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Afternoon Market Recap for December 23, 2021

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Wheat also stumbles as Santa’s rally runs out of steam


But

It was another day of slow vacation trading. But the Santa Claus rally declined, taking $ 0.08 to $ 0.11 / bushel from yesterday’s five-month high corn price peak. Profit taking was the name of the game today for the few traders left in the markets over the holiday season.

Futures contracts for March, May and July 2022 were flat just above the benchmark of $ 6 / bushel. But even with $ 6 / bushel of corn, Heartland farmers were slow to register further sales as cash offers remained unchanged and growers hedged their bets on higher prices as the season approached. peak in exports, which is expected to intensify at the end of February.

The South American weather was once again responsible for the price movement today. Updated weather forecasts for heat-stressed southeast Brazil show a chance of “limited recovery” in the form of showers at the weekend. This prospect alleviates supply issues for the region’s first and second corn harvests, contributing to today’s liquidation in the Chicago futures market.

Brazil and Argentina are the world’s second and third largest corn exporters, respectively.

Brazilian agricultural consultancy Anec expects the recent dry weather to weigh on 2021/22 maize export volumes for the South American country. Anec revised its forecast for December 2021 corn exports down 12% this morning to 136.0 million bushels. Eikon’s current ship loading projections put December shipment volumes at 153.0 million bushels for December 2021.

China gave the green light to more varieties of genetically modified (GMO) corn overnight after last month’s regulatory review of seed rules to allow more biotechnology to increase yields and ultimately ensure food security national.

The Chinese Ministry of Agriculture and Rural Affairs is also expected to approve seven new varieties of GMO cotton after the public comment period on crops closes on January 17. Three new varieties of corn are subject to public debate before approval, all produced by Chinese seed companies.

New corn seeds are expected to have greater resistance to a greater number of pests, particularly fall armyworm.

Improving the yield of corn crops has been a central concern of the Chinese government, as it continues to prioritize national food security. Maize yields in China are generally significantly lower than harvested in the United States due to the backwardness of cultivation technology, especially in insect resistance.


Soy

Technical sales and profit taking resulted in losses in the soybean market today, but not as much as in corn. The updated forecast points to an “active rain pattern” in northern Brazil in the coming days. Mato Grosso, Brazil’s largest soybean growing region in the north of the country, has benefited from heavy rains this season, but the new forecast could put the region at risk from excessive rain damage and flooding.

South American weather uncertainty offset some of the profit taking, limiting soybean price losses to just $ 0.03-0.06 / bushel during the daily trading session. The pricing environment cooled after yesterday’s four-month high cash sales by farmers in the Midwest.

Indonesia, the world’s largest producer and exporter of palm oil, forecasts production to increase 2.6 percent in 2022 to 51.01 million tonnes. Palm oil is a direct competitor to other edible oils – namely soybean oil – and its price fluctuations often impact the prices of other edible oils.

The higher forecast and the possibility of more normalized prices next year contributed to some weakness in the soybean oil futures market today after posting comfortable gains overnight.

Soybean meal futures continued to rise slightly during today’s session with the nearby contract rising $ 1 / tonne to $ 4,158.8 / tonne at last glance. Higher demand for livestock and poultry during the holiday week and train delays pushed up spot prices at rail and road terminals.

Anec predicts that Brazilian soybean exports increased slightly despite lower loading volumes for corn and persistent negative crush margins at the world’s largest soybean buyer, China. Anec’s latest soybean export forecast pegged December 2021 volumes at 102.0 million bushels, up 0.2%.

Ship data reported by Eikon shows that only a handful of soybean shipments remain from Brazilian ports in the coming days, with total volumes as of December 2021 totaling 90.0 million bushels.


Wheat

Wheat prices continued to sell off from this morning, gaining more bearish momentum throughout today’s trading session on more technical selling.

The trade was late to digest yesterday’s weekly export inspection report and found weekly volumes to be daunting despite increasing global demand for wheat and Russia’s higher export tax , which should make the world’s largest wheat exporter a less competitive wheat producer.

Minneapolis wheat suffered the biggest loss, down $ 0.21 to $ 0.22 / bushel and just above the benchmark of $ 10 / bushel as export loadings of wheat from spring from the United States is slowing down to a trickle. Chicago futures fell from $ 0.17 to $ 0.20 / bushel, with contracts for March, May and July 2022 slipping below the benchmark of $ 8 / bushel.

But keep in mind that with few traders in the market during the holidays, some price movements can be exacerbated and amplify price movements amid lower trading volumes.

Dry weather continues to weigh on Ukraine’s winter wheat crops after a severe drought limited the area sown to winter wheat earlier last fall. Ukrainian agro-industry consultancy APK-Inform noted that poor weather conditions left the winter wheat crop in an overall satisfactory condition in a note released overnight.

Ukrainian farmers were only able to plant 94% of the planned winter wheat area last fall due to persistent dry conditions and limited sowing conditions. Only 15.3 million acres of winter wheat were planted for the 2022 crop last fall in Ukraine, accounting for one-third of all acres of row crops in the Eastern European country. East.

Poor soil moisture conditions could lead to replanting as some farmers wait for the crop to emerge at the time of the crop’s development cycle when plants are expected to go dormant. “Some farmers have reported a possible reseeding of winter crops due to a lack of germinated plants,” APK-Inform observed.

But there is still hope for the harvest despite the dry conditions. The Ukrainian winter wheat crop has been sown in dry soils in recent years to take advantage of a wet and warm winter, allowing the crop to produce a bountiful harvest.

So keep an eye out for international weather forecasts, especially in Eastern Europe. Ukraine is the world’s seventh largest wheat producer and the world’s fourth largest wheat exporter, so a crop shortfall in 2022 could keep global wheat flows tight and prices high.


Weather

Those still complaining about the lack of a White Christmas are about to change their tone, according to NOAA’s near-term predictions. Snowfall continues to hammer the Northern Plains and Upper Midwest from yesterday’s system.

High winds up to 30-35 mph will trigger blizzard warnings and create dangerous driving conditions in both regions, although total snowfall accumulation is not expected to exceed one to three inches. The same system will likely drop another inch of rain in the Eastern Cornbelt over the next 24 hours.

But wait, there is more! The snowy system to the west that dropped 9 feet of snow on Lake Tahoe on the California-Nevada border will begin to move east and could bring the moisture the plains badly need. here the end of the week.

No friends on a powder day, friends !!!


Finance

S&P 500 futures closed 2.5 points (0.05%) at $ 4,779.75 today, with funds moving to tech stocks before year end, thwarting outlook of the index to register its 70e record closing for the year 2021. Concerns over the omicron variant continue to falter due to an exit from the markets and thin holiday trading volumes, which resulted in a choppy trading session today.

Natural gas prices were mixed today as temperatures remained warm. But watch for price developments as winter weather moves east for the remainder of the week.

Read also on our website, FarmFutures.com:

Where is 2022 heading for the corn and soybean markets? I am investigating in my last E-corn-omics column.

Darren Frye has tips for success in 2022 as you reflect on the year 2021. Reward successes, capitalize on your strengths, and keep your goals in mind as you plan for 2022.

Can looking at the Relative Strength Index help you capitalize on marketing opportunities? Roger Wright offers information on the use of this technical tool.

I was a guest on ADM’s recent In the Driver’s Seat podcast where I recapped the 2021 markets. Check it out!

A volatile economic environment is the only certainty in 2022. Find out if your farm’s financial health can withstand the turbulence of the New Year by joining us for the Farm Futures Ag Business Summit on January 20-21, 2022 in Coralville, Iowa!

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