Weekly Crop Commentary - 1/28/2022
Jan 28, 2022
Ed Nienaber
Vice President, Grain Division
The grain future markets find themselves trading close to life of contract highs as we approach the end of January. Soybeans have rebounded some fifty cents on the week, while corn has added close to twenty cents. The trade is anticipating additional spring sales to China as we continue to hear of less than expected bean yields out of the southern hemisphere. Most, if not all, energy futures continue to trade firmer on Russia-Ukraine conflict, also supporting grain and oil prices. As we move into February, the government price support program for new crop insurance programs will take center stage. Commodity Classic will be held later in February and early indications are 92.0 corn and 88.0 bean acres for the upcoming crop year. The USDA will release acreage estimates as well as grain stock figures on Thursday, March 31. We will see a plethora of private forecasting in the coming weeks. Local basis continues to be steady with not much signs of improvement as the higher future prices and mild winter is keeping a steady supply of grain moving to the Ohio processors. Please continue to be safe and have a great week.
Wes Bahan
Director of Grain Purchasing
Good afternoon and welcome to another wild and wacky week of the grain markets. Last week we heard about a large amount of grain purchased from China, but we didn’t get any confirmation. The USDA on Monday confirmed a vessel of old crop and a vessel of new crop to China. They also confirmed a two-vessel purchase of old crop to unknown destinations, which most believe to be China. We did not get another confirmation until this morning. It was a four-vessel sale to unknown, two-vessel sale to Mexico, and a four-vessel sale of new crop to China. No corn sold, and not near what was expected on soybeans. So, what drove beans to gain 87 cents on the week? Well, we still have some issues in southern Brazil and Argentina from dry weather, the ability to get freight, and inflation fears seem to keep buyers interested in the markets. The March soybean contract this week broke new highs, and once that happened, we appeared to have a good bit of technical buying. There was a good amount of selling interest from the farmers when cash corn broke $6, and soybeans broke $14. Just this morning we had Fall 22 delivery beans hit the $13 mark, and that too created a good bit of selling interest. The weather this week slowed down deliveries with snow and bitter cold temperatures, but next week looks to be moderate and that should allow for a big week of receipts.
Lisa Warne
Grain Origination, Mechanicsburg (Region 3)
Welcome to the end of January already. The theme this week on Wall Street and Chicago seems to be volatility. Wheat has taken huge jumps in both directions, looking to close the week nearly a dime higher overall. Soybeans have been on a rocket ship since Tuesday, with old crop gaining nearly 60 cents. Nearby beans are more than a dollar higher than we were two weeks ago! Old corn is up 20 cents on the week, but it seems to be mostly along for the ride.
Vegetable oils have given strength to soy oil, sending it to contract highs and bringing soybeans with it. Malaysia’s government announced policies that will keep palm oil for domestic use rather than export, causing palm oil to reach record highs. This took soy oil, a palm competitor, up with it. All the veg oil demand along with belief that the South American soybean crop will be smaller than published estimates, is driving soybeans higher.
Wheat volatility comes with the ebb and flow of tensions between Russia and Ukraine. As Karen Braun of Reuters pointed out earlier this week, Ukraine accounts for 12% of global wheat exports, ranking 3rd in the world. They also account for half of the world’s sunflower oil exports (1st), 16% of global corn exports (4th), 18% of global barley (2nd), and 19% of global rapeseed (3rd). As a major exporter, any conflicts in Ukraine could affect global supplies of these agricultural products.
With markets like these, it’s hard to know when to pull the trigger. Perhaps consider taking advantage of small grain sales a little at a time so it doesn’t all slip through your fingers if it turns negative. Give us a call so we can discuss your marketing plans. Have a great weekend!
Ralph Wince
Grain Merchandiser, Canfield (Region 5)
Good afternoon, another active week in the grains. Both corn and beans have added more risk premium into their prices. The bean market is concerned that the South American crop will be smaller than some expect. Just today there is talk that China will be back in by June, buying more beans out of the U.S. and that has the market excited again. This week on the corn side, we have continued to see the market getting more concerned about a Russian invasion into Ukraine and disrupting corn and wheat shipments out of that part of the world. The interior corn markets are not in need of any nearby corn, and basis levels have continued to soften. But, the export markets basis levels at the Gulf continue to add some basis premium. The biggest issue today is the availability of nearby barge freight. The markets have continued to steadily work higher and I think we should be rewarding this rally with some sales. Give us a call for more detailed information on what we see going on in the markets. We have a number of tools to help you with raising your overall weighted average. Have a great weekend!
