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Friday’s session leaves grain prices mixed

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Afternoon report: Corn fights for modest gains, while soybeans slump 0.75% lower

Grain prices were mixed on Friday as traders went in search of fresh supply and demand clues. Corn prices faced a choppy session, finishing with modest gains. Soybeans slid 0.75% lower as much-needed rains return to Argentina. Wheat prices were mixed but mostly higher after some uneven technical maneuvering today.

Plenty of wet weather is on its way to the Mid-South and Southeast between Saturday and Tuesday, and much of the Midwest and Plains will see at least some measurable rain and/or snow during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts more seasonally wet weather in store for the central U.S. between February 3 and February 9. Cooler-than-normal conditions are also likely during the first week of February.

On Wall St., the Dow moved 134 points higher in afternoon trading to 34,084 following a mixed bag of corporate earnings reports. Energy futures tilted into the red, meantime, with crude oil losing more than 2% to $79 per barrel on news of large Russian stockpiles and steady domestic production. Diesel tumbled more than 3.5% lower, with gasoline down around 1.25%. The U.S. Dollar firmed slightly.

On Thursday, commodity funds were net buyers of all major grain contracts, including corn (+6,500), soybeans (+7,500), soymeal (+5,000), soyoil (+1,000) and CBOT wheat (+7,500).

Corn prices faced a somewhat choppy session but were not able to move the needle much in either direction on Friday. March futures picked up a penny to reach $6.8350, while May futures held steady at $6.80.

Corn basis bids were steady to weak after trending 2 to 5 cents lower at three Midwestern locations on Friday.

Ukrainian consultancy UkrAgroConsult reports that the country’s 2022 corn production has reached 992.1 million bushels, with harvest at 90% completion. Average yields were 98.9 bushels per acre.

Argentina’s 2022/23 corn and soybean plantings are nearly complete. Corn progress reached 94%, while soybean plantings are nearly 99% complete, according to a recent report from the Buenos Aires grains exchange. The drought-stressed country is expected to find further rain relief in the near future, which is great news for Argentina’s farmers, who saw corn production potential slashed by 11% to 1.752 billion bushels.

Corn farmers have generally reduced row spacing over the years from 40” to 30” – will even narrower rows become a more popular production choice in the future? “Pushing plant populations higher will be one of the keys to increasing yields,” according to Myron Stine, president of Stine Seed. “We have some hybrids today that perform at 50,000 plants per acre, but you can’t go that high in 30-inch rows.” Click here to learn more about narrow row production trends.

Brazilian consultancy Safras & Mercado trimmed its estimates for the country’s first corn crop to 933.8 million bushels, citing drought in the production state of Rio Grande Do Sul. However, Safras & Mercado is also anticipating a record-breaking second corn crop, with an estimated production of 3.454 billion bushels.

Preliminary volume estimates were for 304,223 contracts, which was moderately higher than Thursday’s final count of 261,153.

Soybean prices are highly sensitive to South American weather trends right now, and more rain in the forecasts for Argentina had traders locking in profits and engaging in some technical selling that led to moderate losses on Friday. March futures faded 11.25 cents lower to $15.1225, with May futures down 7.5 cents to $15.0725.

Soybean basis bids were mostly steady across the central U.S. on Friday but did move 5 cents higher at an Indiana processor and 3 cents lower at an Iowa river terminal today.

Matthew Kruse, president of Commstock Investments, has completed a ten-day farmland tour of Brazil. “Everyone we talked to was adamant [that volunteer cotton plants] would not hurt their soybean yields, however, I am somewhat skeptical,” he notes. “At the very least, it does create an infestation for boll weevil and other insects, so they will pay for this later with additional insecticide costs.” Click here to read more of Kruse’s observations from the tour.

India’s sunflower oil imports are expected to reach record levels in January, with an estimated 473,000 metric tons as top exporters Russia and Ukraine are both drawing down their large stockpiles. “[Recent discounts] made it lucrative for Indian buyers,” according to Rajesh Patel with GGN Research.

Preliminary volume estimates were for 179,231 contracts, shifting moderately below Thursday’s final count of 211,848.

Wheat prices were mixed after some uneven technical maneuvering on Friday. CBOT futures faced modest cuts, while other contracts were able to move around 0.5% higher following some technical buying. March Chicago SRW futures eased 3.5 cents lower to $7.49, March Kansas City HRW futures added 4.25 cents to $8.69, and March MGEX spring wheat futures firmed 4.25 cents to $9.2225.

Ukrainian consultancy UkrAgroConsult reports that the country’s 2022 wheat harvest is now complete, with a total production of 742.2 million bushels. Average yields came in at 60.2 bushels per acre.

USDA-FAS is now estimating that Australia will post a record-breaking wheat production of 1.360 billion bushels during the 2022/23 season. Estimates were based on ideal conditions in western and southern Australia partially offset by excessive rains in New South Wales.

South Korea purchased approximately 2.5 million bushels of animal feed wheat, likely sourced from Australia, in a private deal that recently closed. The grain is for arrival by the end of June.

Preliminary volume estimates were for 66,100 CBOT contracts, spilling moderately below Thursday’s final count of 79,992.

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