1/28/2022

Trade had spent the two previous weeks buying the rumor and today they bought the fact.  The rumored soybean sales were finally confirmed by the USDA this morning with some sizable volumes.  For the 2021/2022 marketing year: 141,514 tonnes of soybeans for delivery to Mexico and 251,500 tonnes of soybeans for delivery to unknown.  For the 2022/2023 marketing year: 264,000 tonnes of soybeans to China.  The old crop sales are the sales that catch my interest the most, they're a good signal that there was some actual crop loss in South America.  After two weeks of broad liquidation in outside market places, investor money appeared to come flooding in today with corn, wheat, oats, and the soy complex finishing the week on a sharply higher note.  Our ending stocks for grains are not tight and looking at the new crop months for 2023 and 2024, we typically don't see moves that strong that far away from our front month.  Money is here to buy as a hedge against inflation, making any historical data comparing ending stocks and prices almost useless.  We're still waiting on a story to develop for corn.  A couple months ago, all the corn bulls could talk about was ethanol.  Now ethanol stocks are at all-time highs (excluding Covid) and implied usage is at 5-year lows.  The rail market is finally showing some signs of life but we need more.  Looks like a beautiful weekend is ahead of us.  Make sure to get out and enjoy it!

March corn took out the next chart high at 633’0 without much of a fight, putting the contract high of 640’4 clearly in its sights.  A move to the 660’-670’0 area possible if we can close above the current contract high.
Soybeans flirted with a major level at 1480’0 but did not put up much of a challenge.  A move to the 1514’0-1520’0 area possible if we can push through this resistance.