Closing Markets: Corn: -2 old & -0.75 new.
Beans: +11.50 old & +10.50 new. Wheat: -2.50.
Good evening!
Market Recap-
Ag markets saw mixed trade on Wednesday, with the feed grain and meal markets closing in the red while the beans and bean oil markets finished in the green on what appeared to be another round of rumor-based buying/short covering on more RVO optimism. With President Trump in Switzerland this week for the World Economic Forum, the price action throughout the day illustrates the fundamental importance of what happens here, even amid other non-macro related headlines seemingly taking a backseat the last couple days.
Corn Summary-
Corn futures saw quietly lower closes on Wednesday as tariff pessimism with Europe seemed to outweigh any sort of spillover buying from the soy complex. Newswires are rumoring that the EU could be proposing a $50/ton tariff on US corn imports as part of the response to Trump's Greenland threats. It’s unclear whether this will go forward following what appeared to be a dropping of threats by Trump earlier today, but the chance at increased tensions was nonetheless enough to pressure values on Wednesday. Other headline news includes E15, but we don't see anything new today that we didn't already know yesterday in terms of lawmakers trying to get litigation passed in the funding bill that must be passed by the end of the month to avoid another government shutdown.
Soybean Summary-
Beans and bean oil saw higher trade throughout the day on Wednesday, with there being a number of factors given for why the buying may have been occurring but nothing that was a sure thing. On one hand, there was another round of optimism regarding what traders are hoping is a positive ruling from the Trump administration on RVOs/SREs in another several weeks, while on the other hand, there were headlines out of both Treasury Secretary Bessent and USTR Greer that additional trade talks were likely with the Chinese in the short term ahead of a planned visit to Beijing by Trump in April. Lastly, there was chatter later in the day today that some crop scouts are beginning to trim production estimates in Argentina due to a lack of moisture in some areas, but we see current forecasts alleviating some of this risk should they verify over the next 10-15 days.
Wheat Summary-
Wheat futures traded lower in lockstep with the corn market on Wednesday, as it was another day with limited news headlines and rather small-ranging trade across the futures markets. Weather seems to be the only thing of real note, with winterkill concern popping up in different circles in the past couple days both in the US and in the Black Sea. We aren't discounting the coming round of cold weather for the US wheat belt, but winterkill hasn't really been much of an issue for the better part of the last 30 years, meaning odds are likely better than not that this is more of a spec story than a fundamental situation with actual legs.
Outside News Headlines-
Crude oil futures up $0.20+/bbl.
Weather Updates-
Main weather focus for the Midwest and broader eastern half of the US continues to be the coming winter storm system that is expected to impact the south-central part of the country this weekend, though the models are still noticeably different this afternoon. The EU model has snow further to the north than the GFS model, and also has the storm moving faster; today, totals in the heaviest band of snowfall could reach 13-18", while other areas expect to see a lesser 1-4".
Once this system works through the country and exits next week, there is then pretty good model agreement on a period of dryness emerging into the start of February, as northwest flow likely keeps the bulk of the Midwest on the cooler and drier side of normal. Extended forecasts into week 3-4 see low pressure possibly building off the West Coast which could alter the current set up, but this is too far out to have much confidence in and ridging across the western US will continue to shove cold arctic air in the eastern part of the country in the meantime.
Again not a lot new on the weather outlook for South America, as additional rains across the northern and north-central parts of Brazil cause some slight harvest delays in these areas, while regions to the south continue to see a drier outlook for another 10 days or so before rains are expected to fill back in then after the first of February. The wet areas will see temperatures that are average to maybe slightly below average, while the drier areas to the south expect to see temps that are slightly above average but still not overly concerning.
Forecasts have trended warmer the last 24 hours for Argentina but are otherwise also little changed here and continue to show better rains filling back in across the country's southern growing regions after this weekend and into the first part of next week. If there's a spot for concern its growing regions to the east of the country, as these areas likely don't see much in terms of moisture for at least the next 10 days.
Enjoy it!
Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com
