Missed some grain market news this week? Check out the latest from the Farm Progress staff and bloggers.

Ag Marketing IQ

The December USDA’s Supply & Demand report last week started off with considerable upside momentum in corn and soybeans, but by the day’s end, March corn closed 2 ½ cents weaker at $4.21 ¼ and January soybeans shed 5 ¾ cents, slipping to $11.52 ¾. From a U.S. perspective, the corn report was a non-event as the USDA’s 20-21 ending stocks forecast was sharply unchanged at 1.702 billion bu.

Farmers I’ve talked to over the past 30-plus years have a love/hate relationship with farm programs. They don’t like it in principle. Most sign up, because it makes economic sense. That’s especially true when the rules of the market go haywire. Anyone involved with buying and selling corn and soybeans knows the role of supply and demand. But sometimes markets don’t work.

Thanks to corn carryout now being pegged at 1.7 billion bushels, with a stocks-to-use ratio of 11.5% for the 2020-21 crop year, corn prices are well supported fundamentally. Looking at charts, for the 2021 corn futures contracts, $4 is now considered phenomenal price support. With the December 2020 USDA report showing no changes to the balance sheet, it has been difficult for corn futures to have reason to break out of its current trading range, period. But that may change soon.

Corn export demand continues to run well above its traditional pace. Adding to the positive outlook for exports is the U.S. dollar index, as it is making new monthly lows as we wrap up the 2020 calendar year. This will be the first monthly close below the 100-month moving average since June of 2014.  The weaker the U.S. dollar, the more competitive U.S. exports are on the international market. We anticipate both the soybean market as well as the corn market to find continued support due to the strong export program we are seeing until the world is comfortable that there is another source of beans or corn to supply their import needs.

Exports

Grain export inspection volume for the week ending December 10 was mixed but mostly positive. Corn inspections moved moderately higher week-over-week. Soybeans drifted slightly lower but still turned in big totals. Wheat was this week’s disappointment, after spilling below half of the prior week’s tally.

The latest export sales report from USDA covers the week through December 10. The report was mixed but mostly positive, especially after corn sales climbed 40% above the prior four-week average and bested all trade estimates. Wheat sales also improved slightly from the prior four-week average, while soybeans faced moderate declines compared to recent weeks.

Podcast

People will remember 2020 for decades to come. A lot has happened since January 1, with the coronavirus pandemic thrust front and center for most of the year. But that wasn’t all that happened. And the news wasn’t all bad, either – especially for grain prices, which remain near multiyear highs in some instances. Follow along as we track some of 2020’s highs and lows in the latest Midweek Markets podcast.

Ethanol

October 2020 corn consumption for ethanol rose to 432.7 million bushels – the highest monthly usage rate since February 2020. The last seven weeks of national ethanol production data released by the U.S. Energy Information Agency features the highest levels of ethanol output since the pandemic’s onset. But the latest uncontrolled virus surge could dampen the outlook on ethanol demand in the short run. Marketing year-to-date ethanol production remains nearly 7% lower than the same period a year ago.

Recaps

Soybean futures prices soared past the pivotal $12/bushel benchmark yesterday, reaching six-year highs overnight on dry soil conditions that caused planting delays in Argentina. Strong U.S. corn export data released yesterday from USDA supported corn futures rising to two-week highs overnight. A slightly stronger dollar erased wheat gains in Chicago and Kansas City this morning, though the currency remains at two and half year lows.

Corn prices moved around 1% higher Friday on a round of technical buying spurred by export optimism and doubts that 2020/21 South American production is capable of matching current estimates. Soybean prices carved out another round of double-digit gains after another round of technical buying pushed prices nearly 1.5% higher today, capping off a solid week of gains. Wheat prices were narrowly mixed amid some uneven technical maneuvering Friday, with not much market news to drive prices very far in either direction today.