Glacier FarmMedia – In a week that would have ended Dec. 27 at the Chicago Board of Trade, prices saw a sharp rise as trading resumed after Christmas.
The March corn contract gained 7.25 cents a bushel on Dec. 26, while March soybeans gained 12.75 cents a bushel. The March Chicago wheat contract rose 20 cents/bu, while Kansas City March hard red wheat rose 19.75 cents/bu. and March Minneapolis spring wheat rose 15 cents/bu.
Ryan Ettner of Allendale Inc. in McHenry, Illinois, cited several reasons for the price increases. Corn saw a return to buying behavior following the reopening of two railroad crossings in Eagle Pass and El Paso, Texas, on December 22. Dry conditions in South American growing regions contributed to a rise in soybean prices, while short covering increased wheat prices.
also read
ICE weekly outlook: No reason for a strong rally in rapeseed
There were strong gains for rapeseed on the Intercontinental Exchange on December 27 as trading resumed following closures over Christmas and Boxing Day. However, the increase is unlikely to be the start of a significant increase in oilseed prices. According to MarketsFarm analyst Bruce Burnett, canola is more likely to decline once trading resumes after the New Year.
According to Ettner, these were largely the same reasons for the price movement later in the week.
“You would have said weather for beans. They would have said these railroad problems for corn. Wheat is essentially just exports,” he said.
With the U.S. Department of Agriculture's monthly global agricultural supply/demand estimates due to be released Jan. 12, Ettner added that projected carryovers would suggest March corn will fall to $4.80/ Bu will rise. Meanwhile, soybeans would cost $13/bu in March. and possibly 15 cents/bu. more or higher depending on the South American weather.
“Chicago wheat is trading in a pretty solid range between $6.10 and $6.20/bu,” he said. “I still think the price for Chicago should be between $6.10 and $6.20 unless there is a surprising increase in exports.”
Looking back at 2023, Ettner reported that unlike most years, trading tended to react to small news as if it were bigger news.
“It often happens that we exaggerate certain weather events, but not just the weather, but also problems with the Black Sea,” he said, pointing to Russia's reluctance to approve the Black Sea Grains Initiative before its final exit. “Most stories on a scale of one to ten that seemed to have an impact of two or three were traded by the market as eight or nine. We've exaggerated some stories in the middle of a general downtrend.
“Traders were looking for something they could turn into a large-scale story without ever finding a large-scale story throughout the year.”
— Adam Peleshaty Reporting for MarketsFarm from Stonewall, Man.
Comments are closed.