1/20/2023

A quiet day of two-sided trade to end the week with no market moving news or headlines. Managed money and funds are in control and appear to be trading between themselves and, essentially, the only thing supporting current price levels. We had another confirmed sale announcement this morning of 220,000 tonnes of soybeans for delivery to unknown during the 2022/23 marketing year. Trade has been defensive this week after forecasts continually increased chances of precipitation in Argentina and the radar appeared to confirm those forecasts at the mid-day point today. Last week was definitely one of the better weeks we have seen for export sales. Corn outperformed trade estimates with 1.132 mln tonnes sold and soybeans came in near the top end of the range at 986k tonnes sold. Marketing year to date, corn export sales are short of the pace needed to meet the USDA target by 252 million bushels versus 255 million bushels last week. Soybean sales are 52 million bushels short of their pace needed to meet the USDA target versus 43 million bushels last week.

Coming off of our harvest lows, funds have built a record long position in soybean meal. After coming within spitting distance of fresh 10 year highs just over a week ago, the nearest soybean meal contract has already fallen around $50/ton off of last week’s high marks. Funds have been the only thing driving this market and have no one to unload their length onto. Almost a textbook head and shoulders pattern developing.