Grains closed mixed on Wednesday:

Mar Corn – 7 ¼ cents/bu (6.02 ¼ )

Mar Soybeans + 5 cents/bu (13.94 ¾ )

Mar Chi Wheat – 9 ¼ cents/bu (7.60 ¾ )

Cdn $ -0.00340 (78.35 cents)

WTI Crude Oil +0.62/barrel (77.61)

The soybean complex provided the only spark of positive pricing news today, as cereal grains just could not find any follow through buying after yesterday’s big gains.  Support in bean futures came from ongoing concerns over heat and dryness in southern Brazil and Argentina.  Crop ratings in provinces in southern Brazil have fallen off of the map as December was pretty much void of moisture (December in southern Brazil for soybean production is like our August in SW Ontario).  Weather maps this afternoon continue to call for hot/dry conditions for the next 10 days, with chances for rain improving in the 11 to 15 day window.  Thoughts of a smaller South American bean crop have some analysts starting to suggest that the USA might be able to pick up additional export business throughout the spring/summer of 2022.

The USDA confirmed a Flash Export sale of soybeans to an unknown destination for 132,000 tonnes – but the sale is for the 2022/23 marketing year.

The Energy Information Administration confirmed in it’s weekly report on petroleum stocks that USA ethanol production last week was 1.048 million barrels per day.  This is a solid production number, but does represent a drop of 11,000 barrels per day.  A little more concerning is the fact that ethanol stocks rose by 683,000 barrels to 21.359 million barrels.  The jump in ethanol stocks is a little more understandable when one considers that gasoline stocks last week rose by 10.1 million barrels to 232.8 million barrels overall.  Average production is running 95 ahead of last year, but ethanol stocks are stil 8.3% below a year ago.

Tomorrow morning, the USDA will release it’s Weekly Export Sales Report for the week ended December 30th, with the trade really unsure as to what to expect, as evidenced by the wide range of expectations (below) for sales of corn and soybeans.  There were not a lot of Flash Sales over the holiday season, so anything close to the high end of expectations would be a bullish surprise (estimates below in thousands of tonnes):

Minutes from meetings of the US Federal Reserve this afternoon indicated that there is the possibility of earlier than anticipated interest rate hikes, as the Fed attempts to control inflation.  The possibility of earlier than predicted interest rate hikes is clearly negative for stock markets, as all US equity indices are now trading lower on the day.  The US dollar is stronger on the news, with our Loonie trading lower as a result – our Canadian dollar had spent most of the day in positive territory before the Fed minutes were released.

On the day, funds were believed to have been sellers of 5,000 corn contracts (now long 356,000), buyers of 2,000 soybean contracts (now long 108,000), and sellers of 6,000 Chicago wheat contracts (now short 28,000).

As we are currently in a full blown weather market, price direction today and tomorrow will be greatly influenced by the next round of weather forecasts.  A continued dry forecast for southern Brazil and Argentina should bring some buyers to the table.