Corn, soy follow wheat’s losses and drift slightly lower this morning
Corn down 1-4 cents
Soybeans down 1-3 cents; Soymeal down $1.00/ton; Soyoil up $0.29/lb
Chicago wheat down 15-18 cents; Kansas City wheat down15-17 cents; Minneapolis wheat down 15-17 cents
*Prices as of 7:00am CST.
Breaking overnight
Japanese grain trading house Marubeni Corp, the owner of Gavilon, will sell the U.S. unit to global commodities trader Glencore. The sale is expected to top $1.125 billion and will also include working capital totals.
Marubeni will not sell Gavilon’s fertilizer business and some grain export terminal facilities to Glencore. The deal is slated to close by March 31, 2023 pending regulatory approval and closing negotiations between the two companies.
For more details, check out this report.
Corn
Corn futures prices dipped $0.01-$0.03/bushel lower overnight, following losses in the wheat market. Improving weather and crop conditions in South America and lower anticipated Chinese grain demand in 2022 supported the losses.
Just across the border to the North, Canadian cattle farmers are struggling to feed livestock amid tight supplies from last summer’s drought and supply chain issues.
But U.S. corn growers have been a key beneficiary of our neighbor’s shortfalls. Marketing year to date U.S. corn shipments to Canada are over five times higher than the same time last year as Canadian livestock producers scramble to source adequate feed supplies to feedlots in Alberta.
“We don’t have any buffer. It’s scary,” Jacob Bueckert, owner of a 20,000-head feedlot near Warner, Alberta, told Reuters. Bueckert estimates that normal feed stocks on hand usually total 14-30 days’ worth. Currently, Bueckert only has five days of feed on hand.
“Excuses aren’t going to feed the cattle.”
About three-quarters of Canadian feedlots face true feed shortages if there is any hiccup in the delivery process. Vaccine mandates for truckers and train operators are increasing concerns about feed availability. Canada now requires cross-border truck and train drivers to provide proof of vaccination.
The Canadian Pacific Railway has been the primary delivery vehicle for U.S. corn to Canada, providing over 8,100 carloads of U.S. corn and dried distillers grains (DDGs) to Alberta-based feedlots last year. But frigid weather has caused significant delivery delays this year that few feedlots can afford.
A potential rail strike in the U.S. could further delay corn shipments to the north. Two unions consisting of nearly 17,000 Burlington Northern-Santa Fe (BNSF) rail operators are threatening the company with a strike after a new BNSF attendance policy implemented this year was found by workers to be too stringent.
Biofuel demand and production propelled ADM to a record fourth quarter profit. However, high energy prices and grain costs ate into profit margins in the fourth quarter of 2021 for the behemoth grain and oilseed processor and sent share prices down 2.2% yesterday morning.
ADM’s fourth quarter net earnings rose to $782 million ($1.38/share) from $687 million ($1.22/share) a year earlier. The results surpassed pre-earnings call analyst estimates though that optimism was nipped by Wall Street traders on the company’s rising production costs projected in 2022.
ADM also projected that U.S. farmers would plant 93 million acres of corn and 87 million acres of soybeans in 2022. Farm Futures calculates that estimate at 93 million acres of soybeans and 90 million acres of corn on high corn production costs outside of key corn producing regions.
The company expects to continue benefiting from the global push for renewable fuels. CEO Juan Luciano expects that crop damage from the drought in South America and potential military action on the Russian-Ukrainian border will keep grain prices elevated this year.
“As we look forward in 2022, we see a positive demand environment across our portfolio,” Luciano said in yesterday’s earnings call. ADM expects U.S. ethanol demand to return to pre-pandemic levels in 2022, supporting the company’s biofuels division.
Soybeans
Soybean futures prices drifted $0.01-$0.03/bushel lower this morning. Old crop futures were holding strong just above the $14/bushel benchmark. The trade has largely digested improving weather and crop conditions in Argentina and Brazil over the past week, with some spillover from losses in the wheat market at play in the early morning trade.
Losses were offset by forecasts for a smaller South American soybean crop, which could boost late season U.S. soybean exports this summer.
Northern Argentina has received nearly eight inches of rain over the past few weeks, according to the Rosario Grains Exchange. Less rain has accumulated in southern parts of the South American country, though the precipitation has been plentiful enough to help offset effects from a La Ni?a-induced drought.
The rains have been dubbed, “water bombs” due to the torrential nature of the storms accompanying the rainfall. “The first important rains of 2022 left a water bomb of more than 200 mm (7.9 inches) in the NW of Buenos Aires,” the Rosario Grains Exchange stated in a report. For some regions, that was an “entire summer’s” worth of accumulation.
