Closing Market Comments January 31, 2022

Today’s Prices

Grain prices finished mixed today as recently prices have been firm but unable to break out into new highs.

Grain Market News

South American Precipitation Forecast

There are no major fresh weather developments.

South America forecast includes mostly favorable weather in Brazil for both weeks.

Argentina only has light rains in the southwest in the first week but better rains in the second week.

South America Vegetation Health

Last year drought took place in west central and southwest Brazil, Paraguay, and Argentina.

This year shows Brazil mostly favorable.

Last year Argentina seen drought in the far north and northwest and this year drought conditions across nearly the entire growing region of Argentina.

Soil Moisture

Argentina’s growing area has had a dramatic improvement in soil moisture recently, at this time soil moisture is mostly adequate.

Most of Brazil is in good shape as well, except for far southern Brazil.

Brazil/Argentina Corn Exports

The U.S. window for exports will be February through maybe May.

Bottom line is to reach USDA exports it is critical that U.S. exports are large in February through May.

Grain Market News

NWS Long-Lead Forecast

Most of the U.S. corn and bean belt is looking at average to slightly above average temperatures and precipitation.

Overall, this does not indicate any major threat during the planting season.

In the June-August timeframe, the heart of growing season, national weather service is forecasting slightly above normal temperatures and precipitation.

U.S. Temperatures

Below zero temperatures from eastern Colorado, northwestern Kansas, and most of Nebraska.

But that area has snow covering on the ground.

In southern Kansas into Oklahoma and the Texas panhandle where there are no snow cover temperatures are generally in the single digits or teens.

U.S. Winter Wheat Production

Kansas is the largest winter wheat producer at 27% of the U.S. winter wheat crop.

Western IA Ethanol Plant Returns

As corn market has rallied, ethanol plant returns have fallen near breakeven.

Typically, as long as plants can cover their costs they will continue to run.

March Corn Chart

Corn prices did post a new high for the move today at 6.80, challenging the highs from two weeks ago.

Without bullish news this market could slip back with chart support coming in around the 6.60 level.

Technical indicators did hook a little bit today as prices closed at 6.79, about 9 cents off the daily high.

March Soybean Chart

Soybeans also posted a new high for this move and are now challenging previous highs.

Our attitude on soybeans is the same, we believe this will provide major overhead resistance unless we get bullish news.

With no news there is going to be a tendency for this market to slip back towards chart support.

Chart support comes in around the low $15 area.

March KC Wheat Chart

Wheat prices challenging the highs that were set yesterday and were near the upper end of the range.

We are not bearish wheat but after a run from 8.03 in early January to 8.83 yesterday, that’s an 80-cent rally in 3 weeks.

Char support at 8.40-8.45.

Questions or Comments

Closing Market Comments January 30, 2022

Today’s Prices

Grain markets finished higher today, part of the buying was a result of chart and technical buying.

Grain Market News

Argentina 2-Week Observed Precipitation

The darker blues are from 2.5-5 inches of rain which is covering almost all of Argentina’s growing region.

This may not be enough rain to completely end the drought, but this amount is certainly enough to stabilize the crops.

As you can see Argentina has received at or better than normal rainfall over the past couple of weeks

South American Precipitation Forecast

The 2-week forecast shows mostly lighter rains, .25-1.25 inches over the western half in week 1 of Argentina.

Good rains across almost all of Brazil.

In week 2 rains look like they could pick up again from 1-3 inches of rain.

U.S. Temperatures

Here in the U.S. traders have been monitoring temperatures to see if it will affect the hard red wheat winter crop.

Northeast Colorado through southeast Nebraska saw temperatures below 0 with single digits across the western half of Kansas down into Texas and Oklahoma.

If there is a risk it would be in southeast Colorado, southwest Kansas, into Oklahoma and Texas panhandle.

U.S. Snow Depth

Form northeast Colorado, northwest Kansa, into southern Nebraska there is generally 4-8 inches of snow on the ground.

That should help with some insulation from the cold temperatures.

7-Day Precipitation Forecast

Calling for mostly cool and dry conditions over the next week.

Any rain would be in the Gulf coast region.

The second week of the forecast is hinting at some precipitation that could fall from portions of southern and eastern Kansas into Oklahoma and Texas.

Grain Market News

Corn: Weekly Export Inspection’s

Corn exports were reported at 20.78 million bushels, down from the previous two weeks.

We should be seeing a general uptrend in exports at this time of the year.

Therefore, today’s lower exports were disappointing.

Soybean: Weekly Export Inspection’s

Soybean exports were very good, the last 2 weeks have seen inspections near record large for January.

Today’s export inspections at 68.17 million bushels.

We only need 22 million bushels weekly to reach the export forecast.

Wheat: Weekly Export Inspection’s

Wheat came in very close to the level needed for the export forecast at 16.367 million bushels.

We needed 17 million weekly to reach the estimate.

Our year-to-date estimate is down 2.9% and USDA is estimating 3.1%.

March Corn Chart

Corn made a new high for this move up to 6.87.

Technical indicators are now back into the overbought area.

This is not a place to be buying corn, but a place to be making sales.

March Soybean Chart

Soybeans also made a new high for this move up to 15.38 in today’s trade.

We are now challenging the recent highs in the 15.37-15.48 range.

