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Bargain buyers lift corn, wheat prices

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Afternoon report: Wheat also firm in Tuesday’s session, while soybeans ease slightly

Grain prices were mixed but mostly higher after bargain buyers entered the fray on Tuesday. Wheat prices saw the biggest boost after rising 1.75% to 2% higher as traders attempt to balance recent precipitation in the Plains against severely poor crop quality. Corn prices also made moderate inroads with gains of around 1.5%. Soybeans started the session in the green but eroded back into the red by the close.

More rain and snow will be moving across large portions of the Midwest and Plains between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The eastern Corn Belt, Mid-South and Southeast are the areas likely to see the highest amounts during this time. NOAA’s new 8-to-14-day outlook predicts widespread seasonally cold weather across the central U.S. between January 31 and February 6, with wetter-than-normal weather also likely.

On Wall St., the Dow added 109 points in afternoon trading to reach 33,739 after investors digested a mixed bag of corporate earnings reports. Energy futures eroded lower, with crude oil losing 1.75% this afternoon to $80 per barrel on the anticipation of increasing domestic stocks. Gasoline was also down around 1.75%, while diesel dropped more than 3%. The U.S. Dollar softened moderately.

On Monday, commodity funds were net buyers of soyoil (+1,000) contracts but were net sellers of corn (-10,000), soybeans (-8,500), soymeal (-2,000) and CBOT wheat (-8,500).

Corn

Corn prices climbed steadily higher throughout Tuesday’s session, closing with gains of around 1.5% following a round of bargain buying. Export optimism was also in the mix today after USDA reported a flash sale to unknown destinations this morning. March futures rose 11 cents to $6.7725, with May futures up 10 cents to $6.75.

Corn basis bids were mostly steady across the central U.S. on Tuesday but did tilt 3 cents higher at an Ohio elevator and 5 cents lower at an Indiana ethanol plant today.

Private exporters reported to USDA the sale of 5.1 million bushels of corn for delivery to unknown destinations during the 2022/23 marketing year, which began September 1.

European Union corn imports during the 2022/23 marketing year are trending 81% above last year’s pace after reaching 635.0 million bushels through January 22, according to the latest data from the European Commission.

Brazil’s Anec expects the country’s corn exports to reach 204.7 million bushels in January. That’s slightly above the group’s prior projection made a week earlier.

The office of the U.S. Trade Representative issued a stern statement regarding Mexico’s decision to begin banning GMO corn imports in the near future, noting USTR could even take steps to “enforce our rights under the U.S.-Mexico-Canada Agreement. “Mexico’s proposed approach, which is not grounded in science, still threatens to disrupt billions of dollars in bilateral agricultural trade, cause serious economic harm to U.S. farmers and Mexican livestock producers, and stifle important innovations needed to help producers respond to pressing climate and food security challenges,” according to USTR.

What does luck have to do with grain marketing? “Luck is where hard work meets opportunity,” according to Brady Huck, risk advisor with Advance Trading. “The recent bull market has made marketing feel relatively easy. I’m afraid it has caused many to forget how fleeting and unforgiving marketing your crops can be.” Huck serves up a fresh round of analysis in today’s Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 279,706 contracts, shifting slightly below Monday’s final count of 281,949.

Soybeans

Soybean prices were unable to follow corn and wheat higher on Tuesday, finishing the session with fractional losses after some light net technical selling today. March futures dipped a penny lower to $14.8925, with May futures down 0.25 cents to $14.87.

Soybean basis bids were steady to weak across the central U.S. after moving 2 cents lower at an Illinois river terminal and 5 cents lower at an Iowa processor on Tuesday.

European Union soybean imports during the 2022/23 marketing year are trending 19% below last year’s pace so far after reaching 223.4 million bushels through January 22. EU soymeal imports are down slightly year-over-year, with 8.95 million metric tons over the same period.

Brazil’s Anec estimates that the country’s soybean exports will reach 49.8 million bushels in January. That’s moderately below the group’s prior projection of 73.5 million bushels from a week ago. Anec is also forecasting Brazil’s soymeal exports at 1.521 million metric tons this month.

What are the odds for wetter-than-normal conditions later this spring? Will planting delays be imminent in some areas? Meteorologist Greg Soulje offered an in-depth analysis to attendees of the 2023 Farm Futures Business Summit – click here to review some highlights.

Interested in learning more about passive income opportunities? Mike Downey, co-owner of Next Gen Ag Advocates, is organizing a new virtual meetup group to discuss just that. “You might be wondering why I’m organizing a meetup to discuss the idea of investing outside of agriculture,” he contends. “This comes just as a group of 20 to 25 professional athletes bought an Iowa farm together who want to invest into Agriculture. However, the ability for many of us in the ag community to buy land in the current land environment is limited by our cash reserves or the ability to subsidize the purchase from off-the-farm income sources.” Click here to learn more.

Preliminary volume estimates were for 196,052 contracts, which was 16% below Monday’s final count of 234,749.

Wheat

Wheat prices captured double-digit gains and trended 1.75% to 2% higher following some bargain buying among lingering doubts that recent precipitation in the Plains will be able to significantly improve dismal crop quality. March Chicago SRW futures added 13.5 cents to $7.3350, March Kansas City HRW futures rose 14.75 cents to $8.3375, and March MGEX spring wheat futures climbed 18.25 cents to $9.06.

European Union soft wheat exports during the 2022/23 marketing year are up 6% from year-ago totals after reaching 666.5 million bushels through January 22. In contrast, EU barley exports have slumped 40% lower year-over-year, with 141.9 million bushels over the same period.

Iraq issued a tender to purchase 1.8 million bushels of milling wheat from the United States, Canada or Australia that will be negotiated starting on January 25. Iraq routinely purchases more than the nominal amount listed in these tenders.

Preliminary volume estimates were for 62,168 CBOT contracts, which was moderately below Monday’s final count of 97,006.

Settlement prices for ag commodities Jan. 24, 2023

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