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Today’s Prices

Grain markets finished mixed today with a 3 day weekend on schedule and right in the heart of South America’s growing season. March corn futures finished 9 cents higher at 5.96 per bushel. New crop December corn fwas up 1 cent at 5.98.  March Soybeans finished 8 cents lower at 13.70 and new crop November soybeans finished 12 cents lower at 12.93. KC March wheat finished 15 cents lower at 7.45 and Mpls March wheat finished 17 cents lower at 8.78. 

Outside Markets were very mixed today crude oil, quite supportive, up $1.79 at 83.91 per barrel, Natural gas down 2 points at 4.25, Gold market down 3.60 at 1,818, U.S. Dollar Index up 39 cents at 95.17, and the stock markets are currently 332 points lower with the Dow Jones at 35,782. 

Live stock markets were mixed as well with February live cattle up 98 cents at 137.98, March Feeder Cattle down 35 cents at 166.38, and February hogs up $3.05 at 80.90. 

Weekly Price Summary

Grain Market News

Observed High Temps

Even though there is rain in the forecast next week we cannot ignore the extreme heat that is encompassing all of Argentinas growing area. Yesterday’s temperatures were 104-105 on the low side and 107-109 on the high end. Those 100 degree temperatures extend into parts of Paraguay, extreme southern Brazil, and Uruguay. Taking a look at the entire area of high temps includes a very large area of extremely high temps. 

SA 2-Week Precip Forecast

But on the bearish side is the change in the forecast that continues into next week. The first week of the forecast, Jan 14-22,  shows good rains 1-3 inches in most of Argentina’s growing areas and scattered rains in Southern Brazil. The second week of the  forecast extending to the end of the month shows additional scattered rains in Argentina and 103 inches in southern Brazil. If this forecast is correct the dry areas will be shrinking in much of South America and will get a break from the extreme temperatures. The key to trades for next week is how much rainfall and where the rainfall in South America as we come into the trades Monday night and Tuesday morning. 

90-Day Precipitation – % of Normal

Here in the US, weather is not a major factor but is impacting Hard red winter week. But we will start to watch the US weather more closely as we move from January to February. Keep in mind that down in the Gulf coast region corn planting will begin in March. Over the past 90 days this map shows the percent of normal rain. It’s very clear to see the dryness expanding in the southern, central, and western plains. Much of the southwestern area has seen almost no precipitation over the last 90 days. At the same time, conditions are drying out in the southern plains, but conditions have been improving in the northern plains and the pacific northwest. 

U.S. Drought Monitor

The precipitation patterns are reflected in the drought monitors released on January 13th. Drought conditions have been removed in most of the northwestern and eastern portions of the northern plains as well. But droughts continue to not only intensify but expand in the southern and southwestern portions of US plains. 

U.S. Drought Monitor Class Change

We can see that expansion in the map that shows the change in the drought monitor from 1 week ago. We can see that much of the southern and central plains has seen droughts expand. Anything in yellow or tan is where droughts are worse and anything in green/blue where droughts are improving. We continue to see droughts expanding in the central and southern plains. 

U.S. Drought Monitor Change – 13 Wks

When we look at the change in the drought monitor over the past 13 weeks, 3 months, we can see the drought continues to expand and intensify in the central, southern, and western plains. Drought has been improving in the northern plains and the pacific northwest. There are concerns that the drought will continue to expand and encompass a larger portion of Kansas, Missouri, Southwest Iowa, or Nebraska. This is the area that will be monitored as we head towards Spring. 

Grain Market News

U.S. Corn Ending Stocks

Taking a look at a seasonal chart showing US corn stocks, This current stock year 2021-2022 that 6 months ago, back in August USDA was projecting US ending stocks at 1.242. But that trend has been increasing just slightly and this week’s ending stock projected at 1.54 billion bushels. Again pointing out that is not acceptance, but the trend has been towards increasing stock and that is not what the funds want to see when they are positioned long. 

U.S. Soybean Ending Stocks

Last summer USDA was projecting this year’s ending stock would be 140 million bushels, but that has also been increasing and this week’s estimate came in at 350 million bushel. Seeing a trend in increasing stock. These stocks are not burdensome and not accepted, but are increasing and again that is not a supportive item when it comes to the fund position. They are long and want to see decreasing U.S. stocks. 

U.S. Wheat Ending Stocks

A similar pattern is seen in wheat stocks. In October USDA estimated U.S. wheat ending stock at 580 million bushel. That has been gradually increasing as this week is at 628 million bushel. Still relatively tight with the same comment that wheat stocks are not decreasing.  The funds, when they are long, want to see decreasing stocks not increasing stocks. This is overall why we saw funds selling this week and saw grain markets lower with the exception of corn markets. 

March Corn Chart

Looking at today’s corn chart they are at a downtrend, not a sharp downtrend, but the highs were close to 6.17 about two and a half weeks ago. Since then the market has been trending downward. We did close higher today but didn’t make a big change in the chart. Corn prices have come down toward chart support, a low that would hit about a week and a half ago at 5.84. That price needs to hold or the funds could see some additional selling early next week . Right now we are talking about the chart and technical picture, keep in mind that South American weather will be a key factor Monday night into Tuesday morning when we come back to work following a 3 day weekend.  

March Soybean Chart

Taking a look at the March soybean chart, soybean prices have also turned lower recently off of the high posted a week ago. Today we made a new low down to 13.63 with the next level of chart support at 13.44. Technical indicators are pointed downward, even though we are not bearish in the long term, in the short term the trend turning lower could have the funds selling off a portion in the long position if we don’t get bullish weather news come Monday night into Tuesday morning. 

March KC Wheat Chart

The KC wheat chart is clearly in a downtrend with another new low. This market has been hit extremely hard over the last 2-3 weeks. Wheat prices are now down nearly $1.50 based off of the high prices posted at the beginning of December. We believe that wheat prices are now undervalued and have gone down too far. We need a little friendly news to turn the trend and spark in  the wheat market. It wouldn’t take much, as far as friendly news, to spark the trend and push the wheat market back towards the $8 level. 

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