Closing Market Comments December 6, 2022

Today’s Prices

Grain markets finished mixed today as an overall choppy, back and forth pattern continues.

Grain Market News

Unleaded Gasoline

Gasoline futures down to $2.12 per gallon, that’s less than half of where our gasoline was trading back in June.

Ethanol Swaps- January

Ethanol swaps is where most of the fuel ethanol is traded.

You can see ethanol prices have been dropping as well.

Down from $2.33 a gallon just over a week ago to $2.11 per gallon.

Grain Market News

South American Precipitation Forecast

Week 1 has most of Brazil in good shape except for extreme southern Brazil.

The second week shows continued good rains in the north but we could see some dryness in the south.

Argentina’s forecast has turned dryer over the last 24 hours.

There is still some rain in northern Argentina in the first week, but the second week has turned dryer.

Observed Surface High Temps

Argentina had temperatures almost everywhere in the 100s yesterday while Brazil is in the 80s.

Tuesday’s High Temperatures

Today’s forecast high for Tuesday shows more of the same.

90s and a lot of 100s across Argentina and mostly 70-80s in Brazil.

China Covid Chart

Their covid cases have ramped up challenging the record high number of covid cases from spring.

The good news is when we look at weekly deaths, even though cases are up, deaths are not rising.

If we continue to see a low death rate, that may allow them to lighten up or ease the covid restrictions.

U.S. Ending Stocks

This data is for the estimate for ending stocks, we are not going to do production because USDA does not adjust production estimates in the December report.

Corn stock estimates is 1.241 billion bushels, up about 60 million from last month’s report.

Soybeans average guess is 236 million bushels, up 16 million bushels from last month.

Wheat the average guess was 578 million bushels, up just fractionally from last month.

World Ending Stocks

For corn the average guess was 300.9 million metric tons, virtually unchanged from last month.

Soybeans at 102.2, unchanged from last month.

Wheat stocks at 267, down just a fraction from last month.

December Corn Chart

Corn had a new low posted today at $6.35, keeping the intermediate term down and the short term down as well.

Technical indicators are now oversold, no sign of a bottom yet.

November Soybean Chart

Soybean prices had a good day with a nice rally challenging some previous highs this morning.

Technical indicators have been chopping back and forth in a neutral range, todays rally did allow them to hook to the upside.

Overhead resistance at $14.84 and chart support at $14.40.

December KC Wheat Chart

Wheat prices like corn made a new low for the move today to 8.21.

That comes close to the summer low posted in August at $8.11.

Technical indicators at zero and this market is likely in the process of finding a bottom.

Overhead resistance around the $9 level.

Questions or Comments

Closing Market Comments December 5, 2022

Today’s Prices

Grain markets finished lower across the board today, outside markets were very negative.

Grain Market News

South American Precipitation Forecast

Argentina continues to have below normal precipitation, and some extends northward and eastward into portions of Uruguay, Paraguay, and southern Brazil.

The second week does show some better rains for Argentina but there could still be some pockets in other areas of Paraguay, Uruguay, and extreme southern Brazil.

The bulk of Brazil looks to have good rains in week 1 and week 2.

Temperature Anomaly

Temperatures mostly favorable in Brazil, some areas to the north a little cooler and some in the south little warmer.

In Argentina where there is dry conditions, temperatures look to be above to much above normal over the next week.

Observed Surface High Temps

Argentina’s growing region has temperatures yesterday in the mid and upper 90s across almost all of Argentina.

Those temperatures may be even hotter this week with 100s very possible.

Monday’s High Temperatures

You can see if we highlight Argentina’s growing region, mid upper 90s and a lot of 100s are likely today.

We could see on and off 90s and low 100s right through the end of the week.

NOAA


Anything negative is below average or cooler than normal ocean water and anything a plus number, above zero would be warmer than normal.

Below normal is considered La Nina and above normal is El Nino.

