TFM Daily Market Summary 01-13-2022

The CME and Total Farm Marketing offices will be closed Monday, January 17, 2022 in observance of Martin Luther King Jr.


After Wednesday’s USDA reports, could corn export numbers be more of a concern?  The USDA shifted 75 million bushels away from export demand, and over to ethanol demand on the latest supply & demand tables.  This move was triggered by the strong ethanol market, but also recent weeks of sluggish export sales and shipments.  Export inspections on Monday were 39.8 million bushels for last week, and behind the needed pace of 53.9 million bushels to reach the USDA yearly export estimate.  In addition, weekly export sales this week were disappointing at 457,700 MT, below market expectations.  The USDA raised production on the report by finding additional acres harvested, this in total moved projected carryout to 1.540 billion bushels, and above market expectations.  While the overall demand may be good, and south American weather is threatening, the rise in U.S. carryout may make the front end of the corn market more cautious.

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CORN HIGHLIGHTS: Corn futures were under pressure today from three areas – slow exports, improved weather in the South American forecast, and a weakening technical picture. March futures lost 11-1/2 cents to close at 5.87-1/2 and December gave up 0-1/2 to end the session at 5.57-3/4.

A major cool down in temperatures for well over to 100 degrees the next three days to 70’s and 80’s by next week, coupled with increased chances of rain, had futures on the defensive as well. Today’s close below an upward trending channel line as well as below the 40-day moving average could potentially be setting the stage for a drop to near 5.65 on March futures. The 50-day moving average held as support. Today was a solid close below the 40-day moving average, the first time this has happened since early October. What this suggests is the corn market is losing upward momentum and the bearish key reversal posted on December 28th continues to look more important as a potential near term if not long-term top. Another poor weekly export sale figure was noted today confirming the nearby pace of sales has not been supportive for higher prices. Today’s figure was 18 mb. This brings the total year to date to 1.632 bb or 67.5% of expected year sales of 2.425 bb. Yesterday the USDA trimmed to total expected sales by 75 mb.


SOYBEAN HIGHLIGHTS: Soybean futures were under selling pressure on the over-night trade and continued lower throughout the day session, finishing with sharp losses of 8 to 26 cents. January futures lead the way lower. The last trading day for January is tomorrow. March futures gave up 22 cents to close at 13.77-1/4 while November lost 8 cents to end the session at 13.04-1/2. Cooler and wetter in the forecast for regions of the southern hemisphere that are suffering from hot and dry was the primary reason for today’s lower prices.

Export sales at 27 mb were termed neutral. Year to date sales are1.559 bb compared to 2.038 bb a year earlier for the same time. Total sales for this year are forecasted at 2.050 bb implying that current sales are 75% of the expected total. That sounds good yet sales usually tail off into mid-winter as importing countries, mainly China source southern hemisphere supplies. The technical picture looks supportive but bear- spreading was noted with old crop contracts losing ground to new crop. November bean futures closing only 8 cents lower at 13.04-1/2 was encouraging. Yet, with higher fertilizer and nitrogen costs we strongly feel soybean acres could be on the rise. Despite today’s down move there was no technical damage on charts. Farmer selling will likely pick up if it looks like improved conditions in South America will occur. China made a statement indicating they would likely increase soybean production to be more self-sufficient. While that may be the case this is something that is a long way off in time yet may have partly pressured prices today


WHEAT HIGHLIGHTS: Wheat futures continued their liquidation today. A somewhat unfriendly report yesterday, coupled with poor export sales caused a lower trade. March Chi lost 11 cents, closing at 7.46-3/4 and July down 12-3/4 at 7.42-1/2. March KC lost 18-1/4 cents, closing at 7.59-3/4 and July down 14-1/4 at 7.64-3/4.

The marketplace viewed yesterday’s report with a bearish attitude when looking at wheat. The gain of 30 mb to the carryout (now at 628 mb) did not help. Adding to the bearish tone today was the export sales report, which indicated an increase of only 9.7 mb of wheat export sales. Despite the USDA lowering their export estimate from 840 mb to 825 mb, this is still behind the pace needed to meet their goal. Totals are now at 593 mb which is 23% behind last year. The results of the Iraq tender also came as a disappointment today, with none of the wheat being sourced from the US (rather, it was fulfilled by Australia). Paris milling wheat futures gapped lower on today’s session too, adding to pressure in the US market. If you choose to take the silver lining viewpoint however, it could be argued that these gaps tend to get filled. And though repeating it seems unnecessary at this point, dryness in the US southern plains remains also remains a bullish item of note.


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John Heinberg

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