Afternoon Market Recap for January 26, 2022

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Soybeans climb to 7-month high.

Corn also firms in Wednesday’s session, while wheat takes a tumble

Grains were mixed but mostly higher on Wednesday. Soybeans led the charge today, jumping more than 2% higher on a round of technical buying largely spurred by strong demand fundamentals, rising energy futures and lingering worries over South American production. Corn also firmed 1% as spillover strength triggered some technical buying. Wheat bucked the bullish trend, however, with most contracts spilling more than 3% lower as traders switched over to technical selling and profit-taking.

Very few parts of the Midwest and Plains can expect to see additional rain or snow fall between Thursday and January, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts some cooler-than-normal conditions creeping back into the upper Midwest between February 2 and February 8, with seasonally wet weather likely for the eastern half of the U.S. during that time.

On Wall St., the Dow tracked 180 points higher in afternoon trading to 34,478, even as the consensus is becoming stronger that the Federal Reserve will start implementing interest rate hikes as soon as this spring. Energy prices made significant inroads, with crude oil up another 2% this afternoon to crest $87 per barrel. Gasoline and diesel each rose around 2.5% higher. The U.S. Dollar firmed moderately.

On Tuesday, commodity funds were net buyers of corn (+5,000), soybeans (+2,500), soyoil (+2,500) and CBOT wheat (+9,000) contracts but were net sellers of soymeal (-2,000).

Corn

Corn prices followed soybeans higher after a round of technical buying on Wednesday. A solid round of ethanol production data out today, along with expectations for a healthy dose of export data from USDA tomorrow morning, lent additional support. March futures rose 6.25 cents to $6.2625, with May futures up 5.75 cents to $6.2425.

Corn basis bids were steady to mixed on Wednesday, sliding 2 to 3 cents lower at two Midwestern processors while firming 2 to 3 cents higher at two other central U.S. locations today.

Ethanol production turned lower for the week ending January 21, falling to a daily production average of 1.035 million barrels, per the latest data from the U.S. Energy Information Administration that was released earlier today. Daily production has stayed above the 1-million-barrel benchmark since early October, staying at or near pre-pandemic levels.

IHS Markit Agribusiness is now projecting 2022 U.S. corn plantings at 91.489 million acres. That’s slightly down from the group’s December estimate of 91.578 million acres and nearly 2 million acres below 2021’s tally of 93.357 million acres.

Ahead of tomorrow morning’s export report from USDA, analysts expect the agency to show corn sales ranging between

South Korea purchased 2.7 million bushels of animal feed corn from optional origins in an international tender that closed earlier today. The grain is for shipment in April or May, depending on where it is sourced. In a separate tender, another South Korean feed group purchased 7.6 million bushels of animal feed corn that is set for arrival around April 20.

Will red-hot farmland values continue to increase? That depends, but if current fundamentals continue to trend in the current direction, it would be reasonable to expect the market to be “firm to somewhat higher,” according to Randy Dickhut, senior vice president of real estate operations with Farmers National Company. Click here to learn more.

Preliminary volume estimates were for 307,894 contracts, falling 41% below Tuesday’s final count of 524,074.

Soybeans

Soybean prices reached seven-month highs after another round of technical buying on Wednesday. Lingering concerns over South American production after a season that featured plenty of hot, dry weather was a primary driver today. Spillover strength from soymeal and soyoil – each trending 2% higher – provided additional tailwinds. March futures climbed 31 cents to $14.3825, with May futures up 29 cents to $14.45.

Soybean basis bids were steady to firm after rising a penny higher at an Ohio elevator and improving 4 cents at an Iowa river terminal on Wednesday.

IHS Markit Agribusiness is now forecasting 2022 U.S. soybean plantings at 87.805 million acres, which is lower than its December estimate of 88.815 million acres but still ahead of 2021’s tally of 87.195 million acres.

Ahead of Thursday morning’s export report from USDA, analysts expect the agency to show soybean sales ranging between 27.6 million and 69.8 million bushels for the week ending January 20. Analyst also think USDA will show soymeal sales ranging between 100,000 and 600,000 metric tons last week, plus up to 45,000 MT in soyoil sales.

Brazil’s Anec estimates that the country’s soybean exports for January will reach 124.6 million bushels. Anec also estimates that Brazil will export an additional 106.3 million bushels of corn this month.

Meantime, Brazil’s Safras & Mercado estimates that the country’s 2022 soybean exports will total 3.142 billion bushels. That would be a year-over-year reduction of 5%, if realized.

Preliminary volume estimates were for 242,101 contracts, which was moderately higher than Tuesday’s final count of 176,063.

Wheat

Wheat prices stumbled on a round of technical selling and profit-taking on Wednesday after reaching two-month highs earlier this week. Most contracts closed with losses of more than 3%. March Chicago SRW futures tumbled 25.25 cents to $7.9275, March Kansas City HRW futures lost 20.75 cents to $8.1375, and March MGEX spring wheat futures eroded 32 cents to $9.1525.

IHS Markit Agribusiness estimates that 2022 U.S. winter wheat plantings reached 34.397 million acres, which would be moderately above 2021’s tally of 33.648 million acres, if realized.

Prior to tomorrow morning’s export report from USDA, analysts think the agency will show wheat sales ranging between 7.3 million and 22.0 million bushels for the week ending January 20.

South Korea purchased around 2.0 million bushels of animal feed wheat from optional origins in an international tender that closed earlier today. The grain is for arrival by April 25.

Preliminary volume estimates were for 117,081 CBOT contracts, trending moderately below Tuesday’s final count of 141,515.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Mar 627.75 615 627 6.25
22-May 625.75 614 625 5.75
Soybeans        
22-Mar 1443.75 1393.75 1440 31
22-May 1450.25 1402.5 1447 29
Soymeal                $/ton        
22-May 401.7 388.7 399.7 8
Soyoil                    cents/lb        
22-May 64.11 62.2 64 1.31
Wheat                    $/bushel        
22-Mar 817.5 787 795 -25.25
22-May 821.25 793 800.75 -23.25
KC Wheat        
22-Mar 833.75 804.75 815.75 -20.75
22-May 835 807.5 818.75 -19.5
MPLS Wheat        
22-Mar 947.25 913.5 916.25 -32
22-May 942 911 913.75 -31.25
Live Cattle             cents/lb        
22-Feb 138.625 137 138.1 1
Feeder Cattle         cents/lb        
22-Mar 162.3 160.375 160.9 1.05
Lean Hogs             cents/lb        
22-Apr 97.5 95.55 96.275 -0.975
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Feb 87.95 85.01 86.93 1.33
Diesel        
22-Feb 2.7521 2.6661 2.733 0.0639
Unleaded Gasoline   $/gallon        
22-Feb 2.5347 2.4533 2.5165 0.057
Natural Gas        
22-Feb 4.194 3.856 4.018 0.124
U.S. Dollar Index        
22-Mar 96.44 95.9 96.415 0.487
Gold                      $/ounce        
22-Feb 1850.2 1814.8    
Copper        
22-Jan 4.508 4.4845 4.506 0.063
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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