Grain prices were mixed but mostly higher to start the week. Soybeans were back in the spotlight, tracking around 1.5% higher thanks to solid export inspection data from USDA along with dry forecasts for Argentina. Corn followed suit – barely – inching 0.1% to 0.2% higher. Wheat prices were split between winter wheat gains and modest losses for spring wheat futures.
Most of the Corn Belt should remain dry between Tuesday and Friday, while parts of the Mid-South and Southwest could see another 2” or more rainfall during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s new 8-to-14-day outlook predicts seasonally warm weather east of the Mississippi River between February 6 and February 12, with wetter-than-normal conditions likely for most of the country next week.
On Wall St., the Dow dropped 175 points in afternoon trading to 33,802 as investors await the next interest rate decisions from the Federal Reserve, which will be made later this week. Energy futures were also in the red today. Crude oil faded more than 2% lower to $77 per barrel. Diesel tumbled 4.75% lower, while gasoline fell 3.5%. The U.S. Dollar firmed moderately.
On Friday, commodity funds were net sellers of soybeans (-4,500), soymeal (-3,000), soyoil (-1,000) and CBOT wheat (-1,500) contracts. Funds were roughly even when trading corn contracts last Friday.
Corn
Corn prices attempted to follow soybeans higher on Monday but failed to gather much positive forward momentum. March futures added 0.75 cents to $6.8375, while May futures picked up 1.25 cents to $6.8125.
Corn basis bids eased 2 cents lower at an Iowa processor and 3 cents lower at an Indiana ethanol plant while holding steady elsewhere across the central U.S. today.
Private exporters announced to USDA the sale of 4.4 million bushels of corn for delivery to Japan during the 2022/23 marketing year, which began September 1.
Corn export inspections faded moderately lower week-over-week to 20.8 million bushels in the week ending January 26. That was also below the entire range of trade estimates, which came in between 23.6 million and 37.4 million bushels. Mexico was the No. 1 destination, with 6.1 million bushels. Cumulative totals for the 2022/23 marketing year are still significantly behind last year’s pace so far, with 473.9 million bushels.
Ukraine’s agriculture producers’ union estimates that the country’s 2023 corn plantings will spill 30% to 35% lower in 2023 due to multiple challenges, including farmer finances, electricity blackouts and more. That would lead to a production of around 669.3 million bushels. Additionally, “a large volume of corn remains in the fields today - according to various estimates, about 20% is still in the fields. It is not a problem to harvest it, but it needs to be dried and it is a huge expense,” according to Denys Marchuk, deputy chair of the Ukrainian Agrarian Council.
“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 today’s Ag Marketing IQ blog – click here to learn more.
Through January 24, speculators increased their net long position for corn by another 8,821 contracts to reach 122,686.
Preliminary volume estimates were for 225,270 contracts, sliding moderately below Friday’s final count of 304,223.
Soybeans
Soybean prices nabbed double-digit gains on U.S. export optimism along with dry weather in Argentina, which sparked plenty of technical buying on Monday. March and May futures each rose 24 cents higher to close at $15.3350 and $15.2850, respectively.
Soybean basis bids rose 5 to 10 cents higher at three Midwestern processors on Monday while holding steady elsewhere across the central U.S. today.
Soybean export inspections were relatively strong after moving slightly ahead of the prior week’s tally, reaching 68.2 million bushels. That was also on the very high end of analyst estimates, which ranged between 33.1 million and 69.8 million bushels. China was by far the No. 1 destination, with 51.8 million bushels. Cumulative totals for the 2022/23 marketing year are trending slightly below last year’s pace so far, with 1.322 billion bushels.
Brazilian consultancy AgRural reports that the country’s 2022/23 soybean harvest is 5% complete through last Thursday, versus the prior season’s pace of 11%. The group also noted “irregular rainfall” in Rio Grande do Sul which could lead to “new productivity cuts” in future crop reviews.
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Through January 24, speculators trimmed their net short position of soybeans by 26,025 contracts to 104,739.
Preliminary volume estimates were for 205,212 contracts, staying moderately above Friday’s final count of 179,231.
Wheat
Wheat prices were mixed but mostly higher following an uneven round of technical maneuvering on Monday. March Chicago SRW futures picked up 2.25 cents to $7.5225, March Kansas City HRW futures added 4.75 cents to $8.74, and March MGEX spring wheat futures dipped 0.75 cents lower to $9.2075.
Wheat export inspections were solid last week, with 16.4 million bushels. That was toward the higher end of analyst estimates, which ranged between 10.1 million and 17.5 million bushels. Japan was the No. 1 destination, with 3.6 million bushels. Cumulative totals for the 2022/23 marketing year are slightly below last year’s pace so far, with 485.8 million bushels.
Algeria issued an international tender to purchase 1.8 million bushels of durum wheat that closes on Wednesday. The country often purchases more than the nominal amount listed, and shipment will be between mid-February and late March, depending on origin.
China auctioned off 5.1 million bushels of its state wheat reserves on January 18, which was 100% of the grain offered for sale. China has conducted a series of similarly sized auctions in recent months to boost local supplies and quell high prices.
Through January 24, speculators increased their net short position of wheat by 9,958 contracts to 84,237.
Preliminary volume estimates were for 73,751 CBOT contracts, tracking slightly ahead of Friday’s final count of 66,100.
