HAPPY NEW YEAR TO ALL!!!!!

Grains closed mostly lower on Friday:

Mar Corn – 2 ¾ cent/bu (5.93 ¼ )

Mar Soybeans + ¾  cent/bu )13.39 ¼ )

Mar Chi Wheat – 9 cents/bu (7.70 ¾ )

Cdn $ +0.00665 (79.13 cents)

WTI Crude Oil -1.67/barrel (75.32)

Another holiday trading day that was void of any substantial new information regarding grains.  Initially, futures values tried to bounce higher after Thursday’s steep sell off.  At one point, corn was up 3 cents/bu, soybeans were up 10 cents/bu, and Chicago wheat traded as much as 8 cents/bu higher.  However, support waned as the day went on, as the factors that allowed the market to break yesterday remain in play today.  There was slight profit taking on Friday, but the main reason for selling the market was the ongoing possibility of precipitation in dry areas of southern Brazil, Paraguay, and parts of Argentina.  Admittedly, the forecast rains are not drought breaking in any way, but as we head into a weekend, the fear that is present is “what happens to the market on Monday morning if precipitation levels are heavier than forecast?”.

Fundamentally, grain demand remains excellent in North America, as processing margins for both corn and soybeans are extremely good.  Inflation continues to rise, which is typically very friendly for commodities, and specifically food grains.  Drought conditions in Argentina and southern Brazil have allowed crop ratings on crops to fall in recent weeks, although those crop ratings were off the charts good a month ago, so today’s ratings are still close to historical averages, with Argentina’s corn crop currently rated as 58% good/excellent.  Argentina’s soybean crop is rated at 56% good/excellent, versus 42% last year and 88% in 2020.

Argentine corn planting is 71% complete versus 75% on average, while Brazil’s first corn crop is 93% planted versus 95% last year on this date.  Brazilian soybeans are 97% seeded versus 100% last year, while Argentina’s beans are 81% planted versus 87% at this time last year.  Soybean harvest in Brazil started in Mato Grosso midweek, and thoughts that vessels could start loading in another 2 weeks or so has analysts postulating that the USA bean export program to China could wind down prematurely once those South American beans become readily available.

The US dollar tumbled against most world currencies today.  Despite USA equity markets closing the year close to record high territory (Dow futures currently at 36,317), uncertainty over rising COVID infection levels, a weakening US economy, and an increase in US dollar money supply had traders betting today on a weaker US dollar.  The resulting strength in our Loonie will have a negative impact on producer basis bids in 2022, if the dollar continues to climb above 79 cents.

Funds were though to have been sellers of 2,000 corn contracts today (now long 348,000), while being buyers of 1,000 soybean contracts (now long 92,000), and sellers of 4,000 Chicago wheat contracts (now short 25,000).

Floyd Howard | Grain Merchandising Manager | Wanstead Farmers Co-operative Company Ltd. |

PH: 519-845-3301 | Cell: 519-328-8481 | e-mail floydh@wansteadfarmerscoop.com