Weekly Market Update 12/23/2021

Here is your weekly market update from the Garden City Co-op Grain Origination Team.

Trivia

1. What is the highest grossing Christmas movie of all time? 

2. What year(s) did Garden City, Kansas have the warmest Christmas on record?

Answers at the bottom.

Market News

• A very Merry Christmas from Garden City Cooperative! We will close at noon on Christmas Eve and we will be closed Christmas Day. 

• 100,000 MORE Russian troops have massed at the Ukraine border in the past 24 hours. It is likely that if Russia were to invade Ukraine it would be more toward the beginning of the year, but the new mass of troops keeps things spicy. Wheat won't see much downside until tensions start to subside. 

• With inflation and Russia-Ukraine tensions, new crop wheat seems to be the focus. We are seeing 10-year highs as summer of 2014 prices take a backseat to the levels being traded today, outside of wheat's "normal seasonality". 

Weather

Dry and warmer-than-normal weather continues into the new year. Sunday looks to hold another round of winds with gusts that could top out at 65 mph. This is not expected to be as severe as the December 15th storms, but with weakend roofs, trees, and power poles the winds could offer continued damage. Sunday's event could also produce areas of blowing dust. Extreme fire danger is suspected with exceptionally dry vegetation.

Corn

The corn market seems content to coast into the holiday weekend after grinding higher all week. South American weather concerns have been in the driver’s seat, with southern South America, particularly areas in central and southern Brazil, seeing drought-like conditions. The extended forecast is dry for the region. This is paired with unseasonably warm temperatures across the U.S. corn belt forecasted for the rest of the year. Other than weather, the news front for corn has been relatively quiet. Friday’s CFTC report had managed money adding 13,479 contracts to their net long, which is currently at 345,980 contracts. Export inspections were in the middle of the range of expectations at 39.4 million bushels shipped. Export sales rang in at 38.7 million bushels of old crop and 5.2 million bushels of new crop. Basis has been flat locally. Headed into the new year is a great time to be thinking about what price triggers could make sense for new crop – the grain team is here to help you start thinking about a plan for your operation.

Wheat

Wheat has been in the holiday spirit all week and is looking to close things out on a high note. There will be no grain markets tomorrow on Christmas Eve. Being the week before Christmas news has been light to say the very least, but one-story line that has caught some wind in it sails and will need to be watched is the Russia/Ukraine situation. If Russia decides to invade wheat could see a considerable spike. Russia and Ukraine are each top 5 exporters of wheat in the world. Export inspections left a lot to be desired this week coming in at 7.8 million bushels inspected to ship. This was just above the lowest trade estimate. HRW was the leader in the clubhouse at 3.7 million bushels inspected. Export sales reported 15.6 million bushels sold which was within trade guesses, HRS was the leader at 5.3 million bushels sold. The CFTC report from Friday showed KC Wheat as sellers of 2,411 contracts bringing the current long down to 57,164 contracts.

Soybeans

Soybeans have been spreading the holiday cheer around the grain complex this week and leading the pack. Light volume overall on the week, but soybeans have pushed new highs for the move this week with values trading to their highest levels since August. Bulls have been pushing the weather in South America becoming dry and for now they will run with it, but even with a reduction in the South American crop a record crop for soybeans is still on the way. Export inspections for soybeans this week pegged them at 61.7 million bushels inspected to ship, towards the lower end of trade estimates. Export sales were weak this week showing 29.8 million bushels sold, near the bottom of trade estimates as well. Top 3 destination were China, Mexico, and Indonesia. No new crop soybeans sold. CFTC reported beans adding to the long by 3,093 contracts, raising the current long to 40,975 contracts. Soybeans are looking to finish in the green going into the holiday weekend.

Milo 

Like always, milo cash prices are along for the corn futures ride as basis is steady. Export inspections were the highest of the last three months at 12.5 million bushels, with China the primary destination. Export sales were also solid at 16.6 million bushels, up from the previous week at 13.1 million.
 

Trivia Answers

1. The Grinch at $511,595,957.

2. The warmest Christmas on record according to the National weather service out of Dodge City was in both 1950 and 1971 at 74 degrees.