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Wheat lower in short week

Wheat Wheat traded higher on the week. For the week ending Dec. 24, March Minneapolis lost 15.25 cents, March Chicago lost 20.75 cents, and March Kansas City lost 22 cents. As of 10 a.m. Dec. 26, wheat trade was between 3 cents lower and 1 cent h...

Ray Grabanski
Grabanski is president of Progressive Ag, a Fargo, N.D.-based hedge brokerage firm. Reach him at 800-450-1404.

Wheat

Wheat traded higher on the week. For the week ending Dec. 24, March Minneapolis lost 15.25 cents, March Chicago lost 20.75 cents, and March Kansas City lost 22 cents. As of 10 a.m. Dec. 26, wheat trade was between 3 cents lower and 1 cent higher.

Wheat started Dec. 22 higher before moving lower through the day to ultimately close with losses. Russia's economic concerns continue to provide some support to wheat prices as doubts remain about the availability of Russian wheat. There is little weather of note that might threaten wheat, though winterkill or dryness threats could develop as winter progresses. Dec. 22 export inspections were bearish, coming in below the amount needed to keep pace with the U.S. Department of Agriculture's projection.

Wheat traded higher Dec. 23 as Russia's economic woes continued. Export duties are now in effect, and on Dec. 23 Barron's reported that Russia's credit rating had been downgraded by Standard & Poor. Wheat exports have been slow, but continue to move with Informa announcing that Taiwan purchased 78,300 metric tons of U.S. milling wheat. U.S. wheat weather remains generally nonthreatening, with some moisture in the Southwestern Plains Dec. 23 and beneficial moisture forecast for the eastern Midwest in the near-term.

The market moved sharply lower Dec. 24 as traders liquidated ahead of the holiday. The wheat market remains near its recent five-month highs, offering an appealing selling opportunity. The U.S. dollar, remaining near its recent highs, provides additional pressure. Now that Russia has placed export duties into effect, the trade will monitor to see how much wheat is available and how many exports shift to other origins. The weather has been generally nonthreatening for U.S. wheat, but this week's forecast shows a cold snap that could strike with little snow cover in place.

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USDA estimated wheat export shipments pace for the week ending Dec. 19 at 16.2 million bushels. This brings wheat's export shipments pace to 487.3 million bushels, compared with 716 million bushels for last year at this time.

Corn

The corn market traded sideways for the week ending Dec. 24 and remained at five-month highs. The futures found support from lack of farmer selling and recent approval from China for GMO varieties. The ethanol report for the week ending Dec. 24 also showed a record production number, while ethanol traded at a premium to gas. The trade was thin the week ending Dec. 24, with Christmas and buying interest light as we trade at the high end of the recent range. The March contract was down 2.75 cents for the week ending Dec. 24.

The corn market closed slightly higher on Dec. 22 and Dec. 23, with strength in the wheat complex. Buying interest came from news that Russia might impose a temporary duty on their grain exports. Syngenta also received approval from Chinese officials for their MIR 162 variety. The crude oil market was also firm early in the week ending Dec. 24, and the Dow Jones Industrial Average reached new highs. Ethanol production has been strong this year and exports have been good, while Brazil exports are half of what they were a year ago so far this marketing year and has traders thinking there might be more opportunities for demand. The quarterly hogs and pigs report was released, and it appears expansion is in place, which should increase feed demand.

The corn market gave back the early week gains on Dec. 24, with profit-taking ahead of the Christmas holiday, and spillover pressure from the sharp losses in the wheat complex. The downside was limited with the hog and ethanol reports. The ethanol report showed corn use up from last week and production set a new record at 992,000 barrels per day, while stocks were lower. The futures will remain thinly traded with the holidays this week and the end to another year.

Ethanol production for the week ending Dec. 19 averaged 992,000 barrels per day, up 0.2 percent from the previous week. Total Ethanol production for the week ending Dec. 19 was 6.944 million barrels. Corn used in the previous week's production is estimated at 104.16 million bushels and needs to average 98.94 million bushels per week to meet this crop year's USDA estimate of 5.15 billion bushels. Stocks were 17.615 million barrels, down 0.25 percent from the previous week.

USDA's export inspections report was neutral for corn at 31.1 million bushels, below the 36.1 million bushels needed to meet USDA's projection. Corn export sales will be released Dec. 29 because of the Christmas holiday.

Soybeans

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As of the Dec. 24 close, January soybeans were 2 cents lower for the week. At 10 a.m. Dec. 26, January soybeans were trading 9.5 cents higher.

On Dec. 22, soybeans were higher in quiet trade to start the short week. The news remains similar to what we've seen the past few weeks, with another round of bullish export inspections released Dec. 22, while South America's forecast remains decent in the near-term. Southern Brazil saw some heavy rains that might have caused some flooding, but overall conditions remain good in both Brazil and Argentina. Export inspections on Dec. 22 were well above the amount needed to keep pace with the USDA's projection.

Soybeans closed near unchanged Dec. 23, with 0.25 cent gains in the January contract, no change in March, and 0.25 to 1.25 cent losses in deferred contracts. This helps illustrate the choppy, low-volume trade we saw the week ending Dec. 24. Demand remains good for soybeans, particularly for soy meal. South America's weather continues to factor in as well, with decent weather expected to continue, allowing development to continue for another potential-record crop.

Soybeans moved lower Dec. 24 in choppy trade ahead of the mid-week holiday. South America's weather forecast remains generally favorable in the near-term with the five-day forecast showing moderate to heavy rain in southern Brazil and lighter showers in northern Brazil and Argentina. Strong demand remains the balance to South America's pressure with upfront demand for meal likely to support soybean crushing into the new year.

USDA reported soybean export inspections pace for the week ending Dec. 19 at 82.1 million bushels. This brings the year-to-date export shipments pace for soybeans to 1.024 billion bushels, compared with 822.4 million bushels for last year at this time. Export sales will be released Dec. 29.

Barley

There were no export shipments reported for barley the week ending Dec. 19. Export sales will be released Dec. 29.

For the week ending Dec. 24, cash feed barley bids in Minneapolis were unchanged at $2.75, while malting bids were at $7.35.

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Durum

Durum shipments were reported at 1.26 million bushels. Export sales will be released Dec. 29.

For the week ending Dec. 24, cash bids for milling quality durum were at $12 in Berthold, N.D., while the Dickinson, N.D., bid was at $12.50.

Canola

For the week ending Dec. 24, canola futures on the Winnipeg, Manitoba, exchange closed higher with January gaining $9.20 to $451.60 (Canadian). Canola opened the week with gains, as strength in Chicago Board of Trade soybean futures and weakness in the Canadian dollar provided support. Profit-taking ahead of the long holiday weekend led to small losses Dec. 23, and many deferred contracts extended the losses Dec. 24. The January contract was higher Dec. 24, as expiration approaches. The market was closed Dec. 25 for Christmas and Dec. 26 for Boxing Day.

For the week ending Dec. 24, cash canola bids in Velva, N.D., decreased 11 cents to $17.19.

Sunflowers

Export sales will be released Dec. 29.

For the week ending Dec. 24, soybean oil futures were four cents lower to $31.93. Cash sunflower bids in Fargo were unchanged on the week at $18.75.

Related Topics: CROPSMARKETS
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