With much of the headlines focused on daily corn export sales this week’s soybeans, under the radar of many, set a record of their own. As of January 21st, some 3.6 million tons of US soybeans have been sold for shipment in the 2021/22 marketing year, the most ever new-crop sales on the books for the date. The 2021/22 marketing year will not start until September of this year, some 8 months from now, but the interest by importers in securing soybeans that far out has been a driving force in new crop soybean prices. While November of 2021 soybean futures have lost some ground in the last two weeks, prices seem to be comfortable in a range between $11 and $12 per bushel for the time being.
All wheats higher this week
March Chicago wheat futures gained 28-1/2 cents this week to close at 663. March KC wheat futures added 24-3/4 cents this week to close at 638. March Spring wheat futures added 21 cents this week to close at 633-1/2. Wheat was a follower of corn this week trending higher overall this week. A wet weather outlook for the US Plains in the next few weeks is seen as a possible bearish force short term for the wheat complex. Continued talk of less available supplies from key exporters such as Russia, Ukraine and Australia have helped provide underlying support on any pullbacks. Spill over strength from the corn market helped push wheat prices higher this week even as the US dollar rallied. Export demand for spring wheat has been slowed by a lack of loading space as corn and soybeans have filled capacity. The Drought Monitor shows 32% of winter wheat and 65% of spring wheat areas are experiencing drought.
Spot Butter Breaks Into New Lows
Last week, the market looked potentially constructive for the butter market as it traded over 12 cents higher on the week. However, this week, the sellers returned in force as the market traded 15.75 cents back lower to trade to new lows for the year. This sell off came on the back of the cold storage report showing an increase of butter in cold storage of 44% year over year. The diminished foodservice purchases for butter continues to be a difficult headwind for the butter market to overcome. The rest of the spot markets were quiet this week with minimal price movement. The lack of any strength in the cheese market remains a disappointment as futures take out the premium they have been pricing in.
Futures started out the week trading lower but ended up stabilizing into the end of the week for the most part. Overall the Class III 2021 average finished at $16.91 vs. $17.38 last week. We also received some negative fundamental information this week as milk production came in at 3% higher YoY in the month of December. This is the second month in a row this has occurred and looks to be a negative for prices if the trend continues. Cheese inventories also came in higher for the month of December as YoY growth was 6% for total cheese.