Missed some market news this week? Here's the coverage from Farm Futures you need to help you make informed marketing decisions.

Ag Marketing IQ

Phase One trade deal, derecho, USMCA and record exports among ag market news of 2020. Read a top 10 list of stories in agricultural markets from 2020 from Brian Basting of Advance Trading.

Though energy, livestock and the standing of the U.S. dollar suffered last year, other contracts posted double digit gains. Grains, stocks, metals and financials all ended higher, despite turmoil caused by COVID-19, Bryce Knorr writes.

Earlier this week, March corn futures were briefly able to climb above the $5 per bushel level. A $5 price point had not been seen for corn futures since May of 2014. March soybean futures cleared the $13.50 resistance level this week, with a run up to $13.78-1/4. Like corn, soybean futures have not seen these prices since 2014. Corn and soybean futures have every reason to be at the price points represented now. Ending stocks continue to shrink, and global demand for grain remains strong. The question facing traders now is, how much bullish sentiment is priced into the market already, ahead of the January 12th USDA report?

The survey says

On the eve of USDA’s final production estimates for 2020 grain production, a new January 2021 Farm Futures survey indicates soybean stocks will shrink to historic levels. The Farm Futures survey projects 2020 soybean yields at 49.9 bpa – a 1.6% decrease from current USDA yields of 50.7 bpa and the third highest U.S. soybean yield on record. The survey found U.S. farmers estimate the national corn yield at 175.2 bushels per acre, which is slightly below USDA’s current estimate of 175.8 bpa and, if realized, would shrink the 2020 corn crop by 50 million bushels to 14.547 billion bushels – the third highest crop and yield in history. The survey estimates 2020 U.S. wheat yields at 48.3 bpa, down 2.8% from the current USDA projection of 49.7 bpa. While the updated wheat yield would be the third largest on record, the total crop will shrink by 50.3 million bushels according to Farm Futures’ calculations to 1.776 million bushels – the 45th largest U.S. wheat crop in history.

Advanced marketing class

I get the sense that a common response to a near-record late summer and fall price rally is, “I sold too early!” That’s a great example of looking back at old decisions. I choose to look forward and note that 2021 pricing opportunities should be on your radar.

Exports

USDA’s latest grain export inspection report, covering the week through December 31, didn’t ring in any bullish news for the agency’s first report of 2021. Corn, soybeans and wheat each saw a week-over-week decline, with all crops landing on the lower end of analyst estimates.

USDA’s latest batch of grain export sales data, covering the week through December 31, held little positive news for a sluggish holiday week. Soybean old crop sales fell to a new marketing-year low, while corn and wheat totals also disappointed after landing on the lower end of trade estimates.

Export sales were reported on three days this week. Unknown destinations took 4 million bushels of corn on Wednesday. China took 7.5 million bushels of soybeans on Friday. On Thursday, unknown destinations took soybeans.

E-corn-onomics

Harvest will soon begin on Brazil’s soybean crop. There are big dynamics at play in South America this year that will likely impact U.S. soy growers. Brazilian soybean stocks continue to be scarce after exporting the majority of its supplies to China earlier last year. China only bought 100.7 million bushels of Brazilian soybeans in November 2020, down 29% from the previous year.

In the wheat sector, 2021 seems to be starting off eerily similar to 2020. A dry winter in the Plains paired with above average temperatures could cause even more winterkill this year compared to last, especially if an Arctic blast sends temperatures into sub-zero territory without adequate snow cover. But there is still some time to decide the fate of the U.S. winter wheat crop in 2021, despite dry long-term forecasts.

Friday's market recaps

Corn futures prices are well within striking distance of the crucial $5/bushel benchmark this morning as the market continues to worry about South American supplies amid dry weather and an Argentine export ban. Ongoing South American supply concerns as well as U.S. supply worries bolstered soybean prices this morning after yesterday’s round of profit-taking. March futures rose $0.1375/bushel to $13.69 on the news while May futures added $0.1475/bushel to $13.685. Slow trading activity in Russia on account of holiday market closures limited price action in the wheat complex this morning. U.S. traders largely finalized their positions ahead of Tuesday’s highly anticipated WASDE reports, which will shed more light on winter wheat acreage planted in the U.S. last fall.

Corn prices moved moderately higher Friday on a round of technical buying partly spurred by expectations of tightening U.S. stocks. Soybean prices overcame a modest stumbling block Thursday to post double-digit gains once more on Friday, closing around 1.5% higher on a round of technical buying sparked by expectations for dwindling domestic stocks. Wheat prices were mixed Friday on an uneven round of technical maneuvering.