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Farm Futures afternoon market report

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Grain prices eroded into the red following a broad set of technical selling on Friday as traders continue to worry over large global stocks and more supportive South American weather patterns.  Corn and soybean prices were both down more than 1% in the ensuing round of technical selling. Wheat losses were variable, mostly ranging between 0.75% and 1.75%.

Plenty of additional rain is in store for the Mid-South, Ohio River Valley and eastern Corn Belt between Saturday and Tuesday, which could see another 0.75” or more during this time, per the latest 72-hour cumulative precipitation map from NOAA. Areas farther west and north could remain completely dry over the next several days, in contrast. Later on, NOAA’s new 8-to-14-day outlook predicts seasonally wet conditions for much of the Midwest and Plains between February 2 and February 8, with warmer-than-normal temperatures also likely for the central U.S.

On Wall St., the Dow tested modest gains of 21 points in afternoon trading to reach 38,070 and is on pace for a weekly gain of around 0.6% following some better-than-expected GDP data earlier this week. Energy futures continued to push higher, with crude oil up more than 0.75% to $78 per barrel. Diesel and gasoline each moved around 1.5% higher. The U.S. Dollar softened slightly.

On Thursday, commodity funds were net buyers of CBOT wheat (+500) contracts but were net sellers of corn (-1,500), soybeans (-7,000), soymeal (-2,000) and soyoil (-1,000).

Corn

Corn prices suffered a moderate setback following a round of technical selling on Friday. March futures dropped 5.25 cents to $4.4650, with May futures down 5.5 cents to $4.5575.

Corn basis bids trended 5 cents higher at an Ohio elevator while holding steady elsewhere across the central U.S. on Friday.

“Looking forward, even with a slight reduction in planted acres in 2024, 2 billion bushels for corn carryout will likely linger throughout the remainder of 2024, barring a dramatic weather issue this summer in the United States,” notes Naomi Blohm, senior market adviser with Stewart Peterson. Blohm explains how this reality means capturing rallies will be extra critical this year in yesterday’s Ag Marketing IQ blog – click here to learn more.

Argentina’s Buenos Aires Grains Exchange slightly raised its estimates for the country’s 2023/24 corn production by 3% to 2.224 billion bushels, citing improved soil moisture. The group also slightly raised its estimates for corn plantings with a new estimate of 17.8 million acres.

An interesting historical note – in the winter of 1877-78, strong El Niño conditions led to temperatures averaging 10 to 14 degrees F above normal, and spring plantings began as early as late February in Minnesota! Mark Seeley, an Extension professor emeritus at the University of Minnesota, recalls an attempt to duplicate those unusual patterns with a small-grain trial plot back in 1981. “Unlike in 1878, it did not work out so well, as temperatures as low as 11 degrees were measured in March, and there were repeated frosts throughout the spring of 1981, along with a number of high-wind events that caused lodging of the crops,” he remembers. Click here to learn more about that very unusual winter.

Preliminary volume estimates were for 227,683 contracts, moving 23% below Thursday’s final count of 296,867.

Soybeans

Soybean prices incurred double-digit losses after a round of technical selling that was largely spurred by South American weather forecasts that could boost yield potential for two of our largest overseas competitors (Argentina and Brazil). March and May futures each stumbled 14.25 cents lower to close at $12.0875 and $12.16, respectively.

The rest of the soy complex was mixed. March soymeal futures eroded more than 2.5% lower, while March soyoil futures firmed 0.75% higher.

Soybean basis bids shifted 8 cents higher at an Ohio elevator and 10 cents higher at an Indiana processor while holding steady elsewhere across the central U.S. on Friday.

Private exporters announced to USDA the sale of 100,000 metric tons of soymeal for delivery to unknown destinations during the 2023/24 marketing year, which began October 1.

Argentina’s Buenos Aires Grains Exchange boosted its 2023/24 soybean production estimates by 1% from a prior forecast to reach 1.929 billion bushels, noting improved soil moisture. In a separate note yesterday, Argentina’s Rosario grains exchange said that recent rains have helped “turn the page” on three prior consecutive years of severe drought. Argentina is a significant exporter of several commodities, including soybeans and soymeal.

China’s agriculture ministry reported that its pig herd was down 4.1% year-over-year through the end of December, with 434.22 million heads, and the country’s sow heard was down 5.7% with 41.42 million heads. China’s massive pork industry is a major reason it is by far the world’s No. 1 soybean importer.

Preliminary volume estimates were for 209,344 contracts, sliding moderately below Thursday’s final count of 257,040.

Wheat

Wheat prices followed other grains lower on a round of technical selling on Friday. March Chicago SRW futures lost 10.75 cents to $6.0150, March Kansas City HRW futures stumbled 10 cents lower to $6.27, and March MGEX spring wheat futures dropped 5 cents to $7.04.

Turkey issued an international tender to sell and export around 5.5 million bushels of durum wheat. Offers can be submitted through February 2, and the grain would be for shipment between February 19 and March 15. Turkey is offering the grain after harvesting a bumper crop this past season.

The Philippines issued two tenders to purchase up to 3.5 million bushels of animal feed wheat from optional origins that close on January 29. The grain is for shipment in April and May.

And finally, if you haven’t visited FarmFutures.com in a while, our Friday feature “7 ag stories you can’t miss” is one great way to quickly catch up on the industry’s top headlines. Today’s content includes a recap of our exclusive grower survey, a new governmental report regarding foreign investment in U.S. farmland and more. Click here to get started.

Preliminary volume estimates were for 111,156 CBOT contracts, tracking slightly above Thursday’s final count of 100,027.

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