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Morning Market Review for January 21, 2022

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Corn weakens in overnight trade. (Comments are updated by 7:30 a.m. Central Time.)

Farm Futures writers Jacqueline Holland and Ben Potter are on assignment at the Business Summit this week. Larry Shonkwiler, Senior Agricultural Economist at Advance Trading, Inc., provides guest commentary below.

Corn

Corn opened lower; traded slightly higher on spillover support from a sharply higher bean market, but ended the day lower.

Funds were even in yesterday’s trade. The overnights are again weaker with CH off $.03.

The trade is closely monitoring the Russian/Ukraine situation while forecasts for some of the more crop challenged areas of Argentina and Brazil look to give minor relief heading into the end of January. There was some trade talk of China in for perhaps 1 MMT of U.S. corn but as yet, not confirmation.

A strong ethanol production number of 1.053 K bp which was well above the 2.013 mbpd trade average did little to support the corn market. Export sales are delayed until this morning because of the MLK holiday – trade expectations are in the 20-29 mbu range.

Beans

Old crop beans were the leader closing up $.34½ @ $14.25¾ yesterday. The overnights were sharply lower at one point but have since climbed back to being down only 7-8 cents.

Funds were again noticeable buyers with 8 K SB, 2 K SBM and 9 K SBO. Several drivers contributed to yesterday’s rally:

  • Palm Oil made new contract highs and pulled BOH 3.5% higher to 62.88
  • China was rumored to be buying US beans as a hedge against a potential further decline in the Brazil crop

China has been booking October beans the past couple of weeks and there is some talk they were in for a couple million tonnes of beans for late summer loading.

The trade will be closely watching this morning’s export sales report with 22-44 soybean expected; 100-300 K MT of SBM and 0-15 SBO. Note another new high in Malaysian palm oil futures with April values up over 2 ½% overnight.

Wheat

Wheat futures closed mixed on Thursday after the early week strength. MGEX was 5c firmer in the March contract while HRW was down 3½ and CME Red wheat down 6¼.

Managed money was thought to have sold 2 K on the day. Markets are taking a breather overnight with HRW and SRW each 7 lower; Minneapolis wheat is 2-3 weaker.

The Russian threat with Ukraine is still a driving issue although the White House is a little vague on its strategy.

Dryness in the HRW region remains worrisome with nearly 100% of the area in some level of drought, but it is only Jan. 21.

CBOT Quotes as of 7:14 a.m. CST

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Larry Shonkwiler is the Senior Agricultural Economist at 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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