Thu, 08 Jun 2023

CHICAGO, March 25 (Xinhua) -- Chicago Board of Trade (CBOT) agricultural futures ended mixed in the past week, as the Federal Reserve raised interest rates by 0.25 percentage points as expected, Chicago-based research company AgResource noted in a weekly roundup on Saturday.

The rapid collapse of several U.S. banks and Credit Swiss showed the fragility of segments of the world economy. Risk off is the theme until there is clarity and confidence in the U.S. and European Union banking systems.

CBOT corn ended higher. Funds' net short position, the first since mid-2020, is being covered as the U.S. market finds enlarged export demand and early planting is unlikely in the Midwest. Weather will play a larger role in price discovery beginning in early April and closer attention will be paid to Northern Plain's snow cover, dryness in the Western Plains, and heavy rainfall in the Midwest.

Otherwise, historic yield loss in Argentina, projected collapse in Ukrainian seeding this spring and regionally delayed safrinha planting in Central Brazil opened the potential for strong U.S. export demand well into late 2023. AgResource suggests that any build in global and exporter stocks in 2023 hinges entirely on Midwest weather and yield performance, and not until favorable June-July weather can be confirmed will weather premium be fully extracted. It is time to keep an open mind with a new growing season ahead.

CBOT wheat ended lower. Fundamental weakness since late winter has been a function of larger-than-expected stocks in Europe and Russia, and this supply will struggle to find consumption as importer harvests near.

The 2023-2024 U.S. wheat balance sheet is getting tight, and AgResource's outlook is turning more bullish at current prices. AgResource maintains that a decently sized correction in global and exporter stocks will occur in 2023-2024 if record Russian yields cannot be repeated.

Soybean futures fell to steep losses throughout the week on liquidation related to the global financial market concern. Nearby futures broke through key technical levels during the week and found support just above 14.00 U.S. dollars.

Selling in CBOT soybean futures was jointly driven by financial market concerns and continued erosion in Brazilian FOB quotes. The Buenos Aires Grain Exchange (BAGE) held the Argentine soybean crop estimate unchanged from the previous week at 25 million metric tons. However, the exchange stated that it was prepared to make additional cuts in the future.

The latest U.S. Department of Agriculture (USDA) estimate was at 33 million metric tons, and AgResource expects USDA to lower the estimate to match the BAGE figure in the April report. The world balance sheet of soybeans will further tighten.

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