To zoom in on a phone, tablet, or touch screen, place two fingers on screen and move them apart. To zoom out pinch fingers together.
Today’s Prices
Grain markets closed sharply lower today as a lack of fresh bullish news and has the market setting back the funds’ lightning on their long positions.
Grain Market News
Observed High Temps
Argentina will remain hot until that rain starts to move in late this weekend and early next week. In fact yesterday’s high temperature in most of Argentina’s production area was in the 102-107 range. That heat spilled over into southern Paraguay, western Uruguay, and even portions of southwest Brazil where temperatures were in the upper 90’s to lower 100’s.
SA 2-Week Precip Forecast
But the relief we talked about is still showing up on the other map in the first week of the forecast with some pretty good rains 1-3 inches in most of Argentina’s growing area. And on the right side of your screen the second week of the forecast, which goes almost to the end of January, we see some additional scattered rainstorms in Argentina but some pretty good rains in southern Brazil as well. The forecast has been calling for the rains for about the last 10 days and has been very consistent. Therefore the market is gaining confidence that we will get some drought relief next week. If those rains do not become widespread then the market will very quickly start to rebound. But again the trade is becoming more confident in the rain now that it is only 3-4 days away.
Soil Moisture Change
If we look at a moisture change map, you can see that relief in Argentina where the soil moisture is expected to improve in the next 7-8 days and into portions of Uruguay as well.
Grain Market News
Brazilian Soybean Exports
We mentioned that it will take time for US larger exports to develop. Part of that is because Brazilian exports of soybeans are going to be large. Even with a smaller crop, their exports are going to be large in the March, April, May, June timeframe. As you can see on this map a strong seasona as Brazil begins harvest in January and then ramps up harvest in February, which results in larger bean exports in March, April, May, and June. It then starts to tail off fairly quickly. Smaller Brazilian and Argentina crops means that exports will start to tail off quickly as theyll run lower on supply therefore the US could benefit with larger exports in the July, August, September timeframe which would extend into the new crop in Fall as well. But this will take time to develop.
Corn: Weekly Export Sales
Taking a look at today’s weekly export sales report with the corn numbers. Corn export sales came in at 458 tmt, which was up from last week but still below needed to meet USDA expected forecast. We are expecting exports to be fairly good towards the late January-May timeframe as the bulk of Brazil’s corn crop, the safrinha corn crop, won’t be available until next summer.
Soybean: Weekly Export Sales
Turning to our weekly soybean export sales, they also improved from last week up to 736 tmt which was nearly double the level needed to reach the USDA’s expected forecast. Soybeans appear to be on track to reach USDA estimate and if South America continues to lose production due to the dryness it’s very possible that we will exceed USDA forecast if we get bigger exports in the late spring and early summer like we did in 2019 and 2020.
Wheat: Weekly Export Sales
Turning to wheat export sale numbers, wheat also improved from last week to 264 tmt, which still remains below the level of 332 tmt needed to reach USDA export forecast. Wheat exports very easily could improve in the late January-March timeframe as supplies start to dwindle in the Europe regions.
Weekly Ethanol Production
Ethanol production dropped significantly down 4% from the previous week and is now slightly below the level to reach the USDA’s elevated corn use number that was printed yesterday. With driving miles very close to pre covid levels, we do expect ethanol production to improve in the weeks ahead. We should be able to reach and exceed USDA’s estimate.
Weekly Stocks of Fuel Ethanol
Coming out in yesterday’s report was that ethanol stocks increased by over 7% from the previous week. That is a huge increase in stocks, especially considering the production levels were down. Stocks of fuel ethanol are not burdensome but now they are getting back into a more normal range given the current gasoline consumption.
March Corn Chart
Corn prices had a very disappointing day on the charts, yesterday we came down in tested support where the uptrend line comes into play and also the 40 day moving average. Today the market pushed below that level and closed near the daily low. Certainly has taken a move towards the downside over the last few days, and could be some additional downside risk indicators in the future.
March Soybean Chart
Soybeans were sharply lower today, but it was an inside day, we did not take out yesterday’s high or low. We have not posted a new high since last week’s price at 14.15 and that has the charts starting to look a little bit negative. Today’s disappointing close turned the technical indicators lower so there are additional downside risks, at least in the near term for soybeans with the next level of major chart support down at the 13.34 level.
March KC Wheat Chart
Wheat prices had a big down day today and now we are challenging the lows that were posted last week at 7.54. We are not overly bearish in wheat, in fact wheat may be pushing prices down below fair value. But in selling corn and beans spilling over into the wheat and pushing prices sharply lower today.
To return to the previous page on your mobile device, click the back arrow in the bottom tool bar.