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Afternoon Market Recap for January 24, 2022

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Wheat remains firm on Black Sea uncertainties.

Corn also firms, while soybean prices shift lower

Grain markets were mixed but mostly higher to start the week, thanks in large part to another surge in wheat prices amid ongoing tensions between Ukraine and Russia that could leave potential overseas buyers looking elsewhere to source their grain. Corn prices struggled early but ultimately pulled higher, thanks in part to the ensuing spillover strength, closing with gains of around 0.75%. Soybeans saw double-digit losses, in contrast, closing around 0.75% lower today.

Not much rain and snow are expected to fall on the Midwest and Plains between Tuesday and Friday, although some areas will receive some measurable moisture during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts a return to seasonally wet weather in the central U.S. between January 31 and February 6, with cooler-than-normal conditions creeping back into the Northern Plains and upper Midwest next week.

On Wall St., the Dow tumbled another 643 points lower to 33,622 on the way to a seventh consecutive session in the red. The selloff is seen as a preventive measure against the likelihood that the Federal Reserve will raise interest rates multiple times later this year. Energy futures also spilled lower. Crude oil dropped more than 2% to fall back below $84 per barrel. Diesel was also down around 2%, while gasoline fell 1.75%. The U.S. Dollar firmed moderately.

Last Friday, commodity funds were net buyers of corn (+6,500) and soyoil (+1,000) contracts but were net sellers of soybeans (-6,000), soymeal (-3,500) and CBOT wheat (-5,500).

Corn

Corn prices struggled early today but finished with moderate gains of around 0.75% by the close, thanks in part due to spillover strength from red-hot wheat prices. A large sale to unknown destinations lent additional support. March futures added 5 cents to $6.2125, while May futures picked up 3.75 cents to $6.1775.

Corn basis bids were steady to firm after rising 2 to 3 cents higher at three Midwestern locations on Monday.

Private exporters announced to USDA the sale of 5.9 million bushels of corn for delivery to unknown destinations during the 2021/22 marketing year, which began September 1.

Corn export inspections totaled 43.9 million bushels last week, sliding 10% below the prior week’s tally. It was also on the lower end of trade estimates, which ranged between 35.4 million and 63.0 million bushels. China was the No. 1 destination, with 13.7 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately below last year’s pace, with 647.1 million bushels.

In today’s Ag Marketing IQ blog, Larry Shonkwiler, senior agricultural economist with Advance Trading, breaks down the latest corn supply and demand changes and looks at what that may mean for prices later this year. Click here to learn more.

Preliminary volume estimates were for 322,991 contracts, shifting slightly above Friday’s final count of 312,135.

Soybeans

Soybean prices fought through a choppy session but was unable to gather any positive momentum as this season’s South American harvest marches on, with some beneficial rainfalls headed that way as well. March futures dropped 10.75 cents to $14.0350, with May futures down 11.5 cents to $14.1150.

Soybean basis bids were steady to weak after dropping 3 to 5 cents at three Midwestern locations on Monday.

Private exporters announced to USDA the sale of 4.9 million bushels of soybeans for delivery to China. Half of that total is for delivery during the 2021/22 marketing year, which began September 1, and the remainder is for delivery in 2022/23.

Soybean export inspections trended moderately lower week-over-week, with 47.7 million bushels. Analysts were generally expecting a larger haul, with trade guesses ranging between 44.1 million and 69.8 million bushels. China led all destinations, with 23.5 million bushels. Cumulative totals for the 2021/22 marketing year are still lagging well behind last year’s pace, with 1.277 billion bushels.

In Brazil, the current season’s soybean harvest has reached 5% thanks to an uptick in progress from top production state Mato Grosso, per AgRural. The consultancy reports that yields in Mato Grosso are solid, but further south in areas such as Rio Grande do Sul, production has been hampered by significant drought. AgRural estimates that total production will come in around 4.902 billion bushels.

Farm Futures is projecting that 2022 soybean acres will exceed corn plantings for the second time on record. High fertilizer prices are certainly one huge factor. What else is in play this coming season? Farm Futures grain market analyst Jacqueline Holland takes a closer look – click here to learn more.

Preliminary volume estimates were for 207,054 contracts, trending moderately above Friday’s final count of 176,775.

Wheat

Wheat prices rose substantially higher Monday as tense relations between Ukraine and Russia spurred another round of technical buying today. Could more overseas buyers turn to other sources amid the ongoing conflict? March Chicago SRW futures rose 21.5 cents to $8.0150, March Kansas City HRW futures climbed 26 cents to $8.1925, and March MGEX spring wheat futures added 10.75 cents to $9.4675.

Wheat export inspections firmed 4.3% from a week ago, reaching 14.7 million bushels. That was also on the higher end of trade estimates, which ranged between 9.2 million and 16.5 million bushels. The Philippines topped all destinations, with 4.5 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately below last year’s pace, with 485.7 million bushels.

Russian consultancy Sovecon estimates that the country’s wheat exports will reach 88.2 million bushels in January. That would be the lowest monthly tally since last July, if realized. Russia is the world’s No. 1 wheat exporter.

China sold 17.2 million bushels of wheat on auction late last week, which was 94% of the total amount for sale. That was the third such auction so far this month as the country’s domestic feed sector continues to search out solutions to high corn prices.

Algeria issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins that closes on Wednesday. Algeria typically buys more than the nominal amount listed. The grain is for shipment starting in mid-February.

Preliminary volume estimates were for 97,207 CBOT contracts, moving ahead of Friday’s final count of 80,645.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn               $/bushel      
22-Mar 621.5 609.25 621 5
22-May 618 606.5 617.5 3.75
Soybeans        
22-Mar 1423.75 1382.5 1403 -10.75
22-May 1432 1390.25 1411 -11.5
Soymeal                $/ton        
22-May 395.5 386.3 392.7 1
Soyoil                    cents/lb        
22-May 63.38 61.32 62.02 -1.13
Wheat                    $/bushel        
22-Mar 802.5 775.75 800.5 21.5
22-May 805.75 780.75 804 20
KC Wheat        
22-Mar 819.25 794.25 818 26
22-May 821.5 797.25 820.5 24.5
MPLS Wheat        
22-Mar 950 935.75 948.5 10.75
22-May 945.25 930.75 944 11
Live Cattle             cents/lb        
22-Feb 137.425 135.5 136.375 -1.55
Feeder Cattle         cents/lb        
22-Mar 162.05 158.225 161.45 -1.85
Lean Hogs             cents/lb        
22-Apr 96.325 93.4 95.1 0.15
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Feb 86.09 81.9 82.88 -2.26
Diesel        
22-Feb 2.7152 2.609 2.6176 -0.0736
Unleaded Gasoline   $/gallon        
22-Feb 2.4657 2.3699 2.3891 -0.0533
Natural Gas        
22-Feb 3.912 3.693 3.84 0.058
U.S. Dollar Index        
22-Mar 96.13 95.625 95.905 0.269
Gold                      $/ounce        
22-Feb 1844.9 1829.3 1841 9.2
Copper        
22-Jan 4.485 4.3865 4.426 -0.0865
Fertilizer Swaps     (as of 01/21)  
DAP Tampa-index              810.0 0
DAP-New Orleans              766.1 -19
Urea-New Orleans              639.3 -55
Urea-Middle East              722.5 -93
Urea-Black Sea              705.0 -83
UAN (32%) New Orleans              606.3 0

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