Sarah Harner
Grain Merchandiser, Marysville (Region 4)
A busy and volatile week with March bean contracts up 80 cents since Monday with strength coming from the complex markets. Lower South American crop is increasing the demand here in the US for beans. Corn is also leaning higher, with the high demand and China needing bushels. As far as US acreage estimates, I believe we will read reports of unstable numbers until the acres are truly in the ground. Estimates from the USDA Perspective Plantings Report, that will be especially important to tune into this year, will be released at the end of March. Other news effecting the markets is the Russia/Ukraine situation that is still floating in the air. If you haven’t heard yet, the Fed announced there is an expectation to raise the interest rate in March. From the weather front, this week we saw a decent amount of snow and the temperature looks to improve here in the Marysville area over the next week. Now is the time to capture higher prices with all three markets in the green today! Stay safe and enjoy your weekend.
Haylee VanScoy
Grain Merchandiser, Upper Sandusky (Region 2)
Finishing out Friday on a strong note. It’s been a busy week as customers continue to price dp bushels in the $6.00-6.25 range on corn and $13.80-14.60 range on beans. We did see strong export sales numbers released yesterday. 55.2 mil bushels of corn vs. estimates of 23.6-47.2 were sold with Japan and Mexico being the largest buyers. As for beans, we saw 37.7 mil bushels vs. estimates of 18.4-47.8 sold primarily to China and Mexico. It appears that we’re continuing to see some purchases from China as SA harvest is a little behind their anticipated harvest schedule. Beans have also seen a strong rally from a sharp increase in the palm oil market.
We have also seen a decent amount of new crop sales this week and target offers with corn around $5.40 delivered to Upper and beans around $13.15 today for this fall. Russian and Ukrainian tensions will continue to add volatility to this market. Now is the time to re-evaluate and assess your marketing plans as spring will be here before you know it! I’m happy to sit down for a farm visit to discuss what opportunities are available to you and your operations and help you figure out the best solutions that meet your needs. I also want to remind customers that our Upper Sandusky Grain Market Outlook Meeting is coming up on February 16th at 6 pm! Please rsvp by February 9th at 419-294-2371. Look forward to seeing you all there! Have a wonderful weekend and stay warm.
Vice President, Grain Division
The grain future markets find themselves trading close to life of contract highs as we approach the end of January. Soybeans have rebounded some fifty cents on the week, while corn has added close to twenty cents. The trade is anticipating additional spring sales to China as we continue to hear of less than expected bean yields out of the southern hemisphere. Most, if not all, energy futures continue to trade firmer on Russia-Ukraine conflict, also supporting grain and oil prices. As we move into February, the government price support program for new crop insurance programs will take center stage. Commodity Classic will be held later in February and early indications are 92.0 corn and 88.0 bean acres for the upcoming crop year. The USDA will release acreage estimates as well as grain stock figures on Thursday, March 31. We will see a plethora of private forecasting in the coming weeks. Local basis continues to be steady with not much signs of improvement as the higher future prices and mild winter is keeping a steady supply of grain moving to the Ohio processors. Please continue to be safe and have a great week.
Wes Bahan
Director of Grain Purchasing
Good afternoon and welcome to another wild and wacky week of the grain markets. Last week we heard about a large amount of grain purchased from China, but we didn’t get any confirmation. The USDA on Monday confirmed a vessel of old crop and a vessel of new crop to China. They also confirmed a two-vessel purchase of old crop to unknown destinations, which most believe to be China. We did not get another confirmation until this morning. It was a four-vessel sale to unknown, two-vessel sale to Mexico, and a four-vessel sale of new crop to China. No corn sold, and not near what was expected on soybeans. So, what drove beans to gain 87 cents on the week? Well, we still have some issues in southern Brazil and Argentina from dry weather, the ability to get freight, and inflation fears seem to keep buyers interested in the markets. The March soybean contract this week broke new highs, and once that happened, we appeared to have a good bit of technical buying. There was a good amount of selling interest from the farmers when cash corn broke $6, and soybeans broke $14. Just this morning we had Fall 22 delivery beans hit the $13 mark, and that too created a good bit of selling interest. The weather this week slowed down deliveries with snow and bitter cold temperatures, but next week looks to be moderate and that should allow for a big week of receipts.
