In this file:
· Jerry Gulke: New Year, New Paradigm for Grain Markets?
· Did South America Just Change the Game for Corn and Soybean Prices in 2022?
Jerry Gulke: New Year, New Paradigm for Grain Markets?
By Sara Schafer, AgWeb
January 7, 2022
2022 started off with a bang in the corn and soybean markets.
March corn prices were up 13.25¢ and new-crop December corn prices were up 11.5¢, for the week ending Jan. 7.
March soybean prices were up 68.25¢, and new-crop November soybean prices were up 49.75¢. However, March wheat prices were down 10.25¢, and
Yet, all classes of wheat were down, with Minneapolis wheat down 56.25¢ July wheat prices were down 10.25¢.
“As so often it's all about weather,” says Jerry Gulke, president of the Gulke Group. “This time it is in South America. We knew it was dry down there in the southern part of Brazil and in Argentina and too wet in the northern part. On Tuesday, that news caught fire.”
Brazil-based consultancy AgRural slashed its Brazilian soybean crop estimate by 11.3 MMT to 133.4 MMT due to heat and drought in southern Brazil. It now forecasts Brazil’s soybean yield will be the lowest since 2015-16. AgRural says Paraná has been hit hardest, with drought spreading from western areas of the state in December.
The firm also cut its production forecasts for the Rio Grande do Sul, Santa Catarina and to a lesser extent Mato Grosso do Sul. AgRural says in the rest of the country, the crop is developing well and high yields are expected in Mato Grosso, where the first areas are already being harvested...
more, including audio [11:31 min.]
Did South America Just Change the Game for Corn and Soybean Prices in 2022?
By Tyne Morgan, AgWeb
January 7, 2022
The volatility in commodity markets seems to be picking up right where prices left off to close out 2021. On Friday, both January soybeans were trading down 25 cents mid-morning. And by the time prices closed, that contract had rebounded to finish the day 24 cents higher.
The final month of 2021, weather trumped demand to provide year-end fuel in the markets. And Garrett Toay of AgTraderTalk says weather continues to drive prices this week.
“It's still weather,” says Toay. “The demand is going to come if these production cuts keep coming.”
The cuts to which Toay is referring is the most recent crop estimates coming from South America. Two estimates just this week show a 13 to 14 million metric ton cut to Brazilian soybeans, all due to weather concerns.
“We've got soybean prices that are nearing $14. And all of a sudden, we're looking at global soybean supplies, or at least the South American supply situation, that's now looking at a year-over-year decline rather than a year over year increase,” he adds.
He says if the South American crop comes in shorter than expectations, that will hep the U.S. Supply and Demand balance sheet, even as U.S. soybean exports continue to lag.
“And the focus from the Chinese, for the near term is on South America,” he adds...
more, including video [5:17 min.]