January 6, 2022
Good morning,
Corn is down 3, soybeans are down 13 and wheat is down 15 to start the day. The combination of the Fed raising rates and a change to slightly wetter weather in Argentina has the market lower today.
The Federal reserve signaled that there is a possibility of faster than expected rate hikes and stimulus withdrawal. Minutes from the Fed’s December meeting had shown that a tight jobs market and unrelenting inflation could require the U.S. central bank to raise rates sooner than expected and begin reducing its overall asset holdings. This has put some pressure on commodities overnight.
Total DOE weekly fuel ethanol production declined slightly this week to 1.048 million barrels per day, down from 1.059 mln bpd last week but still above 935k bpd on the comparable week last season.
USDA Export sales were: 48,600 mt of wheat, 256,100 mt of corn, 382,700 mt of beans, 22,800 mt of sorghum, 3,900 mt of beef and 19,400 mt of pork. Slowest sales of the season.
The forecast for weather in South America for the next 7-10 days is very hot and dry in Southern Brazil and Argentina. There is however a significant change to wetter weather from Jan 14-22nd. This rain must happen, but for now the forecast will drive the market. It is going to be really hot over the next week in Argentina with temps in the 100’s. This is the most stressful weather they have seen in years.
Have a safe day!
Garry Gard
920-348-6844
December 31, 2021
Good morning,
Corn and beans are starting the day higher after a week of lower trade. Corn is currently up 2 and soybeans are up 8.
We are down 20 cents in corn from the highs posted on Monday with concern over Omicron, better South American weather and funds moving money to other markets.
The forecast in South American calls for light rains early next week in Southern Brazil and heavy rain in Northern Brazil. Argentina has a small chance of an inch of rain in the South. Temps are going to heat up again over most of Argentina.
I believe the biggest mover the last couple days has been the funds moving money.
2021 had a lot of ups and downs in the markets, but a lot more up in all commodities. Corn is trading 30% higher and soybeans are 20% higher than a year ago this time. A strong export program along with smaller South American and Canadian crops were the drivers. Unfortunately, the market increases have been eclipsed by input costs for the 2022 crop year. Producers that are holding out on sales because they think input costs are reason for the markets to trade higher should be careful. The markets are not concerned with how much it costs to grow a bushel of corn or soybeans. Supply and demand are the drivers of every market. If/when South American weather changes the world supply will change. I do not see us trading below $4 for corn and $11 for soybeans on the CBOT anytime soon, but good prices need to be captured when they are present.
Thank you to all of our producers we partnered with in 2021. We look forward to working together in 2022 to make your operation be even more successful.
Here’s to hoping 2022 prices may be more stable than 2021 and that your year may be filled with great opportunities!
Have a Happy New Year
Garry Gard
920-348-6844
December 27, 2021
Good morning,
Markets are higher as we start the week with corn up 4 and soybeans up 18.
The forecast for South American weather is still hot and dry this morning. The next 10 days will see limited rainfall in Southern Brazil and Argentina. The long-range forecast has a breakdown of the high-pressure ridge, temps will cool down some but not totally go away. This looks like a significant change for temps in Argentina, but there isn’t very much rain developing.
The current forecast is bullish for South America, but the long-range has a chance for a significant change. This isn’t a forecast the market would normally rally on. The longer the Funds get in beans, the more the volatility can increase. The funds are very long corn positions, which make that market very crowed if they must move to the exit door.
South American weather will be the driver as we close out the year and head into the January crop report. Weather can be a very tricky market mover as we have all seen in the past. Forecasts move the market long before the actual weather which increases volatility. I would suggest being proactive in any old and new crop corn and soybeans sales you have to make; this weather will be changing.
Have a Safe Day!
Garry Gard
920-348-6844
December 23, 2021
Good morning,
Overnight the markets were softer but have opened 3 higher in corn and 2 higher in soybeans. I look for an unchanged to slightly higher close today as traders head into a 3-day weekend with the holidays.
The Funds are taking notice of the weather in South America and buying. The bean position can get a lot larger in coming weeks as last year they peaked out at 270,000 long contracts with a 16-dollar price on January 12th. If South American weather stays bullish, this could go for a while. Corn hit 6 dollars yesterday but struggled to get there and will be difficult to keep there without support from the bean markets. The Funds are long a lot of corn!
The forecast for South American weather is like yesterday’s run with very heavy rain in Northern Brazil. Some areas are going to see a foot of rain in the next week. Southern Brazil and Argentina look to be dry with almost zero chance of rain in the next 10 days. This is the forecast they trade, and it is still bullish this morning.
Reminder there are no markets on Friday!
Have a Safe Day!
Garry Gard
920-348-6844
December 22, 2021
Good morning,
Markets opened higher this morning with corn up 5 and soybeans up 20 as traders add premium to the markets with hot and dry forecasts for Southern Brazil and Argentina over the next two weeks.
Soybean crops in Parana, one of Brazil’s largest-producing states, were rated lower for a third straight week due to hot, dry weather, according to figures on the state’s rural economics agency website. 57% of crops were rated good on Dec. 20, down from 71% a week earlier and 78% a year ago,13% of crops rated poor vs 6% in the previous report. 71% of Parana’s soy are flowering or at grain filling stages, during which it is more susceptible to drought losses.
The forecast for South American weather is a little different from yesterday with very wet weather in North and Eastern Brazil, 2-12 inches. Southern Brazil and Argentina have moved into a bone-dry weather pattern. The chance of a change in weather on the longer-term map has vanished this morning, showing a continuation of the doom out at least 15 days. The hot air mass looked like it might retrograde, but this morning it looks more intense. This a very bullish weather pattern. You will see the intense heat of 90’s-100’s in the bottom map for South America.
The funds are driving the prices higher based on weather and that could continue for the next few days. Once the weather forecast changes, and it will, things will drop back off to last weeks levels. I would advise producers to take advantage of this late December rally to get some old and new crop sales on the books. I would also advise putting offers in above the market with your buyers. Some of these rally’s change quickly with new forecasts being released and you don’t want to miss out.
Have a Safe Day!
Garry Gard
920-348-6844
