday GFS weather forecast is slightly drier than the overnight solution, but our confidence in the GFS model stays low. Widely scattered showers will continue for another 12 hours, but the GFS forecast is once again under forecasting rain amounts/coverage. Showers are continuing across Central Argentina at noon. Following this rain, 8-9 days of dry weather follows. Near to above normal rain is forecast in the 10–14-day period, and we doubt that Argentina is slipping back into any dire drought.

• The Brazilian weather forecast offers near to below normal rainfall across the North and improving rain chances for RGDS in Southern Brazil. An improvement in the harvest pace lies ahead.

• The Argentine dryness is becoming too well known to be much of future bullish factor. More important is that Brazilian cash selling from recently harvested soybeans is active. Farmers are harvesting record soybean yields in the north and pushing that supply across the weigh scales. Today’s Chicago drop has not altered Brazilian farm sales. A bounce into the Chicago close is expected as the bulls hope for strong weekly sales totals from USDA on Thursday. As the Brazilian harvest advances, a liquidation break should occur by mid-February. We understand that Egypt has cancelled a corn tender on price.