Good morning,

The markets are taking a beating again today with corn down 10, soybeans down 12 and wheat down 18.

The USDA cut the Argentina crop by a record 8 mmt of beans and 7 mmt of corn in yesterday’s report.  The USDA also lowered corn exports by 75 million bushels while raising bean exports by 25 million bushels.  They also reduced crush by 10 million bushels resulting in a carryout of 210 million bushels.  The wheat balance sheet was left alone.

Following the report, the market quickly faded in all commodities.  Corn headed back to the recent low and wheat made a new one.  Elevators and crushers are oversupplied with soybeans as Brazil continues to ship new crop. Short-term supplies will flood the market, but now the long-term outlook is in jeopardy as Argentina will not be able to export many beans or oil to China.

Brazil’s Conab raised their 2022/23 corn production estimate from 123.7 to 124.7 million tonnes this morning, with first crop output up from 26.46 to 26.76 MMT, and second crop output up from 95.0 to 95.6 MMT. Soybean production was cut from 152.9 to 151.4 MMT this month.

The Rosario Exchange yesterday cut their 2022/23 Argentine soybean export estimate from 34.5 to 27.0 MMT, the worst on record since the turn of the century when the Exchange began keeping records. Corn output was slashed from 42.5 to 35.0 MMT.

Right now the market is discounting the losses in Argentina as US supplies and Brazil’s crop size outweigh the losses. I don’t think we continue to trend lower, but unless we have a spring planting delay, we could easily see another 25-50 cent drop in the market.

Have a Safe Day!

Garry Gard