The national weather service is predicting that La Nina conditions are peaking now and by the time we get into March or early April, sea surface temperatures in the equatorial pacific ocean could be back to normal.

Grain Market News

Corn: Weekly Export Inspections

Corn inspections did rally nicely up to 20.6 million bushels.

That’s good news but keep in mind we need 50 million bushels per week to reach the USDA forecast.

 Our year-to-date exports are down 32.7%, USDA is projecting exports to be down 13%.

Soybean: Weekly Export Inspections

Soybean inspections came in at 63 million bushels, that’s down from over 80 million bushels last week and also the lowest number over the last 8 weeks.

It is above the level needed.

Our first 3 months of our marketing year, soybeans are 10.9% below the year ago level, USDA is projecting exports to be down 5%.

Wheat: Weekly Export Inspections

Wheat at 12.296 bushels, that’s the best number in about 8 weeks.

But still just a little shy of the USDA number needed.

Our year-to-date inspections after half the year is behind us is down 2.2% with USDA projecting it to be down 3.1%.

December Corn Chart

Corn prices very disappointing late last week and the market has been trying to creep upward through November and last week markets fell.

Technical indicators are getting close to the oversold range.

Off the highs posted in October the market is in a downtrend.

November Soybean Chart

Soybean prices quite different off the October lows they have been in an uptrend.

We did fall late last week but soybean prices have been holding in pretty well.

If the red line holds, that’s good news.

December KC Wheat Chart

Wheat prices down sharply today making a new low for the move.

Chart and technical selling certainly a feature today.

We are getting very close to the lows we seen last summer in the 8.10-8.40 range.

Questions or Comments

Closing Market Comments December 2, 2022

Today’s Prices

Grain markets finished mixed today, beans did bounce a little bit after yesterday, but corn and wheat saw significant losses.

Weekly Price Summary

Grain Market News

U.S. Prevented Plant Acres

Beginning with an assumption that the past 2 years that virtually all available acres in the U.S. got planted given the very profitable prices.

But one variable is prevented plant acres, and this past spring the northwestern belt and northern plains had extremely wet conditions.

Our prevented plant acres were up 4 million this past year due to a wet spring.

Looking at the balance sheet we will assume that prevented plant is back down to 1.3 million based on dry conditions.

U.S. Corn Yield

Trend line yield for corn next year will be at 183, 183 bushels per acre for a national average.

That may seem high but keep in mind that these years yield of 172.3 was way below average.

U.S. Soybean Yield

 Soybeans also had a below trend yield of 50.2, next years trend line yield is 52 bushels per acre.

Corn S&D

USDA is projecting ending stocks in corn next summer at 1.182 billion bushels.

If we have a yield of trend line at 183, that will give us production of 15.472 billion bushels.

Using demand figures at 14.175, our ending stocks would increase to 2.5 billion.

Soybean S&D

A small increase in acres at just a little over a half a million.

If we assume that demand is the same as this year ay 4.4 billion that would leave us with ending stocks of 356.

Wheat S&D

Wheat had a small increase in acres, trend line yield of 51 bushels per acre.

Argentina is having a very disappointing wheat year and we would not be surprised to see exports increase next year to a much more normal level around 900 million bushels.

Grain Market News

South American Precipitation Forecast

Week 1 shows the dryer weather in Argentina, portions of Paraguay, Uruguay, and southern Brazil.

Today’s forecast has added rain for Argentina, Paraguay, Uruguay, and southern Brazil.

This rain does not look heavy but anywhere from 15-35 millimeters.

December Corn Chart

Prices dropped sharply today due to a favorable forecast in Argentina and a lack of any bullish stories.

Corn took out the lows from 3 weeks ago at 6.53 and then additional chart selling pushed us to 6.45.

This has turned the technical downward as well.

The chart and technical signals certainly look bearish today.

November Soybean Chart

Soybean prices got hit hard, extremely hard yesterday pushing us down to initial chart support.

