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Afternoon Market Recap for January 27, 2022

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Soybean rally marches on.

Wheat takes another tumble, with corn facing moderate losses

Grain prices were mixed but mostly lower after another round of uneven technical maneuvering on Thursday. Soybeans again pushed higher, closing with gains of around 0.4% and fresh multi-month highs after more technical buying today. In contrast, a quickly strengthening U.S. Dollar triggered more technical selling and profit-taking that slashed some wheat contracts by as much as 2.75%. Corn prices faded around 0.5% lower.

Very little rain or snow is expected to fall on the Midwest or Plains between Friday or Monday, although some scattered moisture is possible during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally dry weather for the Central Plains and western Corn Belt between February 3 and February 9, with widespread seasonally cool weather in the central U.S.

On Wall St., the Dow tilted 68 points lower to 34,099 as investors attempt to balance looming interest rate hikes against better-than-expected Q4 GDP, which improved 6.9% from a year ago. Energy futures were mixed. Crude oil dropped 0.75% in afternoon trading to move back below $87 per barrel. Gasoline inched 0.1% lower, while diesel jumped more than 1% higher. The U.S. Dollar firmed considerably.

On Wednesday, commodity funds were net buyers of corn (+7,500), soybeans (+15,000), soymeal (+5,500) and soyoil (+5,500) contracts but were net sellers of CBOT wheat (-12,000).

Corn

Corn prices finished a choppy session on Thursday with moderate losses of around 0.5% after a round of technical selling partly spurred by spillover weakness from tumbling wheat prices. March futures faded 3 cents to $6.24, with may futures down 3.5 cents to $6.2150.

Corn basis bids were steady to slightly mixed on Thursday, moving as much as 2 cents higher at an Illinois river terminal and as much as 3 cents lower at an Iowa ethanol plant today.

Old crop corn sales jumped 84% above the prior four-week average to 55.2 million bushels. New crop sales saw net reductions of 6.5 million bushels, bringing the total tally down to 48.7 million bushels. That was still toward the higher end of trade estimates, which ranged between 23.6 million and 55.1 million bushels. Cumulative totals for the 2021/22 marketing year are still slightly behind last year’s pace, with 724.3 million bushels.

Corn export shipments notched a new marketing-year high of 56.6 million bushels. Japan was the No. 1 destination, with 16.3 million bushels. Mexico, China, Canada and Colombia rounded out the top five.

The European Commission made modest reductions in its latest estimate for 2021/22 EU corn production, sliding to 2.716 billion bushels. Corn export estimates held steady from a month ago, at 570.8 million bushels.

In South Africa, excessive rains have the country’s Crop Estimates Committee estimating corn plantings could drop by 5.3% this season, offering a current projection of 6.449 million acres. South Africa is the continent’s No. 1 corn producer.

Will farmland values continue to increase in 2022? That depends on a multitude of factors, 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 240,576 contracts, moving moderately below Wednesday’s final count of 307,894.

Soybeans

Soybean prices continued to improve Thursday, bolstered by expectations for lower production potential in South America and a solid round of export sales data from USDA this morning. March futures added 6 cents to $14.46, with May futures up 4.5 cents to $14.5150.

Soybean basis bids were steady to mixed Thursday after dropping 5 cents at a Nebraska processor while firming 2 to 4 cents higher at three other Midwestern locations today.

Old crop soybean exports trended 77% above the prior four-week average, with 37.7 million bushels. New crop sales added 7.5 million bushels, for a grand total of 45.2 million bushels. That was near the higher end of trade estimates, which ranged between 27.6 million and 69.8 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately behind last year’s pace, with 1.287 billion bushels.

Soybean export shipments inched 1% above the prior four-week average, with 58.6 million bushels. China was by far the No. 1 destination, with 31.0 million bushels. Mexico, Spain, Japan and the Netherlands filled out the top five.

In Brazil, Abiove now projects the country’s 2021/22 soybean production at 4.990 billion bushels, trimming 154 million bushels off its prior estimate. Export estimates also trended lower, at 3.193 billion bushels, while crushings are expected to reach a new record of 1.764 billion bushels.

South Korea purchased 60,000 metric tons of soymeal, likely sourced from South America, in an international tender that closed earlier today. The grain is for arrival in early May.

Preliminary volume estimates were for 249,785 contracts, firming slightly above Wednesday’s final count of 242,101.

Wheat

Wheat prices continued to drop significantly on Thursday, facing plenty of pressure from a strengthening U.S. Dollar. Traders largely ignored a round of better-than-expected export data from USDA this morning. March Chicago SRW futures fell 18.75 cents to $7.7625, March Kansas City HRW futures lost 22.5 cents to $7.9325, and March MGEX spring wheat futures dropped 13.5 cents to $9.0275.

Old crop wheat export sales reached a marketing-year high after climbing 78% above the prior four-week average to 24.9 million bushels. Net sales for 2022/23 added 2.2 million bushels, for a total of 27.1 million bushels. That was above the entire range of trade guesses, which came in between 7.3 million and 22.0 million bushels. Cumulative totals for the current marketing year are now at 443.1 million bushels.

Wheat export shipments tracked 21% higher than the prior four-week average, with 13.3 million bushels. The Philippines topped all destinations, with 4.5 million bushels. Nigeria, Mexico, Jamaica and Japan rounded out the top five.

The European Commission slightly trimmed its estimates for 2021/22 EU wheat production to 4.795 billion bushels. Estimates for EU wheat exports in the current marketing year remained unchanged, at 1.176 billion bushels.

Adverse weather in Ukraine disrupted grain-loading operations at key ports earlier this week, but the country’s seaport authority said workloads have mostly returned back to normal. Ukraine is one of the world’s top corn and wheat exporters and is expected to sell a record amount of grain in 2021/22 following its best-ever harvest last fall.

Japan purchased around 935,000 bushels of food-quality wheat from Australia in a regular tender that closed earlier today. The grain is for shipment in May.

Preliminary volume estimates were for 89,877 CBOT contracts, trending about 23% below Wednesday’s final count of 117,081.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Mar 627.75 621.25 625.25 -3
22-May 625.75 619.75 623 -3.5
Soybeans        
22-Mar 1456.5 1428.5 1448.25 6
22-May 1461.75 1435.5 1454 4.5
Soymeal                $/ton        
22-May 407.8 395.6 403.3 3.6
Soyoil                    cents/lb        
22-May 64.89 63.52 64.35 0.29
Wheat                    $/bushel        
22-Mar 795.5 774 777 -18.75
22-May 801 780 782.25 -19
KC Wheat        
22-Mar 816 791 793.5 -22.5
22-May 818.25 794.25 797 -22.5
MPLS Wheat        
22-Mar 920 901.5 902.5 -13.5
22-May 917.75 899.25 900 -13.75
Live Cattle             cents/lb        
22-Feb 138.25 137.5 138 -0.05
Feeder Cattle         cents/lb        
22-Mar 161.85 159.125 159.925 -0.875
Lean Hogs             cents/lb        
22-Apr 96.9 94 94.725 -1.725
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Feb 88.54 86.2 86.35 -1
Diesel        
22-Feb 2.808 2.7261 2.7879 0.0439
Unleaded Gasoline   $/gallon        
22-Feb 2.57 2.51 2.5146 -0.0083
Natural Gas        
22-Feb 4.42 3.99 4.331 0.295
U.S. Dollar Index        
22-Mar 97.3 96.53 97.225 0.825
Gold                      $/ounce        
22-Feb 1822.5 1792 1792.8 -36.9
Copper        
22-Jan 4.4635 4.4175 4.437 -0.0675
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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