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Futures trade in narrow ranges, Bryce Knorr releases results of latest Farm Futures survey.

Compiled by staff

January 25, 2019

3 Min Read

Missed some market news this week? Here’s a quick look at what Bryce Knorr and Ben Potter have been writing about this week.

Morning audio

Russian and Ukraine issued more rumblings they may restrict wheat exports this morning, supporting prices a little overnight. But gains are limited because previous rumors like this turned out to be all smoke and no fire. Corn and soybeans are a little lower, joining a global parade of caution as markets reopen after a three-day weekend the U.S. facing the same concerns: the government shutdown and trade talks with China.

Prices charts tell the story of the grain market better than anything these days. Futures are trading in narrowing ranges, suggesting they’re ready to move when news emerges. While trade talks between the U.S. and China could break the logjam next week, the patter could drag out until USDA reopens to begin releasing data again.

Corn and soybeans are little changed this morning while wheat drifts lower. A blast of Arctic air blanketed the central Midwest doesn’t look like it will singe bare winter soft red winter wheat fields south of I-70 despite the chill. Financial markets moved higher in Asia and Europe, and U.S. stock indexes suggest a stronger open on Wall Street today as talks rev up over trade and the government shutdown.

Farm Futures survey

In the latest Farm Futures survey, growers said they want to boost corn and cotton acreage, while cutting back on crops affected by China’s import tariffs on soybeans and sorghum. And uncertain prices and winter wheat planting delays could force a reduction in most classes.

Exports

Despite the ongoing partial government shutdown, USDA continues to provide grain export inspection numbers. And China has made a welcome appearance in the latest set of data, according to Farm Futures senior grain market analyst Bryce Knorr.

Market recaps

Money may talk, but talk looks like money today, at least in the market. News that lower level discussions will precede next week’s round of negotiations between the U.S. and China was seen as a sign of progress, helping keep soybeans poised near a breakout on charts.

President Donald Trump announced the federal government will reopen for the first time in more than a month – but the news came too late in Friday’s session to significantly affect grain markets today. Soybeans turned instead to dry forecasts in South America, boosting prices another 1% higher. Corn followed suit, but not wheat, which eased slightly on some technical selling to finish out the week.

Outlooks

Fertilizer Outlook - Adages from the worlds of finance and real estate are the best way to describe a fertilizer market with wide price disparities: “Time is money” and “Location, location, location.” Where you farm and when you plan to buy products could mean a differential of hundreds of dollars a ton in a market that could see key developments internationally this week.

Basis outlook - Corn basis was steady on average last week. That may not seem like much, but it was something of an accomplishment considering the challenges faced by the cash market.

Energy/ethanol outlook - Growers who watch grain market basis know that strong basis is the time to lock in the cash portion of their price. Flip that perspective 180-degrees when buying inputs, which means it’s time to lock in diesel costs for spring, and if possible, fall.

Corn outlook - January’s USDA reports on production, grain stocks and demand are usually key turning points in the marketing year that make the first weeks of the new year a watershed. With this annual data dump postponed by the government shutdown, traders are trying to figure out if they dare risk moving on without the official metrics provided by USDA.

Soybean outlook - Officials from the U.S. and China decided to add a third day of trade negotiations to their meetings this week. But while the two sides are talking, silence from USDA could keep the soybean market on hold.

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