Today the markets were able to bounce a little bit, but the near-term chart has turned downwards which turned the technical downward.

December KC Wheat Chart

Wheat prices down sharply again today, this market is in a consistent downtrend.

The market broke to new lows today and that triggered additional sales stops.

Technical indicators are near zero and no place to be making sales.

Questions or Comments

Closing Market Comments December 1, 2022

Today’s Prices

Grain markets finished lower to sharply lower today with soybeans leading to the downside on some disappointing comments coming from the EPA.

Grain Market News

EPA RFS Volume Requirements

This year at 20.63 and then a gradual increase going forward to the next 3 years.

US Cumulative Weekly Soybean Oil

Soybean oil was down sharply in fact lock limit down and additional losses are expected tomorrow.

Soybean oil is not priced for export, it is not competitive on the global market and that’s because the US needs our soybean oil domestically for the renewable diesel industry.

Grain Market News

South American Precipitation Forecast

The first week of the forecast continues to have mostly favorable rainfall for Brazil and dryer weather for Argentina and Paraguay.

The forecast has added some rain for eastern Argentina and Uruguay as well as extreme southern Brazil in todays forecast.

The second week continues to show dry pockets in southern Brazil and Paraguay but there have been some adjustments with additional rain being added for Argentina.  

Soybean Production

In the 80s the U.S. had 50mmt of production or so, we are now double both Brazil and Argentina combined which was around 20-25mmt.

Then in late 90s and early 2000s U.S. production was 60-70mmt, South America was at 60-70mmt.

So, around the 2000-year mark was when South America was starting to equal the U.S.

By 2012 Brazil was equal to the U.S. by itself and now Brazil is consistently a larger producer of soybeans than the U.S.

Corn: Weekly Export Sales

Corn sales down to 603 thousand tons, that was at the lower end of the range of expectations and below the level needed for the first time in 3 weeks.

Corn sales continue to run at a pace that USDA is going to have to lower the export forecast.

Soybeans: Weekly Export Sales

Soybeans were also at the lower end of expectations at 694 thousand tons, that was above the level needed to reach the UDSA forecast.

But this is well below last year.

Soybean exports are running at a pace that’s fairly close to the UDSA’s current projections.

Wheat: Weekly Export Sales

Wheat was very disappointing at 156 thousand tons, but we have had a couple very good weeks over the last month over 500 thousand tons.

Wheat exports are running very close to the level needed to reach the USDA forecast.

December Corn Chart

Corn had a disappointing day falling further today and breaking the very gradual uptrend that was in place.

This market is stuck a sideways range.

Chart support at 6.53 and overhead resistance at 6.77.

November Soybean Chart

Soybean prices pushed to new highs yesterday but then had a major set back today on the crash in soybean oil prices based on EPA’s announcement.

That took soybeans from the upper end of the range back down to trend line support.

Its still unclear if the EPA’s proposal will affect overall renewable energy production but it spooked the soybean oil and the soybean market.

December KC Wheat Chart

Wheat prices made a new low today down to 8.81 and then bounced back and closed at 8.90.

The downtrend is still intact.

With prices making new lows and technical indicators near zero, we do not want to be selling wheat.

The first overhead objective is around 9.25.

Questions or Comments

Closing Market Comments November 30, 2022

Today’s Prices

Grain markets finished mixed again today, this is the third day in a row.

Grain Market News

Weekly Ethanol Production

Production was down form last week to 1.018 million barrels.

That’s virtually right on the level needed to reach USDA’s current forecast.

Year to date ethanol production is down 3%, USDA is estimating it to be down 1%.

Weekly Stocks of Fuel Ethanol

Stocks were up slightly from last week and near record large for late November.

There is certainly no shortage of fuel ethanol with stocks currently 13% above the level they were at a year ago.

Grain Market News

Winter Wheat Crop Conditions

The winter wheat crop rating came in at 34% good to excellent, that was up 2% from last week.

