Grain prices saw another mixed round of technical maneuvering on Tuesday. Winter wheat contracts saw the most upside after frigid temperatures in the Midwest and Plains stirred up some fresh winterkill concerns. Soybeans were also slightly firm today as traders continue to monitor weather forecasts in South America. Corn prices attempted and ultimately failed a bid to move higher, closing with losses of around 0.5%.
An ice storm is wreaking havoc on parts of the Southwest and Mid-South, but large portions of the Midwest and Plains will see no additional moisture between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s latest 8-to-14-day outlook predicts wetter-than-normal conditions for most of the central U.S. between February 7 and February 13, with seasonally warm weather likely for the eastern half of the country.
On Wall St., the Dow improved another 218 points in afternoon trading to reach 33,935 on the heels of some positive corporate earnings reports from General Motors, Exxon Mobil and others. Energy futures tracked higher, with crude oil up more than 0.75% to $78 per barrel on positive domestic demand. Diesel and gasoline each clocked gains of around 2%. The U.S. Dollar softened moderately.
On Monday, commodity funds were net buyers of all major grain contracts, including corn (+1,000), soybeans (+9,500), soymeal (+7,000), soyoil (+3,000) and CBOT wheat (+1,500).
Corn
Corn prices tested some positive forward momentum this morning but gave it up by the close, posting losses of around 0.5% as traders engaged in some end-of-month positioning. March futures dropped 4.5 cents to $6.7925, with May futures down 4 cents to $6.7725.
Corn basis bids were largely steady to firm after tracking 4 to 8 cents higher across three Midwestern locations on Tuesday. A Nebraska processor bucked the overall trend after spilling 5 cents lower today.
Brazil’s Anec estimates that the country’s corn exports will reach 196.5 million bushels in January. That’s 4% below the group’s prior projection it made a week ago.
Brian Basting, commodity research analyst with Advance Trading, notes that there is a tremendous amount of market information that producers can access on a daily basis. “While some information is timely and relevant, some so-called news might best be described as “noise” as it relates to developing and implementing a customized risk management strategy for your operation,” he points out. “This is not to say that the news is inaccurate or unrelated to agriculture. In fact, monitoring news that impacts prices helps one stay on top of what moves the markets. Solid marketers, however, are skilled at blocking out the “noise” that is being received at all hours of the day.” Basting offers some advice on how to defend against short-term factors that may sway your marketing plan in today’s Ag Marketing IQ blog – click here to learn more.
“Post-mortems aren’t only for crime scene shows on TV,” notes grain market analyst Bryce Knorr. “Before signing off on your marketing plan for 2023, make sure you know what worked – and didn’t work – for your sales strategy in 2022.” Knorr reviews several corn selling strategies to see which ones paid off in yesterday’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 264,218 contracts, shifting moderately higher than Monday’s final count of 225,270.
Soybeans
Soybean prices shook off moderate overnight losses to finish with small gains following a choppy session on Tuesday. March futures added 2.75 cents to $15.38, while May futures picked up 0.75 cents to $15.3025.
Soybean basis bids held steady across the central U.S. on Tuesday.
Ahead of a key USDA report out on Wednesday, analysts think the agency will show a December soybean crush of 188.0 million bushels. That would be below November’s volume of 189.4 million bushels and year-ago results of 198.2 million bushels, if realized. Soyoil stocks are expected to increase to 2.249 billion pounds through December 31.
Brazil’s Anec estimates that the country’s soybean exports will reach 44.9 million bushels in January. That’s 10% below the group’s prior estimate from a week ago. Anec also estimates that Brazilian soymeal exports will reach 1.437 million metric tons this month.
China’s sow herd increased by 0.6% in December (43.9 million), and the country’s pig herd increased 1.9% in December (452.6 million). This is a significant driver of grain needs for the world’s No. 1 soybean importer.
Egypt’s state grains buyer has purchased 35,000 metric tons of vegetable oils in a series of international and local tenders that recently closed. The purchase is comprised of 25,000 MT of soyoil and 10,000 MT of sunflower oil.
Where is the best place to invest your time? Darren Frye, CEO of Water Street Solutions, explores how to avoid constantly fighting fires so you can prioritize long-term business planning in his latest Finance First blog – click here to learn more.
Preliminary volume estimates were for 238,084 contracts, which was 16% above Monday’s final count of 205,212.
Wheat
Wheat prices trended higher on Tuesday following a round of technical buying today. Winter wheat prices saw more upside due to winterkill worries, while spring wheat prices only scraped together very small gains. March Chicago SRW futures rose 9.5 cents to $7.62, March Kansas City HRW futures added 5 cents to $8.7875, and March MGEX spring wheat futures picked up a penny to reach $9.2250.
A week from now, Statistics Canada will issue its next crop stocks report. Ahead of that report, a group of 10 analysts is estimating that the agency will show all-wheat stocks at 819.4 million bushels. Analysts also anticipate Canadian canola stocks will come in at 515.9 million bushels.
Jordan purchased 2.2 million bushels of milling wheat from optional origins (likely sourced from the Black Sea region) that closed earlier today. The grain is for shipment in June.
Technology is an increasingly critical part of the agriculture industry, as was evident at the 2023 CES global event held in Las Vegas earlier this month. That’s because John Deere was a part of the introductory keynote address, and many other products were showcased that feature automation, precision farming and much more. Click here to view a slideshow of some of these new offerings.
Preliminary volume estimates were for 98,692 CBOT contracts, moving moderately above Monday’s final count of 73,751.
