Many uncertainties lingering in grain marketing. Influences outside of the grain market such as national tensions, tariffs, oil, interest rates, and so on. Some of these items have been seen within the flat to choppy grain trade this week.
Statistics show buying/selling is driven by emotions by 70%. That is a need for a marketing plan to be made and carried out. A grain marketing plan includes specific, written goals for price targets, understanding production costs, cash flow needs, and risk tolerance. Incremental selling and marketing tool diversification can be a useful way to mitigate risk for the producer of commodities. The adage says, “ doing nothing is doing something”. This idea is to get on base rather than swinging for the homerun that may not come. Today, high production costs, unstable markets, and low crop prices driven by uncertain export markets and overproduction have converged to create an economic climate in which farmers' livelihoods are threatened.
Below normal rainfall continues to plague Argentine crops. Crop ratings are in decline, but they’re still well above the five-year average for late January. Recent rains provided some relief, with more expected in the 6- to 10-day period. But those rains are expected to miss the eastern third of the crop belt. That could increase U.S. corn and soybean meal exports later this year
History provides perspective to take some of the emotion out of pricing decisions. Charts show the months when December corn made its contract high in the 2000's with the greatest frequency occurred in May and June, while it has never occurred in the 2000's in March and October. November soybeans tend to offer their highest pricing opportunities with the most common month in the 2000s for the November contract to post a high was June, followed by October. It has never posted its high in February during the 2000s.
Corn and soybean prices are struggling to sustain recent gains amid increased harvest activity in Brazil. Production risks are rising in Argentina, but Brazil's crop potential looks robust at this point. Exporters sold 64.9 million bushels of US corn in the week ending January 22, according to the weekly USDA report, along with 30.1 million bushels of soybeans. This brings marketing year to date corn export sales to a record high for the date 2.271 billion bushels, up 567 million bushels from the previous year's pace. The total exceeds the seasonal pace needed to hit USDA's target by 352 million bushels. Marketing year to date soybean export sales total 1.244 billion bushels, down 320 million bushels from the previous year's pace. Yet, the total now falls short of the seasonal pace needed to hit USDA's lower target for the year by just 13 million bushels. The USDA is now only looking for just a 307 mbu YoY bean export decline for ‘25/26.
Rain has expanded across much of Brazil and Paraguay, with regular rounds expected through the next two weeks to support crop development, especially in central and eastern areas where recent drying had increased concerns. While there is a lot of talk about the increased demand coming from E15-year-round availability, the fact is the demand increase the first year is estimated at 300 to 700 million gallons. That is an increase of 100-250 million bushels. With the carryover at 2.2 billion bu, the impact on prices will be minimal for this year. The technical resistance window from $4.32 up to$4.35 is very strong as seen again today and that may keep a lid on the market. Support is from $4.21down to $4.17. Soybeans have fully tested the major resistance window running from $10.76 up to $10.84. The trend flags are holding to a bullish bias. Technical support is from $10.58 down to$10.53.
John R. Anderson Vice President of Grain Farmers Union Cooperative 563-380-2311
