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Today’s Prices
Grain markets higher today. The outside markets were supportive but threatening South American weather is the biggest driver in the grain markets right now.
Grain Market News
Observed High Temperatures
South American weather is the primary driver and it is the conditions in South American that are determining our price direction for grain. High temperatures in Argentina mostly in the 90’s and low 100’s. That extended north and northeastward into southwestern Brazil and Paraguay as well.
Wed High Temperatures
Today’s high temperatures again forecasted to be mostly in the 90’s with a few low 100’s in portions of northern Argentina. The combination of heat and dryness is beginning to take toll on crop condition ratings.
Temperatures Anomaly
The temperatures forecast from now through Dec 30th shows much above normal temperatures for Argentina and that extends into portions of Paraguay, Uruguay, and southwestern Brazil as well.
SA 2-Week Precipitation Forecast
Unfortunately, there is not much rain in the forecast. Southern Brazil, Argentina, Paraguay, and Uruguay all look fairly dry in the first week of the forecast. The second week of the forecast has a little bit more rain in portions of central Brazil and extreme southern Argentina but the forecast is still calling for below average precipitation and above average temperatures.
Root Zone Soil Moisture
This map shows the root zone soil moisture drought Indictor which is about the top 3 ft of soil. Areas from southern Brazil, Paraguay, Argentina and Uruguay all showing that significant soil moisture loss and developing drought. Through Nov and even into early Dec there wasn’t a lot of talk about crop stress or crop losses but as the dryness and heat continue, we’re now starting to see the vegetation health decline. On the right map is the vegetation health change from the previous week and this is from Dec 16th. You can see crops declining in southern Brazil and consistent with where we see the most significant moisture shortages. This map will be updated tomorrow and we’re likely to see this expanding southward into much of Argentina and Uruguay as well. Bottom line, there is not much rain falling, temperatures are heating up, crops are being stressed, and crop production estimates are on the decline and that leads to higher prices at the Chicago Board of Trade.
Grain Market News
Argentina: Corn Production
This map shows Argentina’s corn production. The vast majority of corn in Argentina is produced straight west of Uruguay. In fact, about 75% of their crop is grown in that central area.
Argentina: Soybean Production
Similar to corn, 75% of more of the crop is grown in the central region and straight west of Uruguay. In Argentina the crop region is pretty much the same area for both corn and beans.
Weekly Ethanol Production
Ethanol production declined, a pretty significant decline to 1.051 mbd. But that is still well above the year ago level and year to date ethanol production is running about 8% above last year. USDA is estimating corn use for ethanol will be up 4.4%. It is almost a certainty that USDA will need to raise its corn use for ethanol in future crop reports.
Weekly Stocks of Fuel Ethanol
A chart showing our stocks for fuel ethanol show they declined to 20.716 million barrels. This leaves stocks well below last year and well below pre-pandemic levels. Stocks of fuel ethanol are very tight in comparison to the amount we’re using on a week to week and month to month basis.
March Corn Chart
Corn rallied to $6.06. That’s a new high for the move and the highest level going back to about the first of July. This chart looks very good. We’ve been in a very gradual uptrend over the last couple of months and we’re breaking out to the upside. The market looks like it wants to accelerate to the upside based on the threatening South American weather. Technical indicators are in the overbought range but still room to move. As of today, there is no sign of topping action from the chart or the technical indicators.
January Soybean Chart
Soybeans also exploding to the upside reaching $13.33 on the Jan contract. That is the highest price level going back to about the first of Sept. Similar to corn, the bean market this accelerating to the upside. Technicals are overbought but no sign of topping action from the chart or technicals in beans.
March KC Wheat Chart
Wheat prices no exception, exploding to new highs for the move up to $8.56. This opens up the door to the previous highs at $8.92 that were established back in late Nov and early Dec. All three of our marketing have charts accelerating to the upside with technical indicators, at least not yet, showing any sign of topping action.
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