Marketing

Grain Outlook Corn ends 2022 on a high note

The following marketing analysis is for the week ending Dec. 30.

CORN — Happy New Year! A holiday-shortened week with limited fresh news as we headed to month, quarter, and year-end. The final trading week of the year brought good news to growers as prices rallied to seven-week highs on less rainfall in Argentina than expected. The extended forecasts show limited rain and a return of hotter temperatures. Tempering the upside was the increase in Covid cases in China; but restrictions are easing which lent support. Travelers going into China are no longer required to provide a negative Covid test to enter the country, but travelers entering the United States, India, South Korea, Spain, and other countries must provide a negative test PHYLLIS NYSTROM CHS Hedging inC. St. Paul 48 hours before traveling.

Insurers and reinsurers are not renewing war risk coverage in Ukraine, Russia, and Belarus. They usually renew on Jan. 1, so this is their first opportunity to limit coverage since the Russian/Ukrainian war began back in February. This may result in fewer shipments and/or higher costs. Reinsurers have suffered losses this year related to the war and Hurricane Ian in Florida.

A well-known private consultant lowered his Brazilian corn estimate by .5 million metric tons to 125 mmt and cut his Argentine estimate by 1 mmt to 46 mmt.

The University of Illinois did a study titled, “The Impact of Long-Run Declines in Gasoline Use on the U.S. Corn Market.” Their bottom line was the US ethanol industry faces uncertainty due to electric vehicles and declining gasoline use. Decreasing ethanol production could decrease corn prices by about 4 percent, but this assumes current corn production and other uses continue current trends. New uses could alter that outlook.

Weekly export sales were delayed until Dec. 30 due to the Monday holiday. Sales were above the highest expectation at 30.8 million bushels, but were below the same week a year ago for the fifth straight week. Total export commitments are 843 million bushels and down 47 percent from last year. We need to average 32.8 million bushels of sales per week to hit the current U.S. Department of Agriculture outlook of 2.075 billion bushels. China only has 632,000 metric

Cash Grain Markets

corn/change* soybeans/change*

Stewartville $6.24 +.01 $14.27 -.07 Edgerton $6.86 +.14 $14.67 +.03 Jackson $6.62 NA $14.59 NA Hope $6.60 +.14 $14.40 +.04 Cannon Falls $6.65 +.47 $14.46 +.12 Sleepy Eye $6.65 +.18 $14.57 +.02 St. Cloud $6.46 +.29 $14.57 +.03 Madison $6.58 +.20 $15.09 +.35 Redwood Falls $6.70 +.11 $14.68 -.06 Fergus Falls $6.41 +.15 $14.52 +.02 Morris $6.50 +.13 $14.70 -.03 Tracy $6.70 +.13 $14.72 +.09 Average: $6.58 $14.60 Year Ago Average: $5.91 $13.38

Grain prices are effective cash close on Jan. 3. *Cash grain price change represents a two-week period.

tons of unshipped purchases on the books compared with 10.1 mmt last year. Most traders will expect a cut to the export category on the Jan. 12 World Agriculture Supply and Demand Estimates report which will likely feed directly to an increase in ending stocks. There was only one fresh daily sale announcement this week with 295,000 bushels for old crop and 6.69 million bushels for 2023-24 — both going to Japan. Total exports for the 2023-24 marketing year are 44.8 million bushels vs. 59.5 million bushels last year.

Weekly ethanol production fell more than expected, down 66,000 barrels per day to 963,000 bpd. This was an 11-week low and was down 9.1 percent from the same week last year. We need to average 1.027 million bpd to hit the USDA’s 5.275 billion bushels of corn for ethanol. Weekly ethanol stocks were at a record high for the week at 24.64 million barrels and up 596,000 barrels for the week. Stocks were up 19.2 percent from the same week last year. U.S. gasoline demand was a 12-week high at 9.3 million bpd but is down 4.1 percent from the same week last year. The four-week average gasoline demand is down 6.7 percent from last year.

Argentina’s corn planting was estimated at 62.9 percent complete compared to 78 percent on average by the Buenos Aires Grain Exchange as of Dec. 29. Their corn rating for good/excellent was unchanged at 15 percent but the poor category was up 2 percent at 28 percent.

