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Market Commentary for 3/11/22
For the week:
- July corn finished 7 cents higher than last week
- December corn finished the week 26 cents higher
- November beans finished 41 cents higher than the previous week
- Wheat was down $1.00 from its close last Friday
Fear drove the wheat market to a record high of $13.63 on Tuesday before it dropped over $2.50 per bushel the next few days. July wheat now seems to be trading a wide range between $10 and $11.
South American bean production estimates continue to decline, which supports new crop bean values moving forward.
July corn looks to continue trading between $7.00 and $7.50, while new crop December futures should trade between $6.25 to $6.75 until the market becomes more confident of world supply and demand potential. The corn market’s major concerns are if Ukrainian farmers will get a corn crop planted in the next couple of months and if their old crop still in storage will be exported this summer. Late last week the Ukrainian government stressed the importance of getting the new crop planted this year. However, logistically planting a crop while fighting a war is extremely difficult.
This week’s USDA report showed corn export and ethanol demand increases with many in the trade expecting those estimates to continue increasing in future reports. Add to that the increased risk of La Nina conditions lasting into the summer months, which increases the chance of dryer conditions in the western corn belt, and we come away with some very bullish scenarios for this market down the road.
However, it’s important to consider that these high prices are leading to US and global feed demand destruction. Plus, there has been a spread of bird flu throughout the US over the last few weeks that the market has largely dismissed so far. There have been rumblings in the fuel verses food debate lately too, and if any changes to the current mandates were to occur it could significantly alter the demand picture.
A bumpy ride likely continues for these markets.
Want to read more by Jon Scheve? Check out recent articles:
The Market Is In A State Of Fear And With That Comes Volatile Prices
What Fundamentally Changed To Grains In The Past Week?
Will Corn Test $7 Or Will It Return Back to $6?
Will South American Yields Be As Bad As Predicted?
Setting Bean Basis At The Highest Level Of the Year
How A Range-Bound Market Left Me With A Sale Above The Current Market Value
Will Beans Find Their Way To $14 Or Will They Trade Back Under $13 Again?
Jon Scheve
Superior Feed Ingredients, LLC
