Grain futures are higher in overnight trading:

Mar Corn + 7 cents/bu (6.13)

Jan Soybeans + 15 cents/bu (13.47)

Mar Chi Wheat + 4 cents/bu (8.18 ¾ )

Cdn $ -0.00245 (77.845 cents)

WTI Crude Oil -1.03/barrel (72.76)

Corn and soybean futures have been higher since the start of trading last night, while Chicago wheat futures have traded both sides of unchanged (with wheat trading as much as a nickel per bushel lower at one point).  Corn and beans currently sit within a couple cents of their highs for the day.  Technically, all grains remain in a bullish trend.  Trading volumes are expected to be light today, as a lot of market participants are absent, as they continue their holiday celebrations.

Rising global cases of the Omicron COVID variant have outside markets a bit on edge, as fears of further restrictions have some speculators worried that travel, and therefore energy consumption, might be negatively impacted.  As money continues to look for a place to invest as a hedge against inflation, agricultural commodities are looked at as a good option, so this morning, new money is looking to own grains.

That flow of money is supported by weather forecasts that continue to show building heat and dryness in Argentina.  Despite excellent growing conditions through the beginning of December, we are now starting to see that the good/excellent crop ratings in Argentina are falling.  Central Brazil is forecast to get decent rains in the coming week, but the southern third of the country (particularly the southeast) continues to look dry.  Finally, the USA southern Plains are also forecast to remain dry for the next 2 weeks, which is a definite reversal of pre-Christmas weather predictions.

Wheat futures continue to lag the strength in corn and soybeans, as global wheat production forecasts are being bumped higher.  Argentine wheat production has been bumped higher by 500,000 tonnes, to 21.5 million tonnes, as better than expected yields are fuelling the increase.  In addition, Russia’s 2022 wheat production forecast has been bumped to 81.3 million tonnes (up from 80.7), due to favorable weather conditions.

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