Floor Talk, January 12, 2022 (Report Day)

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At 11:40 a.m.:

USDA SAYS

USDA global data supports soybean market.

Sales reaction:

–Chicago trader says, “USDA increased oil yield from 11.75 to 11.83. It increased production by 175 million pounds.

and was offset by increased exports of soybean oil.

will most likely increase food use as canola crushing declines…and decrease fuel use…but it’s too early to make those adjustments

The USDA without a clear change in policy or weather will be reluctant to make strident changes until tracking data

proves their worth so it was a step in the right direction but typical in its rate of change..

An increase in bean yields increased production by 10 million bushels and production fell to ending stocks in accordance with the

average business estimate.

The USDA wrote 5 tons of bean production in Brazil and down 3 in Argentina, down 1.5 in Paraguay. So down 9.5 mt, due to drought in southern Brazil, Paraguay and Argentina. If the recent rain forecast for next week is diminished or if

dry pattern returns Argentina may drop further. Some experts suggest a drop of 20 to 23 tonnes may occur in South Africa’s production.

This would most likely boost US exports late in the summer and keep US margins and crush rates intact in the coming year.

In other markets, we noted smaller than expected acreage for HRW…somewhat supportive of the new crop, although lost in disappointing trade news in Iraq.

The corn report was not much changed from the posted expectations. The higher former crop area and unchanged yields drove the higher production down to the bottom line. Higher ethanol use was recognized but offset by slightly lower exports. No qualms with a 47 million bushel increase in ending inventory.

Stocks were 40 million bushels above trade estimates… so not much there.

The general bias is for profit taking after the report, better rains for this weekend in South Africa would help this bias.”

Mike

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At 8:45 a.m.:

Investors clear USDA reports on Wednesday

Mike


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