Afternoon Market Recap for January 14, 2022

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Bargain buyers lift corn prices.

Soybeans and wheat spill into the red to close out the week

After corn futures fell 4% below prior six-month highs over the past few sessions, prices finally dropped to a level that attracted some bargain buying on Friday as traders placed a few bets against drought-battered crops in South America. That resulted in gains of more than 1.5%. Other crop prices were not so fortunate. Soybeans eased more than 0.5% on a round of technical selling, while the latest selloff in wheat caused some contracts to lose more than 2% today.

Depending on where you live, some winter weather (including snow and ice) may be on its way. Check out the latest 72-hour cumulative precipitation map from NOAA, which covers Saturday through Tuesday, to see what areas are impacted. NOAA’s 8-to-14-day outlook predicts a return to seasonally dry weather for much of the Corn Belt between January 21 and January 27, with cooler-than-normal conditions prevailing across much of the Midwest and Plains during that time.

On Wall St., the Dow tumbled 312 points lower in afternoon trading to 35,801, as the banking sector took on moderate to major losses, and with retail sales dropping 1.9% in December. Energy futures extended their latest bull run, with crude oil up nearly 2.5% this afternoon to trend back above $84 per barrel. Gasoline rose 1.5%, with diesel up 1%. The U.S. Dollar firmed moderately.

On Thursday, commodity funds were net sellers of all major grain contracts, including corn (-16,000), soybeans (-14,000), soymeal (-4,500), soyoil (-3,500) and CBOT wheat (-8,000).

NOTE: Grain markets will be closed on Monday, January 17, in observance of the Martin Luther King Jr. Federal holidays, and Farm Futures will not send out newsletters. Be sure to come back Tuesday morning for the next round of news and analysis from grain market analyst Jacqueline Holland.

Corn

Corn prices stumbled early in Friday’s session but ultimately moved more than 1.5% today after traders began to engage in some bargain buying. A large sale to Mexico announced this morning lent some additional assistance. March futures rose 10.5 cents to $5.98, with May futures up 9 cents to $5.9850.

Corn basis bids were steady to slightly weak across the central U.S. after sliding 1 to 2 cents lower at four Midwestern locations on Friday.

Private exporters announced to USDA the sale of 4.0 million bushels of corn for delivery to Mexico during the 2021/22 marketing year, which began September 1.

South Korea purchased 7.8 million bushels of corn in an international tender that closed earlier today. The grain can be sourced from optional origins but at least some is thought to come from South America or South Africa. The grain is for arrival in late April and early May. In a separate private deal, South Korea also purchased 2.6 million bushels of animal feed corn from optional origins. The grain is for arrival by the end of April.

Many in-person happenings were put on pause during 2020 and 2021 due to the covid-19 pandemic, but we reintroduced key events this past summer such as the Farm Progress Show and Husker Harvest Days. Next week, you’ll get a chance to attend another live event – the 2022 Farm Futures Business Summit, which will be held Jan. 20-21 at the Hyatt Hotel and Conference Center just outside Iowa City. It’s time to reconnect with each other and reignite your passion for agriculture. Click here to learn more and register today!

Preliminary volume estimates were for 236,804 contracts, dropping 29% below Thursday’s final count of 332,079.

Soybeans

Soybean prices fell another 0.5% lower on a round of technical selling today. Expectations are mixed but still mostly bullish about South American yields, despite a recent round of cuts to production estimates from USDA and private consultancies. January futures dropped 8.5 cents to $13.5675, with March futures down 7.5 cents to $13.6975.

Soybean basis bids held steady throughout the central U.S. on Friday.

Private exporters announced to USDA the sale of 100,000 metric tons of soymeal for delivery to Spain during the 2022/23 marketing year, which begins October 1.

Brazil’s Safras & Mercado has made one of the most severe cuts to 2021/22 soybean production estimates to date, falling from a previous forecast of 5.317 billion bushels all the way down to 4.861 billion bushels in its newest projection. The country has struggled with a lot of hot, dry conditions throughout the season, but there’s a fair amount of disagreement over the exact impact as harvest begins.

