Grain prices perk up after the holidays

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Grain got cheap in the period between Christmas and New Year’s, but a couple of good days have us back near the corn and soybean highs.

Soybeans led the markets higher Monday, Jan. 5. A 37-cent gain by the March soybean futures put the markets back in good shape and gave a positive tone to prices. We had seen big declines after Christmas. March corn futures had put in a high of 4.17 on the 29th, then started the New Year off with a 3.91 1/2 on the first day of trading, more than 25 cents lower. The low back on the 3rd was 3.77 1/4, so that meant we gained 40 cents in December, then lost 25 of it.

Now we have bounced back almost 17 cents of the 25 to trade this Tuesday morning at 4.08 1/4 in early trading. That is up two and a quarter cents for the day.

Similar bouncing in beans

Similarly, in the March soybeans we had a low of 9.91 on the 3rd, then rallied to 10.68 1/4 on the 29th. By the 5th of January, Monday, we were as low as 10.06 1/4, but had a high of 10.47 3/4 the same day. We kept most of the gain into the close, which was 10.45 1/4, up a whopping 37 3/4 cents.
The follow-through on Tuesday morning has us up another nickel.
This means that beans were up 77 cents, then down 62, then up 44 in a month. That is exciting trading, leading us to be near the highs again.

Tracking wheat

The wheat market has a different pattern. There the high was on the 18th, with March futures at 6.77. By the 2nd we were down to 5.74 3/4, a loss of more than $1.02. A rebound has us back to 5.95 3/4, up six and three quarters this morning. Still, that is a big loss.

Wheat world trading news has Ukraine surprising the trade by being able to maintain normal wheat exports, even with the political upheaval there.
It is the U.S. that is actually behind. Last week we shipped out 13 million bushels, but we need to maintain a pace of 18.5 million to meet USDA expectations.

Similarly, we were short of corn exports. We shipped 21.2 million bushels of corn, but need a weekly pace of 34.7 million.

On the other hand, we had a huge spurt of soybean exports. 51.7 million bushels went out this week, but we only need 17.3 to meet projections.

Oil prices

Crude oil prices continue to confound world traders. NYMEX traded crude below $50 a barrel today, Jan. 6, for the first time in five years. The lead contract had a low of 48.47 overnight.

I bought gasoline a couple of days ago for $1.799, so this feels good. I can only wonder what it feels like to price a tanker load of fuel to the farm right now. If only fertilizer and chemicals would have similar adjustments!

Weather

As usual in winter, weather news is moving markets. The cold snap this week is helping corn prices, as the cold weather has trucks parked and not moving grain to town. Meanwhile, the cold increases the feed demand to keep the animals warm.

Foreign weather is mostly a mixed bag, with small market influences so far. Brazil is anticipating above normal temperatures and below normal rain. They are trying to finish out the bean crop over the next couple of months, so this is not good. Argentina, however, is having significant rain at the same time.

The weather is the dominant market factor until we see the Planting Intentions Report from USDA March 31.

This rebound is nice, but it is hard to be actually bullish without solid fundamental news in this country.

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Marlin Clark is an associate of Russell Consulting Group, with a local office in Williamsfield, Ohio. Comments are welcome at 440-363-1803.

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