Today’s Prices
Grain markets finished mixed today with no clear driving news story to push prices significantly higher or lower.
Grain Market News
South American Precipitation Forecast
Today’s forecast was supportive.
It calls for mostly dry conditions in Argentina in week 1 and week 2.
Brazil looks to be in very good shape except for the extreme southern tip.
Paraguay looks to be getting some precipitation in week 1 and week 2.
Temperature Anomaly
We see a similar ongoing pattern when it comes to temperatures.
From today through January 6th we see above normal temperatures for Argentina edging into Paraguay, Uruguay, and southern Brazil.
Brazil, as a whole, has most of the growing region in slightly below normal temperatures.
U.S. Radar
This morning there was a good batch of precipitation in some of the dry areas of the plains.
Northeast Colorado and much of Nebraska with much of that still ongoing.
7-Day Precipitation Forecast
This shows some of that precipitation moving to the northeast and cutting through South Dakota, northwest Iowa, and Minnesota.
Most of the rain and snow with this system would be considered favorable.
We also have a large area of heavy rain from the lower Mississippi Valley through the southeast.
Unfortunately, there is not much precipitation for the southwest plains with ongoing drought in place.
60-Day Precipitation % of Normal
Over the past 60 days we’ve seen very good precipitation in the northern plains extending into the northwestern corn belt and portions of the western belt.
Its also easy to see the ongoing drought in the southwestern plains.
Drought Monitor Class Change
We can see that drought has gotten worse in portions of the western plains and a little bit of development in the far eastern and northeastern belt.
The northern plains, central corn belt, Ohio valley, and the Delta has all improved.
There are more areas that are improving than areas declining.
Grain Market News
Weekly Ethanol Production
Ethanol production was down sharply to 963 thousand barrels per day.
That’s down sharply from the previous couple months but also well below the level needed for the current corn use forecast.
We don’t want to get overly bearish; it was the week of Christmas which usually shows slower activity and had extremely cold weather.
Weekly Stocks of Fuel Ethanol
Despite the big reduction in ethanol production, stocks still increased to 24.645 million barrels.
That is certainly a negative factor but keep in mind with the extremely hazardous weather and blizzard conditions fuel ethanol may have been building up somewhat as transportation was limited.
Western IA Ethanol Plant Returns
Looking at a 6–7-year history we can see our current margins are very low, about as low as we’ve seen.
December Corn Chart
Corn prices did not make a new high today, but we are perked near the recent highs.
The chart is in an uptrend but with prices up near overhead resistance and technical indicators about as high as you can get them, we are not buyers of corn.
If the market would sit back, current chart support would be around 6.50-6.60.
November Soybean Chart
Soybeans posted a new high today up to 15.24.
The new configuration shows the uptrend that has been in place from the lows at 13.71.
Prices have now rallied a $1.53 off the harvest lows.
This is not a place to be buying soybeans but a good place to be making catch up sales.
December KC Wheat Chart
Wheat prices down significantly toady but the overall trend is still up.
We came up against overhead resistance from a downtrend line and at this time that level has still been able to prevent the market from breaking out to the upside.
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