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December 17th - Midday Market Commentary

12/17/2021
December 17th - Midday Market Commentary

Grains are solidly higher at midday:

Mar Corn + 6 ¾  cents/bu (5.98)

Jan Soybeans + 19 ¼ cents/bu (12.96 ½ )

Mar Chi Wheat + 7 ¼ cents/bu (7.77 ¾ )

Cdn $ -0.00185 (77.97 cents)

WTI Crude Oil -1.43/barrel (70.95)

Grains are showing independent strength this morning, despite the fact that outside commodities and equities are generally lower.  External markets are being adversely impacted by ongoing speculation regarding the spread of the Omicron COVID variant and how that is going to impact economic performance in the wake of renewed restrictions on travel and on business activity.  Grains have been somewhat insulated from previous COVID shut downs as countries have attempted to stockpile food resources.  Ultimately, people have to eat.

This morning, the USDA did confirm some welcome Flash Export Sales for 2021/22 shipment:

  • 132,000 tonnes of soybeans sold to China
  • 33,000 tonnes of soybean oil to India

Domestic demand for corn and soybeans remains stellar, with ethanol and soybean crush margins currently in extremely profitably levels.  Those industries are looking to maximize the tonnes that they process, and can currently lock in big margins for whatever volumes that the grower is willing to sell.

Weather has turned friendly for grains as well, with dryness building in southern Brazil and Argentina, which is typical for a La Nina year.  As well, the high winds and dry conditions in the southern Plains are also adversely impacting USA hard red winter wheat production potential.

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