Rains in Texas and Oklahoma and even Kansas have helped the crops a little.

We are still entering the winter dormancy season near the lowest rating on record.

60-Day Observed Precipitation

Anything in green is 2 inches of above, that means that the central, western, and northern plains have many areas that have seen less than 2 inches of rain over the last 2 months.

In fact, the lighter blue is areas with less than half an inch of rain.

Yellow and tan areas are 8-10 inches or more over the last 60 days.

60-Day Precipitation % of Normal

It shows the areas that were in light blue, not only has precipitation been below normal but less than 25% of normal.

Those are the areas seeing drought conditions expand or worsen.

As we mentioned areas with 8-10 inches or more of rain have seen drought improve.

South American Precipitation Nov 30-Dec 6

Brazil’s primary growing region has good rains in the northern and eastern portions while extreme southern and portions of western Brazil look to receive less than normal rainfall.

The right side shows the below normal rainfall in southern and western portions of Brazil and for Argentina growing areas, which is further to the south, they are not expecting much rain either.

South American Precipitation Dec 6-Dec 13

The second week shows most of northern and eastern Brazil in good shape and the dryer parts in the far west or south.

Argentina, although not completely dry, is still expecting less than normal rainfall.

Observed Surface High Temps

The heart of the growing region has higher temperatures as well in the mid and upper 90s.

The drought conditions have been in place for a while and now we are adding heat to this.

Temperature Anomaly

Brazil does not look to have any major problems, some areas a little below and some a little above.

Argentina looks to experience some significant heat over the next week and even possibly the next 2 weeks.

December Corn Chart

Corn prices long term are in a sideways range, intermediate is in a downtrend off the highs posted in October, and the short term is in an uptrend.

Today’s trade was somewhat disappointing with an outside day down.

Technical indicators have been upward but with today’s disappointing close giving us a hint of hooking.

If we get March corn in the 6.80 range, we may evaluate the possibility of making additional sales.  

November Soybean Chart

Soybean prices continue to push higher making a new high for the move at 14.84.

Higher energy prices helped but the threatening weather is helping as well.

The fact that beans have broken above the 14.75 high and broke the pennant formation, we have had to reconfigure the chart today.

Technical indicators are starting to approach the overbought area.

December KC Wheat Chart

Wheat prices are in a downtrend.

The long term is still sideways, but the intermediate is down, and the short term is down.

Today was an outside day up, not taking out yesterdays low but took out yesterdays high.

If we get some follow through to the upside tomorrow or Friday that could signal that wheat may test overhead resistance in the 9.25-9.30 range.

Questions or Comments

Closing Market Comments November 29, 2022

Today’s Prices

Grain markets finished mixed today as the choppy back and forth pattern that’s been in place for months continues.

Grain Market News

South American Precipitation Forecast

The bulk of Brazil’s growing area is looking to be in good shape except for the far southern or southwestern areas.

The second week also looks mostly favorable with some dryness continuing in far southern Brazil.

Argentina’s forecast is dry over the first week and better rains are seen late in the second week of the forecast.  

Soil Moisture Change

Today through December 7th shows that declining soil moisture for the bulk of Argentina and extreme southern Brazil.

We are not overly concerned but it is enough to keep the market supported.

Temperature Anomaly

Temperatures are rising across all of Argentina’s growing area while Brazil looks mostly favorable.

South America Drought

This shows that much of Brazil is in good shape, the far southwest is extremely dry.

Argentina is where drought is widespread and is expected to intensify in the next couple weeks.

Grain Market News

Corn- Commodity Fund

The current fund position is long at 170 thousand contracts, that’s less than half of what it was earlier in the year.

Our current position held by the funds is smaller than any time last year.

The funds are still long at 170 thousand contracts, but that’s a manageable position much smaller than earlier this year and last year.

