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THE LAND — FEBRUARY 5/FEBRUARY 12, 2021
MARKETING
Grain Outlook Corn vaults to new contract highs
Livestock Angles Feed costs keep livestock market in ‘wait and see’ mode
The following marketing Manufacturers Association markets remain firm and finAs we ended the month of analysis is for the week endhas invited the Renewable January, the livestock marished cattle prices weaken, ing Jan. 29. Fuels Association and kets were mostly in the prolook for the feeder market to National Corn Growers also suffer price deterioracess of reversing direction CORN — Rationing? What Association — as well as oth- from higher to lower. Both the tion in the coming weeks. The rationing? Corn vaulted to ers — to a meeting to discuss live cattle futures and the hog cattle complex is definitely at new contract highs this week the issue. General Motors futures experienced weekly a crossroads at the present to fresh seven-and-a-halfannounced this week they time and the next several reversals, while the feeder year highs and erasing last plan to be carbon neutral in cattle futures were lower for weeks will determine the week’s huge correction lower. direction going into the JOE TEALE Corn demand has not been PHYLLIS NYSTROM their products and operations the day on Jan. 29; but well by 2040. They plan to decar- off the highs for the week. This spring. CHS Hedging Inc. Broker rationed as indicated by big bonize and transition to batS t . P aul leaves the suspicion that the Great Plains Commodity daily and weekly export sales. The hog market appears to tery electric vehicles or other livestock markets could be Afton, Minn. In the span of four trading be in a similar situation as zero-emission vehicle technol- looking at the possibility over days we sold 230.2 million the cattle market. The futures ogy. This includes a plan for 40 percent lower markets in the weeks ahead. bushels of old crop corn to China, 4.8 market in hogs experienced a reversal million bushels of new crop corn to of U.S. models offered will be battery There has been a significant change down on the last week of January. The China, and another 12.4 million old electric by the end of 2025. the boxed beef trade in the past couple pork product has declined in volume, crop bushels to unknown. Argentina received beneficial rain in of weeks which suggests lower prices like the beef, over the past several recent weeks, but the Buenos Aires paid for live inventory of cattle may be weeks. This surge in buying included the Grain Exchange lowered their weekly nearing a top. The volume in the choice second and seventh-largest corn sales The good news has been the export to anyone on record. The largest one- crop ratings. Corn in the good/excellent and select grades of the boxes has market which has propped up the cash day sale on record was 146.5 million category fell 6 percent last week to 22 dropped off as the price of each catego- price paid for live inventory during the bushels to Russia in January 1991. It’s percent — although they left their pro- ry has gone up. This could indicate past couple of months. estimated China may have now pur- duction estimate unchanged at 47 mmt. demand might be slowing because of The decline in the cold storage of chased 17.7 million metric tons or In Brazil, there may be a point when the higher prices. pork has dropped significantly this nearly 697 million bushels of U.S. corn the benefit of rain on production will be The export market has been pretty past few months which has also bolfor this marketing year, and that outweighed by soybean harvest and good which has assisted in the recent stered prices. The caveat would be as doesn’t include any bushels eventually safrinha corn planting delays. Add to strength in the cattle market. However, prices rise, demand tends to weaken. moving from unknown to China. The this the trucker strike which was as prices have risen, the question Considering the price rise we have seen U.S. Department of Agriculture’s latest scheduled to begin Feb. 1. Depending becomes will that sector also slow down lately, the market could be vulnerable corn import figure for China is 17.5 on how long the strike lasts, harvest as well? to some corrective action. mmt, the USDA China attaché projects logistics may be severely hampered The feeder market also appears to be The next few weeks will likely give a 22 mmt of imports, but many private since the majority of soybeans move to questionable as grain prices continue perspective of which way hog prices estimates range from 22-30 mmt with to remain strong. However, if the grain will go into the spring months. v 18-20 mmt (708-788 million bushels) See NYSTROM, pg. 7 coming from the United States. Adding support to the market was a statement from the largest U.S. ethanol producer saying China had already corn/change* soybeans/change* purchased 200 million gallons of U.S. Stewartville $5.03 +.32 $12.87 -.28 ethanol for the first half of 2021. The Edgerton $5.03 +.14 $13.02 -.31 most ethanol China has ever purchased Jackson $5.07 +.19 $12.87 -.26 in a year was 198.2 million gallons in Janesville $5.05 +.16 $12.89 -.17 2016. Cannon Falls $4.96 +.17 $12.85 -.30 With the inauguration of a new Sleepy Eye $5.07 +.19 $12.99 -.31 administration, there has been a flurry of new executive orders. The govern Average: $5.04 $12.92 ment is making a push toward electric Year Ago Average: $3.62 $8.15 vehicles. What does this mean for the 5 billion bushels of corn we use for ethaGrain prices are effective cash close on Feb. 2. nol production? Reportedly, the *Cash grain price change represents a two-week period. American Fuel and Petrochemical
Cash Grain Markets
For marketing news between issues ... visit www.TheLand Online.com
Information in the above columns is the writer’s opinion. It is no way guaranteed and should not be interpreted as buy/sell advice. Futures trading always involves a certain degree of risk.
