Afternoon Market Recap for January 21, 2022

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Corn rallies on export sales.

Farm Futures writers Jacqueline Holland and Ben Potter are on assignment at the Business Summit this week. Conner Bridgman, Ag Risk Management Advisor for Advance Trading, Inc., provides guest commentary below.

Strong export sales for the week and daily announcements of old crop corn and bean sales helped to rallied corn, but profit taking and a favorable forecast for Argentina had soybeans and wheat on the defensive today.

Weather

Heat and drier weather are expected persist through Thursday next week for Northern Argentina, Southern Brazil, and Paraguay as an upper-level high pressure lingers in the area. Central and Southern Argentina are expected to see heavy t-storms to help ease the drought in these areas through the same period. The 6-10 day forecast is calling for seasonably stormy weather for most of Brazil and Paraguay and drier conditions unfolding in Argentina with normal temperatures.

Corn

Corn traded both sides of even today and was able to hold on to a 5.25 cent rally on March futures to close at $6.1625. Export sales this morning exceeded trade expectation at 43 mbu vs the 22.7 needed to meet the USDA projections. Japan and Mexico were the primary buyers, but China also made a showing this week. We saw a sales announcement this morning of 248K MT of corn to unknown destinations for the ‘21/22 marketing year. The US export program typically picks momentum in the Jan – July months and with The South American Safrinha crop just beginning planting, any hiccup in production could certainly bring a new round of sales to the US and tighten the balance sheet.

Soybeans

Soybeans tried to rally back to even at the open on the heels of an export announcement and strong export sales but were unable to follow corn’s rally and ended the day with March futures 11.5 cts lower to close at $14.1425. Rains through early next week in Argentina brought some profit taking to end the week after the strong rally the past two days. Early report of yields in northern Brazil have been respectable, but to a point this was expected, and traders are watching Southern Brazil and Argentina crop development. Export sales this morning were respectable for beans at 24.7 mbu vs the 14 needed to meet the USDA projections. Rumors from earlier in the week that China had bought US beans were confirmed along with a sizable sale to Mexico. The Daily Export Sales announcement this morning showed 132K MT were bought by China for the ‘21/22 marketing year. As we go into the weekend it still feels like we will continue the weather market in Southern Brazil and Argentina as traders will come in Sunday night to review updated forecasts in the southern hemisphere.

Wheat

Lack of moisture and continued tensions over Russia and Ukraine were not enough to support another leg higher in wheat. Profit taking had SRW wheat down 10.25 cents to close at $7.80 on the March futures. Export sales for the week were 14 mbu, which exceeded the trades estimates and the 11 mbu needed to meet the USDA projections. Yesterday’s move might have been a little overstated as the US is still uncompetitive in the world market. The extended forecast is expected to bring moisture into the Great Plains in 8-14 day.

CBOT Quotes as of 2:05 p.m.

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Josh Green is an Ag Risk Management Advisor for Advance Trading, Inc. The risk of trading futures and options can be substantial. All information, publications, and material used and distributed by Advance Trading Inc. shall be construed as a solicitation. ATI does not maintain an independent research department as defined in CFTC Regulation 1.71. Information obtained from third-party sources is believed to be reliable, but its accuracy is not guaranteed by Advance Trading Inc. Past performance is not necessarily indicative of future results.

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