Soybeans- Commodity Fund

The funds are currently long at 82 thousand contracts, less than half of the long they held earlier in the year.

It’s even about half the size of the position back in June.

Wheat- Commodity Fund

Wheat funds are short at 53 thousand contracts.

This is a fairly sizeable, short position at 53 thousand, especially when U.S. and Global stocks remain quite tight.

This is Chicago wheat, its worth noting that the funds are long 18 thousand contracts from KC and short 1000 contract in Minneapolis.

C-B-W Combined Commodity Funds

We can see the current position 199 thousand contracts, that’s less than half of what it was back in the Spring and early Summer.

The fund position is much smaller than it was earlier in the year, but they are still long, and we do need to get some bullish news to encourage them to remain long.

December Corn Chart

The longer term trend in corn has been sideways the last 3-4 months, the intermediate trend is a downtrend off the highs posted in October, and the short term is trying to turn upward.

This market may test intimal resistance at 6.77, we closed at 6.69 today.   

November Soybean Chart

Soybeans have a long term trend in a sideways trend, the intermediate is a sideways trend, and the short term is an uptrend.

In fact, the market is attempting to break out above our pennant formation.

Overhead resistance is at 14.75, closing at 14.66 today.

We remain in an overall sideways range.

December KC Wheat Chart

Wheat prices have been pushing lower, we broke out of a double bottom at 9.15-9.13 and now the market is in a consistent downtrend.

Technical indicators are getting very oversold so no place to be making sales.

Questions or Comments

Closing Market Comments November 28, 2022

Today’s Prices

Grain markets finished mixed today which has been the pattern the last 2-3 months.

Grain Market News

Crude Oil

Crude oil was able to post a new low.

The good news is it did reverse and is currently trading at 77.31, up $3.70 from the morning lows.

The rebound in the crude oil market did support a rebound in the grain markets as well.

Grain Market News

South American Precipitation Forecast

Brazil is in mostly good shape, although far southern and far western portions of Brazil could be short changed for moisture.

Argentina is mostly dry conditions across their growing region this week.

Looking ahead to next week Brazil continues to be in mostly good shape and Argentina could see some better rains next week.

Soil Moisture Change

This shows that southern and western Brazil have some dry pockets expected to continue and Argentina could see slipping soil moisture as well.

A large are of Brazil’s producing area in the central, northern, and northeastern are in good shape.

Temperature Anomaly

Temperatures are non-threatening for Brazil with some areas a little above and some a little below.

In Argentina where conditions are dryer there are also above normal temperatures.

This has been ongoing for the past few weeks causing additional delays for planting and crop stress.

7-Day Observed Precipitation

In the U.S. we did get additional rains over the weekend in the Texas, Oklahoma, and even southeast Kansas areas.

Some of that rain moved into the Mississippi River which is good news for river levels and barges.

30-Day Observed Precipitation

The 30 day has a similar pattern where those states down south had good rain while the central, western, and portions of the northern plains remain dry.

Corn: Weekly Export Inspections

Corn inspections were very disappointing after bouncing up towards 20 million bushels the previous 2 weeks.

They are back down to 11.9 million bushels which is well below last year and well below the 49 million bushels that’s needed weekly to reach the USDA forecast.

Soybeans: Weekly Export Inspections

Soybean export inspections were pretty good at 74 million bushels.

Last week’s number was raised to 90 million bushels.

Overall soybeans continue to trend below the year ago level, our year-to-date exports are down 10% versus USDA’s estimate of 5%.

But the outstanding sales for soybeans are above last year.

Wheat: Weekly Export Inspections

Wheat export inspections were disappointing at just 7.29 million bushels, that’s about half the level needed to reach USDA forecast.

But because we had some good shipments back in August-October our year-to-date shipments are very close to the target.

December Corn Chart

Corn prices remain stuck in a sideways range, they have been here going back to August.

Recent negative news has kept us towards the lower end of the range.

