Grain market currently is anything but steady

Soybean field in Portage County, Ohio on August 18, 2022. Farm and Dairy file photo.

Grain markets on the Chicago Board of Trade have been steady by jerks lately. That phrase, stolen from an Ashtabula County farmer from decades ago, actually means we have not been steady at all.

Not only have we not been steady, but we have also struggled to find reasons for what is going on. Blame it on the end of the year. Blame it on the color of the sky. Blame it on the rain. Wait, that last is from a song by some failed musicians of the ’80s.

In late December, I wrote a column about how nothing happens in the markets between Christmas and the first of the year. Of course, a lot did happen, as we rallied strongly that week. Then, we turned around and gave it all back in a couple of days.

I read recently that the first two sessions of the year represented the worst start to a new year in the last 10 years. March corn futures lost over 24 cents last week. March soybeans lost 311⁄2 cents. Chicago wheat futures were off 46 cents. Happy New Year!

Corn news

There was news to support the losses. Corn had the worst exports in eight weeks. Exports are just half of last year so far. The U.S. Department of Agriculture had anticipated exports to be 16% behind last year, and we are not meeting that poor goal.

China, a huge importer last year, has been disappointing this year. Last year was the first big year for corn to China. We of course hoped that would continue. It has not. China has now bought less than a third of what we sold them last year.

Our prices right now are not competitive on world markets, where we are being beaten by Argentina and, of all places, Ukraine. Argentina’s new crop is in trouble, however.

They are expecting a greatly reduced crop, and have only planted 70% of normal, instead of the average 84% at this time. This is in response to dry conditions that actually have prevented planting. They will not plant if they don’t have enough moisture to germinate.

In this country, we just assume rain will come, and are glad for dry conditions that let us plant.

Internal usage is lagging, also. Gasoline demand is at a 97-week low. That has contributed to an ethanol production at a 97% low. Ethanol margins have improved to 24 cents a gallon. I recently reported that ethanol margins were negative, and I was wrong.


Focus this week will be on USDA reports that are coming, including the annual crop production report, which is the final report for the 2022 crop. We will also get the quarterly grain stocks report and the world agricultural supply and demand estimates.

We are not expecting any surprises to change the markets from these reports, but you never know. These are the second-most crucial reports, after the June reports.


Soybeans have been strong for some time, aided by dry weather in Argentina. The last trading day of the year saw a six-month high for soybeans. Brazil has been considered to be okay for rain, except in the strong production area next to Argentina.

Now we are getting concerns of rain in Brazil, as they are a third behind in rain. Any problem in Brazil is magnified in the bean markets, as they produce three times as many as Argentina.

The January USDA reports are maybe not as important to soybeans as they are to corn, but we need to beware how the carryout estimate for the coming year is reported. Some experts expect the carryout to rise, so we need to be wary. Any rise in carryout is negative to prices.


Wheat markets have taken it on the chin again. We are now bumping against support on the Chicago March futures. We had a low in early December at $7.231⁄2. The morning of Jan. 10, we were off 13 cents since the previous day’s close, at $7.263⁄4. That is not only at support, it is $2.351⁄4 off the high of $9.62, Oct. 10.

Some analysts are talking up a switch from spring wheat to soybeans in the Northern Plains. This comes as soybeans are near their highs, even with recent declines, but wheat is at the lows. This would not be a huge number of acres in the grand scheme of things, but it all matters. It may also provide a little bump to wheat prices.

The wheat markets have conflicting and confusing information. We have low prices, but strong worries about a wheat crop in the Southern Plains that may not even be germinated because of dry weather at planting.

There are reports that some drills have run in Kansas and Oklahoma in December as farmers make a last gasp effort for a crop. The agronomist in me says that, to make a crop, we would need a mid-winter warm spell for germination, and then a return to dormancy to produce a crop. Some say the planting effort is just to produce some straw.

The acres involved have not been included in USDA numbers, so if any wheat is produced from this, it will be a surprise to the market. Most people see the wheat crop as “put to bed,” with no changes coming and lot of crossed fingers for when the crop “wakes up.”


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