Lisa Warne
Grain Origination, Mechanicsburg (Region 3)
Welcome to the end of January already. The theme this week on Wall Street and Chicago seems to be volatility. Wheat has taken huge jumps in both directions, looking to close the week nearly a dime higher overall. Soybeans have been on a rocket ship since Tuesday, with old crop gaining nearly 60 cents. Nearby beans are more than a dollar higher than we were two weeks ago! Old corn is up 20 cents on the week, but it seems to be mostly along for the ride.
Vegetable oils have given strength to soy oil, sending it to contract highs and bringing soybeans with it. Malaysia’s government announced policies that will keep palm oil for domestic use rather than export, causing palm oil to reach record highs. This took soy oil, a palm competitor, up with it. All the veg oil demand along with belief that the South American soybean crop will be smaller than published estimates, is driving soybeans higher.
Wheat volatility comes with the ebb and flow of tensions between Russia and Ukraine. As Karen Braun of Reuters pointed out earlier this week, Ukraine accounts for 12% of global wheat exports, ranking 3rd in the world. They also account for half of the world’s sunflower oil exports (1st), 16% of global corn exports (4th), 18% of global barley (2nd), and 19% of global rapeseed (3rd). As a major exporter, any conflicts in Ukraine could affect global supplies of these agricultural products.
With markets like these, it’s hard to know when to pull the trigger. Perhaps consider taking advantage of small grain sales a little at a time so it doesn’t all slip through your fingers if it turns negative. Give us a call so we can discuss your marketing plans. Have a great weekend!
Ralph Wince
Grain Merchandiser, Canfield (Region 5)
Good afternoon, another active week in the grains. Both corn and beans have added more risk premium into their prices. The bean market is concerned that the South American crop will be smaller than some expect. Just today there is talk that China will be back in by June, buying more beans out of the U.S. and that has the market excited again. This week on the corn side, we have continued to see the market getting more concerned about a Russian invasion into Ukraine and disrupting corn and wheat shipments out of that part of the world. The interior corn markets are not in need of any nearby corn, and basis levels have continued to soften. But, the export markets basis levels at the Gulf continue to add some basis premium. The biggest issue today is the availability of nearby barge freight. The markets have continued to steadily work higher and I think we should be rewarding this rally with some sales. Give us a call for more detailed information on what we see going on in the markets. We have a number of tools to help you with raising your overall weighted average. Have a great weekend!
Sarah Harner
Grain Merchandiser, Marysville (Region 4)
A busy and volatile week with March bean contracts up 80 cents since Monday with strength coming from the complex markets. Lower South American crop is increasing the demand here in the US for beans. Corn is also leaning higher, with the high demand and China needing bushels. As far as US acreage estimates, I believe we will read reports of unstable numbers until the acres are truly in the ground. Estimates from the USDA Perspective Plantings Report, that will be especially important to tune into this year, will be released at the end of March. Other news effecting the markets is the Russia/Ukraine situation that is still floating in the air. If you haven’t heard yet, the Fed announced there is an expectation to raise the interest rate in March. From the weather front, this week we saw a decent amount of snow and the temperature looks to improve here in the Marysville area over the next week. Now is the time to capture higher prices with all three markets in the green today! Stay safe and enjoy your weekend.
Haylee VanScoy
Grain Merchandiser, Upper Sandusky (Region 2)
Finishing out Friday on a strong note. It’s been a busy week as customers continue to price dp bushels in the $6.00-6.25 range on corn and $13.80-14.60 range on beans. We did see strong export sales numbers released yesterday. 55.2 mil bushels of corn vs. estimates of 23.6-47.2 were sold with Japan and Mexico being the largest buyers. As for beans, we saw 37.7 mil bushels vs. estimates of 18.4-47.8 sold primarily to China and Mexico. It appears that we’re continuing to see some purchases from China as SA harvest is a little behind their anticipated harvest schedule. Beans have also seen a strong rally from a sharp increase in the palm oil market.
We have also seen a decent amount of new crop sales this week and target offers with corn around $5.40 delivered to Upper and beans around $13.15 today for this fall. Russian and Ukrainian tensions will continue to add volatility to this market. Now is the time to re-evaluate and assess your marketing plans as spring will be here before you know it! I’m happy to sit down for a farm visit to discuss what opportunities are available to you and your operations and help you figure out the best solutions that meet your needs. I also want to remind customers that our Upper Sandusky Grain Market Outlook Meeting is coming up on February 16th at 6 pm! Please rsvp by February 9th at 419-294-2371. Look forward to seeing you all there! Have a wonderful weekend and stay warm.