Editor's note: Catch Randy Martinson and AgweekTV's Michelle Rook every Friday after markets close on the Agweek Market Wrap at agweek.com.

On Friday, Dec. 3, Stats Canada released their final 2021 crop production report. The report was negative wheat as production came in below trade expectations. The report estimated all wheat production at 21.65 million metric tons versus expectations of 21.2 million metric tons and 35.2 million metric tons last year (-39%). Spring wheat production was estimated at 16.01 million metric tons versus expectations of 14.7 million metric tons and 25.8 million metric tons last year (-38%). Durum production was estimated at 2.65 million metric tons versus expectations of 3.6 million metric tons and 6.57 million metric tons last year (-60%).

The report was bullish canola with production coming in at its lowest level since 2007. Stats Canada reported canola production at 12.6 million metric tons, lower than the average trade estimate of 12.8 million metric tons and far below last year’s 19.5 million metric tons. The cut in production was due to drought conditions as Saskatchewan’s yield was down 48.5%, Alberta’s yield was down 31.1%, and Manitoba's yield was down 28.3% from last year.

The grains put in a solid performance on Thursday, Dec. 2, as once the grains traded down to major support levels, buy orders were triggered, which helped the grains bounce off support. It seems like the grains are setting up to trade in a tight trading range for the short term as the market sorts through what is fluff and actual news that will have a real impact on the market.

Seasonally the market is quiet this time of year as the market officially transitions from the U.S. production year to the South American production year. But this year that transition has sped up due to Brazil’s rapid planting progress and early harvest season. Due to the early planting, it is likely Brazil will be harvesting soybeans by month end, which is two to four weeks early.

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Argentina’s officials are now estimating their corn crop at a record 55 million metric tons due to the increased acreage. The soybean crop is estimated at 44 million metric tons. But these estimates are sure to change as weather forecasts are calling for Argentina to remain dry for the next two weeks. Southern Brazil is also expected to remain dry, which is bringing support into the U.S. soybean complex. Thursday, Dec. 8, brought confirmation of rumored sales from the day before, as an unknown destination bought 164,000 metric tons of U.S. soybeans and China was in and bought 130,000 metric tons.

U.S. wheat sales have been nothing short of disappointing. There is a lot of interest in importing wheat around the world as the tender list for wheat remains long (Saudi Arabia, Egypt, Jordon, Tunisia, and Japan are just a few looking to buy or have just bought some wheat), but very little is U.S. origin.

As for the U.S. wheat crop, traders are expecting 2022’s winter wheat acreage to be less than expected due to wet conditions in the soft red winter wheat region that resulted in some acres being prevented from planting. The hard red winter wheat region remains dry as does the Pacific Northwest. But not all the news for wheat has been friendly. Rumors are that Russia is looking to set their Feb. 15 to June wheat export quota at 9 million metric tons, a 2 million metric ton increase from last year.

Corn is slowly trying to divorce itself from wheat as corn regains its dominance in the feed ration. Corn’s price must be responsive to any up move in soybean’s price, especially if it doesn’t want to lose 2022 acreage. Higher 2022 input costs are helping corn hold its gains as well. Gains were kept in check from reports that Argentina is estimating producers will plant 18 million acres of corn versus earlier estimates of 17.5 million acres and versus USDA’s projection of 16.8 million. As of Dec. 2, Argentina is reporting corn planting progress at 56% complete versus 55% average. The corn crop is rated 90% good/excellent.

Soybean exports continue to be steady as an unknown destination was in and bought 122,000 metric tons of U.S. soybeans on Dec. 3. However, private analysts think U.S. soybean exports to China for 2021-22 could drop below 30 million metric tons versus 35.5 million metric tons last year. This is due in part to the expected record production and earlier availability of Brazil’s soybean crop.

Weather forecasts are calling for Australia to see a drying trend the second week of December, which should allow for harvest activity to get going in some regions. Rain is expected to return next week. The harvest issues Australia is experiencing helped to push their price of wheat to highs not seen since 2008.

Monday, Dec. 6, saw the grains open lower in what looked to be a risk off session. Early selling was tied to a stronger U.S. dollar, profit taking and technical selling. But the grains faked most of us out and managed to push higher into the close. By the end of the session decreased fears about the new COVID variant and South American weather concerns helped to push the grains higher.

Wheat did see support from reports that Russia is continuing to flex their military muscle against Ukraine. Russia has moved 175,000 troops to the Russian/Ukraine border in what looks like to be a move to bring the two countries one step closer to military action.

Weather forecasts for southern Brazil and Argentina continue to be concerning as dry conditions are expected to dominate the regions for the next 10 to 14 days. This could result in yield reduction, but it appears that unless a severe drought hits Brazil, no matter what they are going to have a bigger soybean crop than last year, mainly due to the sharp increase in acreage. Argentina on the other hand has reduced their acreage and could see a disappointing soybean crop this year.

The market is also saw position squaring ahead of the Dec. 9 Crop Production report. The December report is usually a place holder as there is not much new other than a tweaking of the demand numbers. This is to not steal the thunder from the January Final Crop Production report. Thursday's report, which came after deadline, was not expected to be earth shattering but was expected to be a market mover, as all of USDA's reports seem to have been this year.

The grains have been trading in a tight trading range since Thanksgiving and so far, there has not been any news significant enough to push the market out of its range. The lack of farmer selling is helping to add support, but selling might pick up toward the end of the year due to tax planning issues.

After numerous delays, the Environmental Protection Agency has finally released their Renewable Fuel Standard mandates. The negative news came into the market after the close on Dec. 7. As expected, the administration seems to be siding with big oil and as expected does not seem to have ag or renewable fuels interests in mind. The numbers released are not final as they will now be open of public comment through Feb. 4.

The ethanol mandates will be around 12.6 billion gallons for 2020 (September’s leaked estimate was at 12.5 billion), 13.8 billion for 2021 (September’s leaked estimate was 13.5 billion), and 15 billion gallons for 2022 (September’s leaked estimate was 14.1 billion). Though the numbers were slightly higher than the leaked estimates in September, they were still disappointing to the market.

Cattle closed out November on a sour note and have been trying to recover much of those losses this week. A strong cash trade continues to put underlying strength in live cattle. Light support is also coming from strong export demand and expectations for tight supplies of cattle in 2022. Declining virus concerns added support as it appears there should be little disruption to restaurant dining.

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