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Today’s Prices
Grain prices finished mixed today. It’s been an up-week in the grain markets and prices taking a breather as we head into the weekend.
Weekly Price Summary
Grain Market News
Remap Satellite
A satellite image at midday shows bright white clouds which are high thunderstorm tops or heavy rain in southern areas of Argentina’s growing region. Areas in central, southern, and southeastern Argentina have seen very good rain but areas in northern Argentina have received very little or no rain and its still very hot.
StormPath Rainfall Accumulation
This map shows the rainfall that is projected over the next two day and you can see that rain in Buenos Aires, Argentina while high pressure remains locked in across Paraguay, southwestern Brazil, and northern Argentina. That is the area that has not seen rain and that is also the area that is still seeing hot temperatures.
Observed High Temps
The heat under the high-pressure ridge expanded and now encompasses not only northern Argentina but all of Paraguay and southwestern Brazil. The combination of dry soils and heat is not only causing crop stress but crop losses. The forecast last week indicated that most of southern Brazil and Argentina would be getting rains this week. Unfortunately for South American farmers about 60-65% of Argentina has received rain but about a third of Argentina has not. That heat and dryness expands north and east to southern Brazil and Paraguay. These are brutally hot temperatures in many areas under this high pressure dome.
U.S. Drought Monitor
Here in the U.S. weather is not a primary driver of grain prices but as we move into Feb and Mar the market will start monitoring U.S. weather a little more closely. Yesterday’s updated drought monitor that came out on Jan 20th shows drought not only in place but expanding in portions of the U.S. Plains.
U.S. Drought Monitor Class Change
Over the last 4 weeks we can see drought has increased in the yellow and tan. In some cases 1-2 categories in just the last 30 days. As we move through Feb and Mar the marketplace will be watching closely to see if the drought will continue to intensify in the southwestern Plains and then will see the drought expanding into NE, KS, MO, and southeast IA. That will be a primary discussion point as we move through the next 60-90 days.
Drought Monitor Last Year
The map on the right is from May 4th, 2021. Drought conditions were significant in the northern Plains. Primary ND and northern SD but the central and southern Plains for the most part were avoiding any major drought. We also had dry conditions in portions of IA and southern MN. At this time, January 18th drought monitor shows much more drought in the Plains states while things have improved in ND, MT continues to be in severe drought. We have scattered dry pockets across portions of the western belt but nothing severe. Keep in mind his in Jan 18th and the drought monitor can change significantly as the springtime and spring rains start to develop.
Grain Market News
Corn: Weekly Export Sales
Corn export sales increased nicely up to 1.091 mmt. That did include about 1.5 cargos to China and it was nearly double the level needed to reach USDA’s export forecast. U.S. corn is the cheapest feed grain in the world and it is likely we’ll see very good exports for an extended period of time from now through the winter and even into the spring.
Soybeans: Weekly Export Sales
Soybean exports were down slightly from last week at 671 tmt. It was still almost double the level needed to reach USDA’s export forecast. The drought conditions and expected crop losses in South American has South American prices rallying fairly quickly and it may allow the U.S. to become more competitive even as we approach the South American harvest.
Wheat: Weekly Export Sales
Wheat export sales increased for the second week in a row at 381 tmt. That’s above the level needed to reach USDA’s export forecast as well so a decent number for wheat as well.
March Corn Chart
Corn prices made a new high for the move today up to $6.18. We did close at $6.16 so we didn’t close above the previous high but nonetheless the market is challenging the high prices over the past 6-7 months. You have to go back to early June to find prices earlier than where we are today. The chart formation is pointed upward. Technical indicators are pointed upward. There is no sign of topping action in the corn market as this item. If corn can close above $6.17, $.6.33 and $6.40 would be the next target for nearby corn.
March Soybean Chart
Soybean prices posted a new high yesterday at $14.29 and had a small pullback today. As you can see on the chart, its still sharply pointed upward. Technicals are pointed upward as well so no topping action. If beans can get just a little friendly news next week, $14.45 the contract highs from early June would be the next target in the nearby Mar contract.
March KC Wheat Chart
Wheat prices pulled back today but wheat is also in a short-term uptrend. Technical indicators are pointed upward so it does appear from a chart and technical perspective that wheat may still have some additional upside potential. We have to break above the 40-day moving average which sits around $8.10. But if we do break through that level we could start to approach levels towards the overhead resistance and downtrend line around the $8.35-$8.40 type range.
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