The Finish Line: Grain Markets Offer Profit Opportunities to End 2021
With just one day left in the 2021 trading year, grain prices are showing a little softness but are still at high levels.
As of Thursday, Dec. 30, March corn prices were down 10.25¢ and new-crop December corn prices were down 8¢, for the week. March soybean prices were down 2.75¢, and new-crop November soybean prices were up 1¢. March wheat prices were down 39.5¢, and July wheat prices were down 31¢.
Is the Wheat Party Over?
“Wheat is exhibiting signs that the bull market could be over due to numerous technical signals,” says Jamie Wasemiller, market analyst with Gulke Group.
From a fundamental standing, he is watching these issues:
In its latest report Stats Canada found more spring wheat than was anticipated, which can easily lead to the markets believing that is also the case just across the border into Montana and North Dakota.
Weather and expectations in other countries are improving the global situation of wheat — even if we grow less in the U.S. in 2022, mainly due to fertilizer costs.
The bottom line is at the end of 2021 we did not run out of wheat, or any other grain for that matter.
“Some will say we have had a rally since Dec. 15 and that this most recent 25¢ to 30¢ drop in prices makes sense as markets cannot continue to just go up,” Wasemiller says. “But keep in mind right before that we lost $1 since the highs near the end of November.”
Read more: Jerry Gulke: Is the Top in For Wheat?
Positive Corn Fundamentals At Play
The corn market retested some highs set back on July 1 and have fallen back about 20¢ since, Wasemiller says.
“What we would like to see is if the March contract can try to retest those highs one more time and break through,” he says. “If it tries and fails though that would not be good technically. Fundamentals appear to be more positive at the moment than wheat but when markets react negatively to positive conditions than that can be a red flag.”
Soybean Market Focuses on South America
In soybeans, Wasemiller also says prices tried to retest highs made back on July 1 and were unable to push through falling back about 30¢.
“Weather has been discussed in regard to some lost bushels in South America but keep in mind they have also started harvesting some early been in Mato Grasso, which albeit is a small amount, but it something,” he says. “Today’s export numbers showed that we are starting to lose exports to South America like we always do at this time of the year.”
For perspective, Wasemiller says prices in early 2021 did not move much higher until February, except for soybean meal.
“With prices where they are now versus the beginning of 2021, do not get complacent about downside risk,” he says. “This is a good reason why using the Board can be an effective strategy to buy some time until we get a better handle on our 2022 outlook. There are still very good opportunities out there to take advantage of.”
Check the latest market prices in AgWeb's Commodity Markets Center.
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