Missed some grain market news this week? Here's what Bryce Knorr and Ben Potter have been following this week.

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USDA’s big reports released Friday haven’t cleared the logjam in markets facing more uncertainty this week. Futures drifted lower overnight as traders mulled new trade talks in China and the threat of another government shutdown at the end of the week. Hopes of an early start to spring fieldwork are also on hold, with storms today from the eastern Plains through the Ohio River Valley.

Corn and soybean markets are higher this morning, getting lift from several sources. Hopes for this week’s round of trade talks with China buoyed soybeans while both markets found support from reports of smaller production in Brazil. The ag ministry there lowered its estimates below USDA’s projection made Friday, after dry weather in December and January.

After surviving a test of chart support in the wake of Friday’s USDA reports, grain markets are starting to flex a little muscle trying to prove winter lows are in. Whether or not a bottom has been made may depend on key events over the next couple of days, including trade talks with China and a deal in Washington to avert another government shutdown.

The latest round of high-level trade talks between the U.S. and China are underway, with both side sounding nice at the start of the negotiations. As the meeting in Beijing got underway overnight China released customs data for January showing its total soybean imports are down 18%, underscoring the need for a deal.

A bumpy ride for markets this week continued overnight. Soybeans regained some of Thursday’s losses as trade talks with China are set to continue next week in Washington, with officials sounding a little more upbeat on their progress. But wheat prices struggled again following yesterday’s chart breakdown because export news remains disappointing.

Exports

Weekly export inspections showed some more movement from China, which is now neck-and-neck as the top destination for the 2018/19 marketing year after weeks and weeks of inactivity this fall and winter due to the ongoing U.S.-China trade dispute.

After the partial federal government shutdown that lasted more than a month from late December through January, USDA is still releasing stale data. Next week, the agency plans to catch completely up, but today’s export report covers sales from six weeks ago, revealing slow sales to start the new year.

Two export sales were reported to USDA this week. Unknown took 12.9 million bushels of corn in the sales.

Deep Dive

In the latest episode of the Farm Futures Deep Dive podcast, we take a closer look at moving averages and how to incorporate them into your overall grain marketing plan.

Market recaps

Grain markets are mixed this morning, trying to recover from a hammering on Thursday. While yesterday’s weakness focused on China trade talk and exports, today’s more positive tone came after officials sounded positive about progress between Beijing and Washington.

Ahead of the three-day holiday weekend, grain markets dialed in mostly minor changes that left commodity prices mixed Friday. Nearby corn futures were left unchanged in the session, as soybeans gained some small momentum on U.S.-China trade optimism, while wheat continued to slide lower on more technical selling.

Outlooks

Fertilizer Outlook - While a few growers on the southern Plains are getting started with fieldwork, spring seems a distant hope for many farmers in the Midwest and elsewhere. Wet fields, flooded rivers and red ink on income projections could trigger revisions to both cropping and fertilization plans as final choices are made for 2019.

Basis outlook - Slippery roads and flooded rivers made moving grain more difficult last week, and futures markets gave growers little incentive to brave the elements. Basis in the cash trade mostly firmed as a result with the approach of March delivery adding some intrigue too.

Corn outlook - The government shutdown that created a big data vacuum threw longstanding seasonal patterns out of whack. Whether those trends get back on track will go a long ways toward proving whether corn is profitable, both for 2018 inventory and 2019 production.

Energy/ethanol outlook - Crude oil prices are up more than 30% off lows made before Christmas. But the rally may just be getting started, setting up a classic good news/bad news proposition for farmers.

Soybean outlook - The market is always right. Even when, as is the case in soybeans right now, it doesn’t make much sense. Fundamentals remain bearish, despite a few helpful trends. Brazil’s crop is getting smaller and is likely around 75 million bushels less than USDA currently projects. China is buying and taking delivery on U.S. soybeans again, as negotiators try to hammer out a trade deal that’s about much more than agriculture.

Wheat outlook - The wheat market had a bright, shining moment last summer, when threats to crops across Europe and into the Black Sea and Australia raised hopes the time was right for the U.S. to begin selling lots of wheat to a hungry world. But yields overseas outside of northern Europe and Australia turned out better than expected, and those sales by and large were slow to materialize. Business finally picked up as the calendar flipped to 2019, but it may be too little, too late for a wheat market on the verge of life support.