Afternoon Market Recap for January 18, 2022

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Wheat prices surge higher.

Corn also finds moderate gains on Tuesday, while soybeans stumble lower

 

Worries over rising tensions between Russia and Ukraine, along with lingering quality concerns for the U.S. crop, helped wheat prices surge 3% to 4% higher on Tuesday. Corn followed suit, trending around 0.5% higher by the close. Soybeans stumbled, in contrast, succumbing to a round of technical selling that left prices with losses of around 0.5% today.

Between Wednesday and Saturday, many parts of the Midwest will remain dry, although the Northern Plains could see some additional snows later this week, per the new 72-hour cumulative precipitation map from NOAA. The agency’s latest 8-to-14-day outlook predicts a return to seasonally dry conditions for most of the Corn Belt between January 25 and January 31, with colder-than-normal weather likely for the eastern half of the U.S. as the month draws to a close.

On Wall St., a rise in bond yields caused the Dow to tumble 436 points in afternoon trading to 35,475. Energy futures continue to firm, with crude oil up another 1.5% this afternoon on lingering global supply concerns to move above $85 per barrel. Diesel rose 1.25%, with gasoline up around 0.4%. The U.S. Dollar firmed moderately.

Last Friday, commodity funds were net buyers of corn (+6,500) contracts but were net sellers of soybeans (-4,000), soymeal (-2,000) and CBOT wheat (-4,000), and funds were roughly even when trading soyoil contracts.

Corn

Corn prices shifted moderately higher after spillover strength from red-hot wheat led to a round of technical buying. March futures added 4 cents to $6.0025, while May futures picked up 3 cents and also closed at $6.0025.

Corn basis bids were mostly steady to weak across the central U.S. on Monday after falling 1 to 10 cents lower at four Midwestern locations today.

Corn export inspections trended moderately above the prior week’s tally to reach 47.4 million bushels. That was just above the entire range of analyst estimates, which came in between 31.5 million and 47.2 million bushels. Cumulative totals for the 2021/22 marketing year are still trailing last year’s pace, with 601.9 million bushels.

Brazil’s Anec estimates that the country will export 105.7 million bushels of corn in January, which is fractionally above the prior estimate it made last week.

European Union corn imports for the 2021/22 marketing year are moderately trailing last year’s pace after reaching 325.2 million bushels through January 16, per the latest data from the European Commission.

Chinese corn imports reached an all-time high in 2021, jumping 152% higher year-over-year to 1.116 billion bushels. A domestic supply gap also led to wheat imports increasing 16.6% from a year ago, to 359 million bushels (also a record).

Preliminary volume estimates were for 198,763 contracts, trending a bit lower than Friday’s final count of 236,804.

Soybeans

Soybean prices stumbled on a round of technical selling partly spurred by additional rains expected in South American. Spillover strength from wheat kept losses from becoming too severe. March futures shifted 7.75 cents lower to $13.62, with May futures down 8 cents to $13.7150.

Soybean basis bids were steady to mixed to start the week, firming 2 cents at an Indiana processor while falling 3 to 5 cents lower at two interior river terminals today.

Private exporters announced two more large grain sales to USDA today. The first was for 8.8 million bushels of soybeans for delivery to Mexico during the 2021/22 marketing year, which began September 1. Private exporters also announced the sale of 5.0 million bushels of grain sorghum to unknown destinations, also for delivery during the current marketing year.

The National Oilseed Processors Association reports that U.S. processors saw a record crush of 186.438 million bushels in December. That’s up 3.9% from November’s volume and tops the previous all-time monthly record set in October 2020. Soyoil stocks through December 31 rose 10.9% higher from November and nearly 20% from a year ago, reaching 1.832 billion pounds.

Soybean export inspections nearly doubled in volume from a week ago, climbing to 63.2 million bushels. That was also above the entire range of trade estimates, which came in between 22.0 million and 50.5 million bushels. Cumulative totals for the 2021/22 marketing year remain well behind last year’s pace, however, with 1.229 billion bushels.

Brazil’s Anec estimates that the country will export 158.7 million bushels of soybeans in January, which is slightly above the prior estimate it issued a week ago.

