Closing Market Comments January 25, 2022

Today’s Prices

Grain markets finished mixed again today as there is no clear bullish or bearish stores that could take prices either way.

Grain Market News

South American Precipitation Forecast

At this point South American weather looks mostly favorable.

The 2-week forecast shows adequate rainfall in all of Brazil in both weeks.

Argentina looks to get rains in the northwestern half of the belt, which is an area that missed out last weekend.

The second week still has some moderate rains in the forecast.

Vegetation health Index

For a reference point, Argentina would be to the south and west.

In Brazil almost the entire growing region has good growing weather.

It was just southern Brazil where we see some of the tan and orange colors where crops are below a year ago level.

60-Day Observed Precipitation

We’ve seen 2-4 inches of melted precipitation falling across the northwestern belt.

In fact, the dark green is 4 inches plus, those totals fell in some fairly serious drought areas.

8-10 inches of rain has fallen across most of the Ohio valley with 10-15 inches of rain in the lower Mississippi valley and lower gulf region.

Most areas have seen good precipitation through December and January.

60-Day rainfall: % of Normal

We have gotten well above normal precipitation in the last 2 months in the northern plains and northwestern belt.

We had 4-6 times the normal amount in much of the central Plains including central and western Nebraska and northwest Colorado.

Drought Monitor

This map shows the class change when we take class change, anything in tan or yellow is where the drought has gotten worse and anything in green or blue is where drought conditions have improved.

Over the last 8 weeks, we’ve seen tremendous improvement in the Mississippi valley into the Ohio valley.

We have also seen improvement over the northern plains and northwestern belt.

The one only area with a drought increase is in areas of the western and southwestern plains.

Sea Surface

La Nina is cooler than normal sea surface temperature in the equatorial Pacific Ocean.

We’ve been in this condition on this map going back about a year but actually we’ve had them going on two years now.

Many weather professionals believe that La Nina or cooler than normal ocean temperatures in the Pacific temperatures are responsible for the poor growing conditions in portions of South America over the past 2 years and the poor conditions in the U.S. and drought conditions in the plains.

Grain Market News

Weekly Ethanol Production

Today’s chart shows that production has improved dramatically from the holiday and extreme bitter cold that reduced production.

We are still running slightly below the level needed to reach USDA’s corn use estimate.

Our year-to-date production is down 4.1%, USDA is projecting that corn use this year will be down 1%, so we are running behind the pace.

Weekly Stocks of Fuel Ethanol

Weekly stocks were disappointing as they surged higher at 25.087 million barrels per day.

That’s a record for this week and our stocks are now 2.5% above the year ago level.

U.S. and Brazil Fob Premiums

March Corn Chart

Corn prices do remain in a very gradual uptrend off of the December lows.

Overall corn prices remain mostly sideways over the past month or so.

We expect more trading within this range in the weeks to come until there would be fresh news in the marketplace.

With that in mind we have overhead resistance at 6.85-6.88 and chart support at 6.48.

Today’s high this morning at 6.81 was closer to the upper end of that range.

March Soybean Chart

Soybeans also in an uptrend and we have been challenging that uptrend over the past few days.

Overall, we see soybeans also likely stuck in a range 15.37-15.48 in the upper end and 14.65 is the lower end of the range.

Today’s prices were closer to the lower end.

March KC Wheat Chart

Wheat prices are now testing overhead resistance.

We believe this resistance will be broken and probably soon.

The funds are long corn and beans and short wheat.

With South American harvest approaching its possible the funds could start to lighten up on the long positions by selling and lighten up on the short by buying wheat.

This could push wheat above the overhead resistance.

This is no place to be making sales in wheat.

Questions or Comments