The good news is the market has not seen a new low for 2 weeks and the short term is trying to turn up.

The 10-day average trend is up as well as the technical indicators.

November Soybean Chart

Soybeans prices have also been trying to work higher recently.

Today they set new highs for this move up to 14.65.

Today’s sizeable rally in beans pushed us above our downtrend line that has been in place back to last summer.

The combination of a positive chart pattern and the technical pointed upward as well tells us the market may be interested in testing the 14.75 level and then 15-15.08.

December KC Wheat Chart

Wheat prices making a new low for the move down to $8.98 and having a disappointing close.

This keeps the trend downward.

We did have a sideways pattern for a month or so but the recent breakout below the double bottom has it down now.

Technical indicators are getting close to the oversold level again.

Questions or Comments

Closing Market Comments November 23, 2022

Today’s Prices

Grain markets started out lower but rebounded to close higher today on some short covering ahead of the holiday.

Grain Market News

South America Precipitation Nov 23-29

Brazil is expecting good rains in the northeastern areas while remaining dry in southern and western areas. Argentina is mostly dry over the first week of the forecast.

The anomaly on the left, in Brazil north and eastern Brazil looks okay while southern and western Brazil are dry and Argentina remains dry as well.

South America Precipitation Nov 30-Dec 6

The second week we see some improvement in Brazil’s rainfall and a slight improvement in Argentina’s rainfall.

When we look at the anomaly you can see that Brazil is mostly average precipitation and Argentina average to slightly below.

South America

Vegetation health in Brazil conditions in central and southern good, northern Brazil a little less than last year.

Argentina’s mostly seeing vegetation health below the year ago level.

The right side is the NDVI, that’s the normalized difference index compared to average.

Overall Brazil looks good compared to average while Argentina is well below average.

Argentina Corn Planting Progress

As of November 17th, Argentina corn is 32% planted versus 48% on average.

You can see we have been well below average throughout the planting season and that’s due to dryness.

The planting season lasts over 4 months from September to early February.

Argentina Soybean Planting Progress

Argentina soybean progress is well below normal at 18% planted compared to 32% on average.

You can see that since the beginning of planting, Argentina has been well below the normal pace.

Brazil 1st Corn Planting Progress

Through November 11th, planting was ahead of average and equal to last year.

Planting started early and has remained above the average pace throughout the season.

This week it is estimated that Brazil’s 1st corn crop is over 90% planted.

Brazil Soybean Planting Progress

Soybeans through November 4th, we are close to average just being a little below the year ago.

We expect something in the low 80s on November 18th.

Grain Market News

Weekly Ethanol Production

Ethanol production improved to 1.041 million barrels per day.

That above the level needed to reach USDA’s forecast but its still below the year ago level.

Year to date is down 3.1% from last year, USDA is estimating that corn use will be down 1% this year.

Weekly Stocks of Fuel Ethanol

Fuel ethanol stocks exploded to the upside being up 7% from last week to 22.831 millionaires.

That’s not only 13% above the year ago, but its near record large for this time of year.

December Corn Chart

Corn prices are stuck in a very narrow range for over 2 weeks now.

We have overhead resistance from a downtrend line and chart support around the 6.50 level.

Today’s firmer close is good news but we need to break through the downtrend line to see some buying.

November Soybean Chart

Soybeans prices had a firm close after being lower this morning.

In the very short term, the market looks good inching its way higher.

Overall, we are stuck in a sideways range with technical indicators stuck as well.

If they can push up toward the previous highs towards the 14.64-14.69 level, that may be an area to make sales.

December KC Wheat Chart

Wheat prices this morning were very negative down sharply and making the new low for the move at 9.11.

But we turned around and close at 9.30, 19 cents off the daily low.

An overall downtrend is still in place off the highs posted in October at 10.37 and new lows posted today.

Next week we will see if we can get some bullish news and push this market towards 9.55, initial overhead resistance from our downtrend line.

Questions or Comments