Afternoon Market Recap for January 25, 2022

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Wheat prices continue to push higher.

Soybeans trend slightly higher, as corn prices ease slightly lower

Grain prices were mixed but mostly higher on Tuesday. Winter wheat contracts were once again the session’s big winner, jumping around 2% higher on concerns about U.S. crop quality and overseas anxiety about whether Russia will invade Ukraine (some experts say it is “imminent,” while others are more cautiously optimistic). Soybeans also made modest inroads on some light technical buying today, while corn prices faded slightly lower.

Not much rain or snow is expected to fall on the Midwest and Plains between Wednesday and Saturday, although parts of the eastern Corn Belt could see some more measurable moisture during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts

On Wall St., the Dow mounted a dramatic comeback this afternoon after tumbling 800 points lower in morning trading, trending 78 points higher to 34,443. Volatility might be the name of the game moving forward as investors anxiously await interest rate hikes from the Federal Reserve. Experts are generally predicting four or more rate hikes in 2022.

Energy prices leapt higher, with crude oil up 2.5% in afternoon trading to move back above $85 per barrel on geopolitical concerns – especially regarding the current tensions between Ukraine and Russia. Gasoline also rose 2.5% higher, with diesel up around 1.5%. The U.S. Dollar firmed slightly.

On Monday, commodity funds were net buyers of corn (+6,000), soymeal (+1,000) and CBOT wheat (+13,000) contracts but were net sellers of soybeans (-9,000) and soyoil (-1,500).

Corn

Corn prices tested moderate gains in Tuesday’s session but couldn’t hold onto them, spilling slightly into the red by the close. March futures eased 1.75 cents to $6.1925, while May futures held steady at $6.1750.

Corn basis bids trended 1 to 3 cents higher at three Midwestern locations on Tuesday while holding steady elsewhere across the central U.S.

European Union corn imports during the 2021/22 marketing year are trending moderately below last year’s pace, according to the latest data from the European Commission. Imports reached 349.2 million bushels through January 23.

Iran issued international tenders to purchase several types of grain, including 2.4 million bushels of feed corn, 2.8 million bushels of animal feed barley and 60,000 metric tons of soymeal. Offers must be submitted by January 26, and the grain is for shipment in February and March.

We’re now more than a full year into the Biden Administration, which promised it “would do all it could to try to move the needle on climate change and reinsert itself on the global stage’s discussions of how to reduce greenhouse gas emissions,” according to Farm Futures policy editor Jacqui Fatka. So Fatka took a deep dive look at what has (and hasn’t) happened so far. Click here to learn more.

Preliminary volume estimates were for 524,074 contracts, moving significantly above Monday’s final count of 322,991.

Soybeans

Soybean prices fought through a choppy session to capture modest gains by the close, erasing a portion of Monday’s losses. South American weather remains the No. 1 thing traders are watching at the moment, with harvest currently underway there. March futures picked up 3.5 cents to $14.0650, while May futures added 4.25 cents to $14.1525.

Soybean basis bids were steady at most Midwestern locations on Tuesday but did slide a penny lower at an Ohio elevator today.

European Union soybean imports during the 2021/22 marketing year have reached 270.0 million bushels through January 23. That’s a year-over-year decline of 12.3% so far. EU soymeal imports are also trending moderately below last year’s pace, with 9.01 million metric tons.

Our latest survey results predict that 2022 soybean acres will surpass corn plantings for the second time ever. High fertilizer prices are certainly one huge factor. What else is in play this coming season? Farm Futures grain market analyst Jacqueline Holland takes a closer look – click here to learn more.

February 1 marks the first day of the Lunar New Year, and in today’s Ag Marketing IQ blog, grain market analyst Bryce Knorr explains why that’s significant. “Markets [in China] close for a week starting on Lunar New Year’s Eve, and activity can be slow for an additional week as travelers return,” he says. “This is a pause when news about soybean bookings can be sparse. There’s uncertainty even in normal times about whether buyers will step back in for new purchases – or begin cancelling previous deals – when the long holiday is over. This year, pandemic upheavals and weather issues in South America create even more questions about the fate of U.S. sales to its biggest customer.”

Preliminary volume estimates were for 176,063 contracts, tracking below Monday’s final count of 207,054.

Wheat

Wheat prices were mixed but mostly higher after winter wheat contracts jumped 2% higher and spring wheat contracts shifted slightly lower. March Chicago SRW futures rose 15.75 cents to $8.1625, March Kansas City HRW futures also gained 15.75 cents to $8.3375, and March MGEX spring wheat futures eased 0.75 cents to $9.4775.

Winter wheat quality ratings in Kansas, the No. 1 production state, continue to show worrisome trends, per the latest data from NASS Monday afternoon. Thirty percent of the crop is rated good-to-excellent, with 39% rated fair and 31% rated poor or very poor. And 39% of the estate’s topsoil moisture levels are rated “very short.”

European Union soft wheat exports during the 2021/22 marketing year have reached 573.9 million bushels through January 23, which is 3.9% above last year’s pace before, despite having incomplete French data. EU barley exports are also up from a year ago, with 225.5 million bushels.

Ukraine, which is a major world exporter of wheat and corn, have restricted port loading operations across six major locations due to “poor weather,” according to the country’s seaport authority. The country could export as much as 65 million metric tons of grain during the 2021/22 marketing year.

The Philippines purchased 1.3 million bushels of animal feed wheat from Australia in an international tender that closed earlier today. The grain is for shipment in April.

Preliminary volume estimates were for 141,515 CBOT contracts, rising moderately above Monday’s final count of 97,207.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Mar 631 618.5 620 -1.75
22-May 627.25 614.5 618.5 0
Soybeans        
22-Mar 1413.75 1393.25 1407.25 3.5
22-May 1422 1401.75 1416 4.25
Soymeal                $/ton        
22-May 393.8 387.7 391.3 -1.6
Soyoil                    cents/lb        
22-May 62.95 61.95 62.6 0.53
Wheat                    $/bushel        
22-Mar 831.5 800.5 818 15.75
22-May 834 803.75 822.25 16.75
KC Wheat        
22-Mar 849.25 818.25 834.5 15.75
22-May 851 820.5 836.75 15.75
MPLS Wheat        
22-Mar 965 945.25 947.25 -0.75
22-May 961.25 941.25 944 -2
Live Cattle             cents/lb        
22-Feb 137.2 135.975 137.125 0.8
Feeder Cattle         cents/lb        
22-Mar 161.25 158.65 160 -1.25
Lean Hogs             cents/lb        
22-Apr 97.375 95.575 97.25 1.925
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Feb 85.71 82.99 85.28 1.97
Diesel        
22-Feb 2.6707 2.6154 2.6667 0.0393
Unleaded Gasoline   $/gallon        
22-Feb 2.465 2.4023 2.4565 0.0585
Natural Gas        
22-Feb 3.919 3.761 3.876 0.001
U.S. Dollar Index        
22-Mar 96.26 95.895 95.95 0.049
Gold                      $/ounce        
22-Feb 1854.2 1834.4 1843.1 1.4
Copper        
22-Jan 4.4325 4.432 4.4325 0.0295
Fertilizer Swaps     (as of 01/21)  
DAP Tampa-index              810.0 0
DAP-New Orleans              766.1 -19
Urea-New Orleans              639.3 -55
Urea-Middle East              722.5 -93
Urea-Black Sea              705.0 -83
UAN (32%) New Orleans              606.3 0

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