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Today’s Prices
Grain prices steady to mostly higher today as wheat continues to lead the way to the upside on concerns regarding the Russia/Ukraine situation.
Grain Market News
Observed High Temps
Yesterday’s temperatures remain extremely hot specifically in Paraguay where temperatures were 106-109 yesterday. But if we look back at a couple weeks ago all of Argentina, Uruguay, southern Brazil, and Paraguay was in a heatwave. That has been reduced dramatically to mostly eastern Paraguay and neighboring portions of Argentina. The bulk of Argentina’s growing area is now seeing temperature highs in the 80’s.
15-Day Precip
Unfortunately the heat in Paraguay has been accompanied by continued dry weather but the bulk of Argentina has received 2-4”, even 3-5” of rain over the past week and a half. Looking at the precipitation compared to normal we can see almost all of Argentina has had at or above normal precipitation over the last week and a half. Only extreme northeastern Argentina would remain normal but that below normal does extend into Paraguay and southern Brazil. The dryness in central Brazil is not a problem because they had surplus rainfall during Nov and Dec.
Temperatures Anomaly
In addition to the rains in Argentina, temperatures expected to be at or slightly below normal over the next 8 days. The only exception would be in far northern Argentina and that extends into Paraguay as well. The bottom line is that the area the dryness has been reduced dramatically. Although we’re not expecting a large increase in crop production but crops stabilizing due to better rains recently and temperatures have cooled down substantially for much of South America. There are still a few pockets of heat but temperatures have cooled down for much of southern Brazil and Argentina and we expect that to continue going forward.
3-Day Snowfall Forecast
Here in the U.S. some significant snowfall is to take place in the western Plains. Western KS and eastern CO could see 4-6” of snow. That’s the dark green, possible 6-8” in portions of western and northwestern KS. This won’t change the overall drought outlook but any precipitation is welcomed in the southern and western Plains.
Snow Depth
We continue to monitor the snowpack. Right now a fairly significant snow pack in eastern ND, northwest MN with lightly snow in southern MN and northeast IA. Otherwise most of the U.S. corn and bean belt is snow-free at this time.
Grain Market News
Corn, Beans, Wheat Acres Combined
U.S. Planted Acreage
March Corn Chart
We’ve added a few red lines to show a point that when our technical indicators get overbought, we’ve seen a number of pullbacks. We can match up over bought technicals with temporary price highs 4 times over the past 4 months. The reason we’re bringing this up today is because we made another market high. Technical indicators are overbought and could be signaling a pullback in the corn market, at least temporarily. Back in Oct we had a 39-cent pullback, Nov 36 cents, Dec 34 cents, and here in Jan we’ve already has one pullback of 32 cents. With prices back towards the upper end of the range, technical indicators overbought we can’t rule out about a 30-cent pullback, back towards chart support. One red flag today was that the market surged up to a new high at $6.31 but we turned around and closed at $6.20, 11-cents off the daily high. That was enough to cause our technical indicators to hook today so certainly a couple minor red flags that could be hinting at a correction.
March Soybean Chart
Soybean prices saw a high last week at $14.29. We’ve been unable to take that out. Today we closed at $14.07. It does look like the soybean market is trying to put in a temporary top and the technical indicators have hooked just a little bit as well. We were able to close a little bit higher today but overall we don’t like the formation in corn or beans especially in the short term. The long-term trend is still up but the short term trend is hinting that we may be due for a correction.
March KC Wheat Chart
Wheat prices exploded to the upside today. Wheat has now rallied $1.06 in just a week timeframe and that is factoring in quite a bit of challenges and issues between Russia and Ukraine. Today’s close at $8.34 was sharply higher on the day but it was down 14-15 cents daily high. We’re not overly bearish in the grain markets but we do believe the markets may be due for a downward correction and the corrections over the last couple of months has been last 1-2 weeks.
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