European Union soybean imports during the 2021/22 marketing year are still trending moderately below last year’s pace, with 257.6 million bushels through January 16. EU soymeal imports are also moderately lower year-over-year.

There’s always the caveat that past performance is not an indication of future success. “But a look back at history provides clues for new crop hedgers about what tools and timing work – and why,” notes grain market analyst Bryce Knorr. What did he learn after sifting through the data? Click here to learn more in today’s Ag Marketing IQ blog.

Preliminary volume estimates were for 170,480 contracts, shifting moderately above Friday’s final count of 144,657.

Wheat

Wheat prices jumped substantially higher for several reasons, including robust overseas sales, tensions between Ukraine and Russia, and ongoing crop quality concerns in the U.S. Plains. March Chicago SRW futures rose 28.5 cents to $7.70, March Kansas City HRW futures climbed 29.5 cents to $7.7450, and March MGEX spring wheat futures gained 25.5 cents to $9.0375.

Wheat export inspections saw moderate improvements after reaching 13.5 million bushels for the week ending January 13. That was toward the upper end of trade estimates, which ranged between 7.3 million and 14.7 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately behind last year’s pace, moving to 470.4 million bushels.

European Union soft wheat exports during the 2021/22 marketing year are trending 5.2% above last year’s pace after reaching 562.9 million bushels through January 16. EU barley exports are also tracking higher year-over-year, with 225.5 million bushels.

Russian consultancy Sovecon estimates that the country’s wheat exports this month will reach 95.5 million bushels. That would be the lowest monthly tally since last July, if realized. Russia is the world’s No. 1 wheat exporter.

Turkey purchased 12.3 million bushels of wheat in an international tender that recently closed. The country has been an active grain buyer in recent months as it continues to shore up domestic supplies following drought.

Japan issued a regular tender to purchase 2.7 million bushels of food-quality wheat from the United States and Canada that closes on Thursday. Of the total, around 70% is expected to be sourced from the U.S. The grain is for shipment between February 21 and March 20.

Preliminary volume estimates were for 99,759 CBOT contracts, moving 29% ahead of Friday’s final count of 77,272.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Mar 600.75 588.25 599.5 4
22-May 601 589.75 600 3
Soybeans        
22-Mar 1368.75 1349.75 1361.25 -7.75
22-May 1378.5 1359.5 1371 -8
Soymeal                $/ton        
22-May 400.6 387.2 388.7 -13.7
Soyoil                    cents/lb        
22-May 59.44 57.84 59.08 0.65
Wheat                    $/bushel        
22-Mar 771.5 741.25 769 28.5
22-May 772.5 744.75 770.25 26.75
KC Wheat        
22-Mar 775 745 772.75 29.5
22-May 777.75 749.5 775.25 28.75
MPLS Wheat        
22-Mar 907.75 872.25 907 25.5
22-May 905.25 871.5 904.75 24.5
Live Cattle             cents/lb        
22-Feb 138.375 137.5 137.625 -0.35
Feeder Cattle         cents/lb        
22-Mar 166.6 165.25 165.45 -0.925
Lean Hogs             cents/lb        
22-Apr 89.4 88.05 89.325 0.875
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Feb 85.93 83.5 85.91 2.09
Diesel        
22-Feb 2.7116 2.6345 2.6898 0.0555
Unleaded Gasoline   $/gallon        
22-Feb 2.4692 2.4075 2.4466 0.0276
Natural Gas        
22-Feb 4.18 4.002 4.072 -0.009
U.S. Dollar Index        
22-Mar 95.805 95.105 95.685 0.524
Gold                      $/ounce        
22-Feb 1822.9 1804.7 1813.5 -3
Copper        
22-Jan 4.4255 4.377 4.377 -0.0345
Fertilizer Swaps     (as of 01/14)  
DAP Tampa-index              810.0 0
DAP-New Orleans              785.4 -17
Urea-New Orleans              694.5 -50
Urea-Middle East              815.0 -48
Urea-Black Sea              787.5 -43
UAN (32%) New Orleans              606.3 0

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