1/27/2022

Jan 27, 2022


1/27/2022
Corn, wheat, and oats were largely weaker following a sharp rally in the dollar index.  The dollar was negative for the livestock trade, as well, but was not able to contain the soy complex.  The conversation was mostly one sided in soy: "Buy! Buy! Buy!" Someone, or something, is here to buy this market with beans, oil, and meal all higher.  The Brazil state of Parana trimmed 35% off of its previous projection for the 2021/22 soybean crop, from 18.4 mln tonnes down to 12.8 mln tonnes.  Argentina crop condition ratings have improved after recent rains with soybeans now 38% g/e (30% last week, 15% last year), corn was 32% g/e (22% last week, 22% last year).  The export sales report showed corn sales outperforming trade estimates with 1.402 million tonnes sold.  Soybean sales were in the upper end of the range with 1.026 million tonnes sold.  For what it’s worth, I have my doubts on the severity of total production loss in S. America.  With the added acres in Brazil and Argentina seemingly no longer struggling for moisture, it does not seem apparent that the global supply of grain will come up short, especially if we didn't run out last year.  We are at the point of needing to see evidence of true demand at these market levels to really sustain them.  Another market agenda item to ponder is February crop insurance pricing.  

After setting a new contract high early this morning, Dec 22 corn made a large reversal, closing nearly the daily lows.
corn-(1).jpg

Soybeans set fresh contract highs for the second consecutive day.  March eclipsed its old contract high of 1445’4 and traded a new high of 1456’4 before fading back.  We did manage to finish the day above the previous high but trade was shaky over the last 20 minutes.
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