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By Tori Uhland

February 8, 2023

Markets are a bit nervous to start the week after the United States shot down a Chinese surveillance balloon over the weekend. China said the balloon was for scientific purposes and had blown off course. Geopolitical tensions with China would not be a bullish signal for U.S. grains.

February could be a big month for the markets. The Goldman roll started on Tuesday, February 7th. The February World Agricultural Supply and Demand Estimates report (WASDE) is scheduled for Wednesday, February 8th. The February WASDE generally isn’t a big market mover, but the market will be watching to see if the USDA makes any adjustment to the South American soybean crop. The USDA Ag Outlook Forum will take place on February 23rd and First Notice Day for March futures is on February 28th, so any unpriced March basis contracts will need to be priced or rolled before then.


The corn futures have been trading sideways and seem to be content doing so.

The Argentina Grain Exchange raised their Good/Excellent rating of Argentina’s corn crop by 10 points to 22% after recent rains.

There are still a lot of big questions about Mexico’s ban on GMO corn and their overall import plans. The U.S. Ag Attache in Mexico raised their estimate of corn imports by 100 thousand metric tons (tmt), to 17.3 million metric tons (mmt), and also lowered their production by 200 tmt. This leads to the question of how they plan to decrease imports by 30-40% by 2024. The Attache has also observed some processors building inventory throughout the changing of policies. As I’ve said before, Mexico cutting their corn imports could be devastating to U.S. markets.


Last week, the Commodity Credit Corporation (CCC) canceled their 91 tmt tender for hard red winter wheat, but then it was reissued on Friday afternoon for a total of 229 tmt. Otherwise, demand for wheat is still poor.

Without any big updates on the Ukraine/Russia war situation, futures are range bound. Futures had started to work in the direction of feeding wheat over corn but over the last couple of weeks the spread has changed, as if the market is trying to keep wheat from being fed since we have lower stocks and there still is some uncertainty with world production and geopolitical situations. With futures at these levels, wheat isn’t at a value that works in the feed ration.


The Argentina Grain Exchange raised their Good/Excellent rating in the soybean crop by 5 points to 12 percent after recent rains in Argentina. This is still a historically low crop rating for Argentina and production will be short. The market is trying to balance Argentina’s shortfall with Brazil’s huge crop, despite harvest delays. Brazil is estimated to currently be around $1.00 per bushel cheaper delivered to China than U.S. beans, which isn’t a good sign for our export program. Brazil’s AgRural estimated that Brazil’s soybean harvest is now 9 percent complete versus 5 percent last week and 16 percent last year, but harvest could be further delayed after the area received over an inch of rain.

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There was a big jump in the jobs report last week along with a 3.4% unemployment rate—the lowest since 1969—which is alluding to the idea that we may see more rises in interest rates. The U.S. Dollar made strong gains last week while metals were down hard.

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