“The southern part of Buenos Aires received less than 25 mm (1 inch) between January 19 and 24. In Santa Fe and Cordoba relief has arrived for crops, but it is not enough,” the exchange said.
The rain disparity has reduced major drought and crop concerns throughout much of the country, though Argentina is not yet completely out of the woods in terms of drought. More rains are forecast in the country’s northern and central regions, which will likely continue to alleviate heat stress damage for crops in those regions.
Wheat
Wheat futures tumbled $0.14-$0.18/bushel lower overnight on a round of profit taking from earlier rallies this week on concerns that Russia will invade Ukraine. NATO announced on Monday that it would send forces to Eastern Europe as Russia continues to accrue troops at the border.
A stronger dollar did not help wheat’s cause this morning, either. Falling Chinese demand on a larger corn crop harvested last fall also limited export potential for the wheat complex.
Markets are not yet certain how a potential invasion would play out for grain markets, though the fears continue to escalate rising food inflationary pressures across the globe. “Wheat holds its price, the distant months are traded reluctantly. Farmers want to sell for cash. Everyone is worried but the market does not really believe in war,” a Ukrainian trader told Reuters overnight.
Tensions on the Ukraine-Russian border continue to provide support to higher wheat prices, despite this morning’s technical selloff. In 2021, Russia and Ukraine are expected to be the world’s second and fourth, respectively, largest wheat exporters in the world.
Much of the market chatter over the past week or so has been generated by the potential impacts of a Russian invasion into Ukraine on the grain markets – and with good reason. While much remains uncertain, here is a great reference article from my commentary, Karen Braun at Reuters.
Additionally, here are a few maps from USDA that better illustrate grain flows across Ukraine. Links are also available to USDA’s Foreign Ag Service’s Annual Exporter Guide for Ukraine and an AMS bulletin that describe the significance of Ukraine’s grain transportation system.
Weather
Mostly clear skies will hover over the Midwest today after bookended snowstorms in the West and East largely dissipated overnight, according to NOAA’s short-range forecasts. Areas of the Southern Plains could see a chance of snow today though accumulation will likely be light.
A chance of snow is forecast tonight for the Northern Plains and Upper Midwest. Warmer temperatures are on the way for the Upper Midwest beginning later today and into tomorrow.
There is snow forecast in the mountains tomorrow for our ski trip, so I’m a happy girl!
Financials
Markets are stuck in a holding pattern this morning, waiting for Federal Reserve comments following the conclusion today of the monthly Federal Open Market Committee (FOMC) meeting. Markets are expecting that Fed Chairman Jerome Powell will announce an interest rate hike in March.
Stock indices traded higher with the S&P 500 up 54.25 points (1.25%) at last glance to $4,403.25 after another volatile trading day yesterday.
Also worth a read on our website, FarmFutures.com
Will Chinese grain buyers return for the Year of the Tiger? Bryce Knorr weighs the odds.
Our Farm Futures January 2022 survey found that soybean acreage will top that of corn in 2022 due to astronomical input costs.
Winter wheat acres will see a bump, but total wheat acreage will be limited by lower spring wheat and durum acres, which typically require higher fertilizer applications. What does that mean for your farm? Find out in our survey results article!
Bryce Knorr’s annual hedging study finds soybean hedgers ruled in 2021. For the winning – and losing – marketing strategies for the last year, check out Knorr’s latest column.
Interested in helping your farm achieve new goals in 2022? Darren Frye has three tips to help track your farm’s financial progress.