Chinese soybean imports in 2021 were down 3.8% from the previous year, with a total of 3.547 billion bushels, according to the latest customs data. That’s largely due to lower demand from the country’s livestock sector. China is by far the world’s top buyer of soybeans.

If you haven’t visited FarmFutures.com in a few days, our Friday feature “7 ag stories you might have missed” is one way to quickly catch up on the ag industry’s top headlines. The latest batch of content includes stories on the January WASDE report from USDA, an update from EPA regarding Enlist herbicide, how much of an influence natural gas prices have on fertilizer costs and more. Click here to get started.

Preliminary volume estimates were for 144,657 contracts, spilling moderately below Thursday’s final count of 184,945.

Wheat

Wheat prices continued to erode on Friday after another round of technical selling, as worries over U.S. competitiveness in some overseas markets are still lingering. March Chicago SRW futures slid 4 cents to $7.4275, March Kansas City HRW futures dropped 13.25 cents to $7.4650, and March MGEX spring wheat futures lost 19.5 cents to $8.76.

Over the first 11 months of 2020, customs data showed Russia exported 1.101 billion bushels of wheat. That’s an 11% drop in volume from the prior year, but the value of the grain sold improved by 13% due to higher commodity prices. Russia is the world’s No. 1 wheat exporter.

Algeria is believed to have purchased as much as 22.0 million bushels of milling wheat, sourced primarily from South America and the Black Sea region, in an international tender that closed earlier today. The grain is for shipment in February and March.

South Korea purchased 1.8 million bushels of animal feed wheat from optional origins (but likely sourced from Australia). The grain is for shipment beginning in March.

Taiwan issued an international tender to purchase 1.8 million bushels of grade 1 milling wheat from the United States. Offers must be submitted by January 20, and the grain is for shipment during the second half of March.

Preliminary volume estimates were for 77,272 CBOT contracts, fading a bit below Thursday’s final count of 93,026.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel      
22-Mar 598.25 585.25 596.25 10.5
22-May 598.75 587.25 597.25 9
Soybeans        
22-Jan 1340   1356.75 -8.5
22-Mar 1380 1363.75 1369.75 -7.5
Soymeal                $/ton        
22-Mar 412.5 403.8 405.6 -2.7
Soyoil                    cents/lb        
22-Mar 58.68 57.6 58.46 -0.04
Wheat                    $/bushel        
22-Mar 747.25 737 741.5 -4
22-May 750.5 740.75 744.5 -1.75
KC Wheat        
22-Mar 759.75 743.75 745 -13.25
22-May 762 747.5 748.25 -12.5
MPLS Wheat        
22-Mar 895.5 876 878.25 -19.5
22-May 894.25 875.75 877 -18
Live Cattle             cents/lb        
22-Feb 138.75 136.85 137.85 0.85
Feeder Cattle         cents/lb        
22-Mar 167.425 165.525 166.325 -0.4
Lean Hogs             cents/lb        
22-Apr 88.6 86.025 88.375 3.05
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Feb 84.22 81.58 83.89 1.77
Diesel        
22-Feb 2.6459 2.599 2.6343 0.0258
Unleaded Gasoline   $/gallon        
22-Feb 2.4284 2.3735 2.4215 0.0374
Natural Gas        
22-Feb 4.097 3.933 4.073 0.068
U.S. Dollar Index        
22-Mar 95.255 94.61 95.15 0.375
Gold                      $/ounce        
22-Feb 1829.3 1814.2 1822 0.8
Copper        
22-Jan 4.437 4.4095 4.4135 -0.1205
Fertilizer Swaps     (as of 01/07)  
DAP Tampa-index              810.0 0
DAP-New Orleans              785.4 -17
Urea-New Orleans              694.5 -50
Urea-Middle East              815.0 -48
Urea-Black Sea              787.5 -43
UAN (32%) New Orleans              606.3 0

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