Closing Market Comments January 31, 2022

Today’s Prices

Grain prices finished mixed today as recently prices have been firm but unable to break out into new highs.

Grain Market News

South American Precipitation Forecast

There are no major fresh weather developments.

South America forecast includes mostly favorable weather in Brazil for both weeks.

Argentina only has light rains in the southwest in the first week but better rains in the second week.

South America Vegetation Health

Last year drought took place in west central and southwest Brazil, Paraguay, and Argentina.

This year shows Brazil mostly favorable.

Last year Argentina seen drought in the far north and northwest and this year drought conditions across nearly the entire growing region of Argentina.

Soil Moisture

Argentina’s growing area has had a dramatic improvement in soil moisture recently, at this time soil moisture is mostly adequate.

Most of Brazil is in good shape as well, except for far southern Brazil.

Brazil/Argentina Corn Exports

The U.S. window for exports will be February through maybe May.

Bottom line is to reach USDA exports it is critical that U.S. exports are large in February through May.

Grain Market News

NWS Long-Lead Forecast

Most of the U.S. corn and bean belt is looking at average to slightly above average temperatures and precipitation.

Overall, this does not indicate any major threat during the planting season.

In the June-August timeframe, the heart of growing season, national weather service is forecasting slightly above normal temperatures and precipitation.

U.S. Temperatures

Below zero temperatures from eastern Colorado, northwestern Kansas, and most of Nebraska.

But that area has snow covering on the ground.

In southern Kansas into Oklahoma and the Texas panhandle where there are no snow cover temperatures are generally in the single digits or teens.

U.S. Winter Wheat Production

Kansas is the largest winter wheat producer at 27% of the U.S. winter wheat crop.

Western IA Ethanol Plant Returns

As corn market has rallied, ethanol plant returns have fallen near breakeven.

Typically, as long as plants can cover their costs they will continue to run.

March Corn Chart

Corn prices did post a new high for the move today at 6.80, challenging the highs from two weeks ago.

Without bullish news this market could slip back with chart support coming in around the 6.60 level.

Technical indicators did hook a little bit today as prices closed at 6.79, about 9 cents off the daily high.

March Soybean Chart

Soybeans also posted a new high for this move and are now challenging previous highs.

Our attitude on soybeans is the same, we believe this will provide major overhead resistance unless we get bullish news.

With no news there is going to be a tendency for this market to slip back towards chart support.

Chart support comes in around the low $15 area.

March KC Wheat Chart

Wheat prices challenging the highs that were set yesterday and were near the upper end of the range.

We are not bearish wheat but after a run from 8.03 in early January to 8.83 yesterday, that’s an 80-cent rally in 3 weeks.

Char support at 8.40-8.45.

Questions or Comments