Morning Ag Commodity Prices – 1/26/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAR ’22 CORN
$ / BSH
6.205
6.15
6.16
-0.04
-0.65%
MAY ’22 CORN
$ / BSH
6.1925
6.14
6.1475
-0.0375
-0.61%
JUL ’22 CORN
$ / BSH
6.1475
6.0975
6.1075
-0.035
-0.57%
SEP ’22 CORN
$ / BSH
5.8275
5.7825
5.805
-0.0175
-0.30%
DEC ’22 CORN
$ / BSH
5.7075
5.655
5.69
-0.0075
-0.13%
MAR ’23 CORN
$ / BSH
5.7825
5.7475
5.7725
0
0.00%
MAY ’23 CORN
$ / BSH
5.8125
5.785
5.8125
0.0075
0.13%
MAR ’22 SOYBEANS
$ / BSH
14.12
13.9375
14.065
-0.0075
-0.05%
MAY ’22 SOYBEANS
$ / BSH
14.205
14.025
14.15
-0.01
-0.07%
JUL ’22 SOYBEANS
$ / BSH
14.25
14.0675
14.195
-0.0075
-0.05%
AUG ’22 SOYBEANS
$ / BSH
14.0125
13.86
13.9675
-0.0125
-0.09%
SEP ’22 SOYBEANS
$ / BSH
13.4475
13.3375
13.42
-0.025
-0.19%
NOV ’22 SOYBEANS
$ / BSH
13.2
13.0875
13.16
-0.025
-0.19%
JAN ’23 SOYBEANS
$ / BSH
13.215
13.1225
13.205
0
0.00%
MAR ’23 SOYBEANS
$ / BSH
13.11
13.0325
13.1
-0.0075
-0.06%
MAY ’23 SOYBEANS
$ / BSH
13.0925
13.0175
13.0775
-0.015
-0.11%
MAR ’22 SOYBEAN OIL
$ / LB
62.9
62.1
62.76
0.25
0.40%
MAY ’22 SOYBEAN OIL
$ / LB
62.97
62.2
62.86
0.26
0.42%
MAR ’22 SOY MEAL
$ / TON
393.4
389.5
391.6
-0.4
-0.10%
MAY ’22 SOY MEAL
$ / TON
392.1
388.7
390.4
-0.9
-0.23%
JUL ’22 SOY MEAL
$ / TON
391.1
387.7
389.4
-0.9
-0.23%
AUG ’22 SOY MEAL
$ / TON
385.5
382.4
383.9
-1.2
-0.31%
SEP ’22 SOY MEAL
$ / TON
378.6
376.3
377.6
-1
-0.26%
MAR ’22 Chicago SRW
$ / BSH
8.175
7.9925
8
-0.18
-2.20%
MAY ’22 Chicago SRW
$ / BSH
8.2125
8.05
8.06
-0.1625
-1.98%
JUL ’22 Chicago SRW
$ / BSH
8.07
7.9275
7.93
-0.1475
-1.83%
SEP ’22 Chicago SRW
$ / BSH
8.05
7.925
7.925
-0.145
-1.80%
DEC ’22 Chicago SRW
$ / BSH
8.0975
7.955
7.9575
-0.145
-1.79%
MAR ’22 Kansas City HRW
$ / BSH
8.3375
8.1625
8.1675
-0.1775
-2.13%
MAY ’22 Kansas City HRW
$ / BSH
8.35
8.1875
8.19
-0.1775
-2.12%
JUL ’22 Kansas City HRW
$ / BSH
8.3175
8.1725
8.1725
-0.1625
-1.95%
SEP ’22 Kansas City HRW
$ / BSH
8.2975
8.2
8.2
-0.16
-1.91%
DEC ’22 Kansas City HRW
$ / BSH
8.3425
8.2575
8.2575
-0.16
-1.90%
MAR ’22 MLPS Spring Wheat
$ / BSH
9.4725
9.2625
9.2875
-0.185
-1.95%
MAY ’22 MLPS Spring Wheat
$ / BSH
9.42
9.2325
9.2575
-0.1825
-1.93%
JUL ’22 MLPS Spring Wheat
$ / BSH
9.35
9.2075
9.2075
-0.1775
-1.89%
SEP ’22 MLPS Spring Wheat
$ / BSH
9.05
9.0125
9.015
-0.145
-1.58%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.04
8.94
8.9425
-0.1275
-1.41%
MAR ’21 ICE Dollar Index
$
96.115
95.9
96.055
0.127
0.13%
MA ’21 Light Crude
$ / BBL
86.54
85.01
86.37
0.77
0.90%
AP ’21 Light Crude
$ / BBL
85.32
83.84
85.16
0.79
0.94%
FEB ’22 ULS Diesel
$ /U GAL
2.7115
2.6661
2.7077
0.0386
1.45%
MAR ’22 ULS Diesel
$ /U GAL
2.668
2.6229
2.6633
0.0341
1.30%
FEB ’22 Gasoline
$ /U GAL
2.4984
2.4533
2.4962
0.0367
1.49%
MAR ’22 Gasoline
$ /U GAL
2.5012
2.456
2.4989
0.0363
1.47%
JAN ’22 Feeder Cattle
$ / CWT
0
#N/A
158.55
0
0.00%
MAR ’22 Feeder Cattle
$ / CWT
0
#N/A
159.85
0
0.00%
FE ’21 Live Cattle
$ / CWT
0
#N/A
137.1
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
140.1
0
0.00%
FEB ’22 Live Hogs
$ / CWT
0
#N/A
87.45
0
0.00%
APR ’22 Live Hogs
$ / CWT
0
#N/A
97.25
0
0.00%
JAN ’22 Class III Milk
$ / CWT
20.29
20.28
20.29
0.01
0.05%
FEB ’22 Class III Milk
$ / CWT
19.88
19.85
19.86
-0.05
-0.25%
MAR ’22 Class III Milk
$ / CWT
20.76
20.54
20.64
-0.17
-0.82%
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
Wheat tumbles on profit-taking. (Comments are updated by 7:30 a.m. Central Time.)
