Weather Forecast



Everchanging Argentina forecast affects soybean outlook


The wheat market was off to the races to start 2018, primarily in the Kansas City contract. State-by-state winter wheat ratings were released Jan. 2 showing noticeable declines from last month's final U.S. Department of Agriculture ratings. Most notable were Kansas ratings declining 14 percent to 37 percent good/excellent, Oklahoma down 15 percent to 15 percent good/excellent and Colorado down 18 percent to 48 percent good/excellent. These lower ratings and the extremely cold temperatures gripping the country caused speculation about winterkill possibilities. Temperatures are forecast to be a couple degrees below the five-year average through Jan. 6.

The Kansas City market closed above the 50-day moving averages early week and held firm. This move from the 20-day moving averages higher was a key technical development in this week's trade. It's now a full-fledged technical fight at these key moving averages to see if shorts will hold their ground or get nervous and start buying back additional contracts. The latest Commodity Futures Trading Commission data showed funds decreased their net short position in all wheat contracts by 8,000 contracts to -146,000 short as of Dec. 26, 2017. This is still a fairly sizeable net short and leaves the market susceptible to additional short covering.

Black Sea Region weather has been much warmer than normal, allowing for a longer shipping season. Interestingly though, there is concern that that the warmer temperatures have caused some of the wheat crop to come out of dormancy, and there is speculation that a cold weather snap could be damaging to that crop as winter hardiness has been diminished.

The Ukraine is receiving a 150 million Euro loan for the electrification of railway linking the Odessa to Mykolaiv with Dolynska ports. This 250 kilometers is in the heart of Ukraine's corn, wheat and sunflower belt. The 15-year guaranteed loan will allow for electrical upgrades as well as double tracking certain portions to alleviate bottlenecks.


The corn market failed to close above its 50-day moving average of $3.5475 on the March contract in Jan. 3 trade. The recent contract low was $3.46, so it is likely that the bear camp will press for that level with the looming Jan. 12 report next week. Early chatter has USDA declining the export numbers, although demand has been decent lately with these low prices. For the week ending Jan. 3, March was up 2.25 cents to $3.53 and May was up 2.25 cents to $3.6125.

The Illinois and Mississippi river basins are experiencing icy conditions, which is slowing down freight movements. This is helping improve gulf bids for both corn and soybeans. Interior U.S. bids have been mostly steady as nearby processing and shipping needs seem to be satisfied. The market appears to be focusing on delivery needs in the spring to early summer timeframe.

Dalian corn futures reached yet another contract high Jan. 3. For the year, these Chinese corn futures prices are up 20 percent. Chinese feed mills continue to buy as there appears to be a shortage of good quality corn.

A weather forecast calls for heat and dryness to persist in South Africa over the next two weeks, which could stress corn in the early pollination stage.

The Grain Crushings and Co-Products Production report was released Jan. 2. Total corn consumed for alcohol and other uses was 525 million bushels in November 2017, up 1 percent from October 2017. November usage included 92.3 percent for alcohol and 7.7 percent for other purposes. Corn for fuel alcohol was 476 million bushels, up 5 percent from November 2016. Corn for beverage alcohol was 3.45 million bushels, up 3 percent from November 2016.

Dry mill co-production of distillers dried grains with solubles was 2 million tons during November 2017, up slightly from 2016. Distillers wet grains (65 percent or more moisture) was 1.38 million tons, up 7 percent from November 2016. Wet mill corn gluten feed production was 312,000 tons during November 2017, up 1 percent from November 2016. Wet corn gluten (40-60 percent moisture) was 303,000 tons, down 7 percent from November 2016.


Soybeans started the first couple days of the year in positive territory as weather news is continually changing in South America. Argentina weather is dry for the next week before forecast rains are expected to come back in play after that. Brazil's weather remains optimal for a big crop there. Soy oil has seen a three-day boost, with support coming from higher Malaysian palm oil prices. Soy oil is back up to highs last seen a month ago. Lower palm oil production estimates due to recent flooding is supportive for the soybean complex.

The next market moving news besides South American weather could be the USDA report on Jan. 12. The USDA could lower U.S. exports again in this report which would raise the U.S. ending stocks number.

CFTC data on Dec. 26, 2017, showed the funds heavy net short for the last two weeks, moving from net short 41,000 contracts to 69,000 as Argentina received some needed rains. For the week ending Jan. 3, January 2017 soybeans were up 8 cents and March soybeans were up 7 cents.

Soybean weekly export inspections totaled 41.9 million bushels for the week ending Dec. 28. This is below 58.4 million bushels for the same week a year ago. Inspections for 2017-18 totaled 1.04 billion bushels, which is down 14 percent from the previous year and well below USDA's projected 2 percent gain in exports.

Soybeans crushed for crude oil was 5.2 million tons (173 million bushels) in November 2017, compared to 5.28 million tons (176 million bushels) in October 2017 and 5.12 million tons (171 million bushels) in November 2016.


For the first two days of the new year, January canola futures in Winnipeg were up $5.60 Canadian at $486.00 Canadian per metric ton. The Canadian dollar is at .7977. This brings the U.S. price to $17.59 per hundredweight.

• Velva, N.D., at $17.72 per hundredweight, February at $17.65.

• Enderlin, N.D., at $18.23 per hundredweight, February at $18.23.

• Hallock, Minn., at $17.63 per hundredweight, February at. $17.63.

• Fargo, N.D., at $18.30 per hundredweight, February at $18.20.


Cash feed barley bids in Minneapolis were at $2.65, while malting barley received no quote. Berthold, N.D., bid is $2.25, and bids at CHS Southwest in New Salem, N.D., were at $2.50.


Cash bids for milling quality durum are $6.25 in Berthold and at $6.25 in Dickinson, N.D.


Cash sunflower bids in Fargo were at $17.65. December bids were at $17.60. For the first two days of the new year, soybean oil was up 68 cents at $33.76 on the January contract.