The CME and Total Farm Marketing offices will be closed Friday, December 24, 2021, in observance of Christmas
MARKET SUMMARY 12-22-2021
March corn breaks resistance. March corn futures closed above the 6.00 mark for the first time since early June. Support may be coming from a variety of areas, including slow farmer selling, inflationary concerns, supply disruptions, and weather. The latest outlook for South America suggests northern Argentina and southern Brazil stay on the drier side through the end of the year and into the first week of January. Managed money is a buyer of agriculture futures this week, of which corn futures are part of the mix.
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CORN HIGHLIGHTS: Corn futures finished firmer gaining 1-1/4 to 4-3/4 cents. May and July lead today’s rally. Weather, inflation, supply disruptions, fertilizer prices, and good margins for ethanol as could be reasons for buying. Short covering once March pushed through resistance at 6.00 was noted. March closed at 6.02-1/2, up 4-1/4 while new crop December gained 1-1/2 to end the session at 5.51-1/2.
Continued concern with weather in South America is likely the most current provider of support. Yet, the technical picture, after breaching resistance also looks strong as is likely creating technical buying, both in the form of short covering and buying of new positions. Today’s ethanol report indicated 106.697 mb used for the grind with week ending December 17. This is down from 110.352 last week but above the weekly pace of 98.94 mb to meet USDA projections. Expectations for slow holiday trade are currently wrong. Volatility is picking up. Prices are high, yet money flow for any of the above-mentioned reasons could have impact.
SOYBEAN HIGHLIGHTS: Soybean futures continued their surge higher closing near 9 to 22 cents higher. March closed 22-1/4 firmer at 13.35 and November up 8-3/4 cents at 12.63-1/4. Weather conditions appear to be turning warmer and drier in northern Argentina and southern Brazil. Soymeal continues to race higher as well due to concerns that supply could become limited due to a smaller Argentine crop as well as demand for lysine.
The near-term trend is turning higher and with significant strength. It could be argued that volume is lighter as this is a holiday week yet what does that matter? If the trade is willing to buy at a higher level it is voting on a current price that could be considered too cheap given weather concerns as well as strong demand. The soybean meal market closed six to nearly $8 higher today as worries about soymeal supply began to mount. March soymeal hast rallied about 70 dollars per ton in 2 months with most of the rally occurring the last two weeks. The technical picture for soybeans continues to suggest higher with March targeting the 14.00 area.
WHEAT HIGHLIGHTS: Wheat futures had another solid day due to strong technicals and a bullish fundamental outlook. March Chi gained 15 cents, closing at 8.14 and July up 16 cents at 8.06. March KC gained 12-1/4 cents, closing at 8.53-3/4 and July up11-1/2 at 8.40-1/2.
Despite limited fresh news today and a US Dollar Index still above 96, wheat is now at three week highs. March Chi traded through the 21 and 40 day moving averages today, which likely triggered some technical buying. Paris milling wheat futures also had strong gains today and are at levels not seen in two weeks. Dryness remains a concern in the US southern plains with no moisture expected in that area for the next 10 days along with above normal temperatures. On the flipside, SRW wheat areas have received plenty of rains with more forecasted over the next week. In other weather-related news, some meteorologists are predicting a January “polar vortex” in the US. HRW wheat cash markets remain strong and stochastics continue to show strong upwards momentum in all three classes. Last week’s train derailment in Oklahoma may have impacted logistics and may have had a temporary, albeit limited impact on the markets. Demand remains strong yet supplies this winter will be low. MPLS wheat remains above ten dollars in the front months, still in a sideways trading pattern. As a reminder, the market has normal trading hours tomorrow but is closed on Friday.
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