As prices approach the upper end, we do not want to be buyers of soybeans.

March KC Wheat Chart

Wheat posted a new high for the move at 8.83, its now testing the highs posted back about a month ago at 8.94.

The good news for wheat is from early October through January we had been trending lower, but late last week we broke through the downtrend and moving averages and the wheat market is now pointed upward.

Our downtrend line and all moving averages in the 8.45-8.50 range now become chart support.

Questions or Comments

Closing Market Comments January 27, 2022

Today’s Prices

Prices finished mixed today following an up and down week in the grain markets.

Weekly Price Summary

Grain Market News

South American Precipitation Forecast

Weather is becoming less of a factor now that the Argentina drought is ending.

Not only did we get rain a week ago, but additional rains are expected in Argentina.

The second week shows lighter rains in Argentina, maybe a half to a little over an inch.

Brazil continues to get mostly adequate rainfall.

Argentina Radar

As of this morning the next rain system was developing with moderate to heavy rains in the southern half of Argentina.

These rains were moving to the North.

7-Day Precipitation Forecast

Moderate to heavy rain could fall across the gulf coast and northward into the central Mississippi valley.

Not much rain to the north but we could see some snow in South Dakota, Nebraska, and moving across Iowa.

3-Day Snowfall Forecast

6.8 inches of snow could fall across the South Dakota and Nebraska border and 4-6 inches from central Iowa into the southern Great Lakes.

Grain Market News

Monthly Russian Wheat Exports

Even though Russia invaded Ukraine and the U.S. and much of the world was going to put sanctions on Russia.

It’s worth noting that Russian exports in October-November were record large for the Fall timeframe.

December Corn

We are relatively high, higher than we were last year and much higher than 2 years ago.

At this time the market is not concerned about running out in this crop year, therefore we would not be surprised to see the markets relatively flat and choppy in February.

November Soybeans

Our soybean stocks are tight which is keeping prices relatively high but does not appear that we will run out.

We believe that a flat or choppy market may remain in place as we move through February.

March Corn Chart

Corn prices have been very choppy over the last couple of months.

Overall, there is a very gradual uptrend in place.

We believe the most likely scenario is that corn will remain range bound.

March Soybean Chart

Soybeans prices also extremely choppy.

We believe the upper end of the range has been established and the lower end around 14.65.

March KC Wheat Chart

Wheat prices are attempting to break out.

Yesterday we traded above the 40-day moving average and today we have an outside day above those chart and technical figures.

This market seems like a long-term bottom is forming with overhead resistance at 8.94.

Questions or Comments

Closing Market Comments January 26, 2022

Today’s Prices

Grain markets finished higher across the board today on solid export sales numbers.

Grain Market News

Corn: Weekly Export Sales

Corn sales weren’t massive but at 910 thousand tons it was well above the level needed to reach the USDA forecast.

This was considered supportive.

U.S. Corn Exports 2022-23

USDA is estimating that corn exports will be down 22%.

Export inspections and accumulated exports down 30-35% from a year ago.

Outstanding sales are down 52.0% from a year ago.

Total commitment is down 45% from a year ago.

Soybeans: Weekly Export Sales

Soybeans had a very good number at 1.146 million metric tons were sold last week. Of that 940 thousand tons to China.

Today’s weekly export sale well above, in fact about 5 times the level needed.

U.S. Soybean Exports 2022-23

USDA is estimating that Soybean exports will be down 7.8%.

Export inspections and accumulated exports down 2-4% from a year ago, which is better than the estimate.

Outstanding sales are up 41.8% from the year ago.

Total commitment is up 5.4% from a year ago.

Wheat: Weekly Export Sales

Wheat had a very good week at 500 thousand tons sold.

That’s just shy of double the level needed to reach the USDA forecast.

U.S. Wheat Exports 2022-23

USDA is estimating that wheat exports will be down 3.1%.

Export inspections and accumulated exports down 3.5% from a year ago.

Outstanding sales are down 10% from the year ago.

Total commitment is down 6% from a year ago.

Grain Market News

South American Precipitation Forecast

Weather shows very seasonal rain across almost all of Brazil in the first week, and a little bit lighter in the second week.

In Argentina another 1-3 inches of rain over the next week and then some lighter rains.

Argentina 7-Day Observed Precipitation

The growing region in Argentina, we can see most areas have seen 1-3 inches of rain.

Argentina 7-Day Precipitation Forecast

Looking ahead at the next 7 days we can see when we highlight the growing region in Argentina there will be 1-3 inches of rain.

March Corn Chart

Corn closed at 6.83 today.

Corn has been stuck in a sideways range for the last 5 months or so.

Within that range we work higher in August-September, lower into November-December, and now working back higher.

Recently the market has gotten very choppy, down 30-40 cents up 30-40 cents and so on.

Overhead resistance at 6.88 and chart support at 6.61.

March Soybean Chart

Soybeans have been stuck in mostly a sideways range over the last 6 months.

We have been working higher in that range with prices today at 15.23.

March KC Wheat Chart

Wheat closed at 8.65.

Wheat recently has tested long term chart support that’s been in place back to June.

Today for the first time the market broke through overhead resistance, breaking through the downtrend line and the 40 day moving average.

Questions or Comments