Outlook: Weather, weather, weather, plus a little export demand and macro considerations thrown in for fun. The start of a new calendar year and a long weekend can combine for a volatile restart on Jan. 3, it’s a game of wait and see. In the last five years, there is a tendency for March corn to rally in January. Pencils will begin to be put to paper for how much corn ending stocks may increase on the Jan. 12 report, which may limit where we go from here.

For the week, March corn rallied 12.25 cents to $6.78.5, July was 13.75 cents higher at $6.71.75, and December 2023 was 9 cents higher at $6.10.75 per bushel.

The Chicago Mercantile Exchange reopened for post-New Year’s trading on Jan. 3 at 8:30 a.m. The January WASDE and Grain Stocks reports will be released on Jan. 12.

SOYBEANS — Argentina continues to struggle with hot, dry conditions which provided underlying support, but concerns over rising Covid cases in China may limit the upside momentum. This didn’t stop March soybeans from soaring to fresh six-month highs and filling the overhead gap left in June! Soybeans closed higher for five straight sessions. March soy meal set a new contract high on Argentina’s weather as they are the world’s largest exporter of meal. Soyoil felt pressure to end the week on heavy deliveries against the January contract. Brazil’s weather is mostly favorable with the only real area of concern being dryness in the far southern portions of the country.

A respected private consultant cut Argentina’s soybean estimate by 2 mmt to 43 mmt with planting 60 percent complete vs. 79 percent on average. His Brazilian estimate was unchanged at 151 mmt. The BAGE commented that up to 500,000 hectares of Argentine soybean acreage may not get planted if rains don’t improve. Bean planting was estimated at 72.2 percent complete vs. 88 percent on average. The BAGE’s Argentine soybean production outlook was unchanged at 48 mmt vs. the USDA’s 49.5 mmt projection. Their soybean rating dropped 2 percent to just 10 percent rated good/excellent with the poor rating increasing 3 percent to 28 percent. Last year, their beans were rated 57 percent good/excellent and 8 percent poor. Argentina’s special soybean exchange rate has ended. It’s estimated Argentina’s farmers have sold 80 percent of last year›s soybean crop.

Weekly export sales were neutral with 25.9 million bushels sold, bringing total export commitments to 1.584 billion bushels. This is up 4 percent from last year. We need to average 13.4 million bushels of sales per week to reach the USDA’s 2.045 billion bushel outlook. China has so far purchased 25.7 mmt of U.S. soybeans for 2022-23 vs. 23.4 mmt bought last year by now.

Russian President Putin banned the sale of Russian oil and oil products to countries imposing a price cap on the oil. The EU and UK have banned the import of seaborne Russian crude oil and the Group of Seven effectively put a ceiling on Russian crude oil by barring Western companies from insuring, financing, or shipping Russian crude oil above $60 per barrel.

Indonesia will push back the start of the increase in mandatory palm oil biodiesel blending from 30 to 35 percent to February. The 30 percent blending level has been in place since 2020.

See NYSTROM, pg. 23

WILDLIFE, from pg. 19

applied with the fertilizer. Although those cover crops, which are usually knee to waist high, grew only about three inches this past season, Dwire did see a herd of deer grazing them in November.

“Every acre of those food plots gets covered with a cover crop, and every acre has a cover crop that will green up early in the spring,” Dwire said. “After harvest, the deer eat all of the grain off the ground. Without doing tillage, all of that biomass from the previous crop is there for them to eat all winter. The big difference is it greens up right away in March and April. You have an early feed source.”

The cover crops are a favorite of hunters, too, he said. That’s where you find the pheasants. They’re also popular with dove hunters.

The Elmer Weltz WMA is by Goose Lake. Cover crops prevent chemical and fertilizer runoff into the lake, and have an added benefit.

“We let the cereal rye grow tall before we plant into it, and that provides a lot of nesting habitat [for ducks and pheasants], which is one of the goals for that WMA, too,” Dwire said. “It’s not just a food source, but is also providing some habitat for the early season.”

In fact, he lets all of the cover crops grow up in the

Farmers also supply beef to schools

FARMERS MARKET, from pg. 20

siders what the schools have in labor, equipment and food budget to do well.”

Since that first year, the schools have worked with the farmers to also provide the districts with winter storage vegetables as well as locally-produced beef for hamburgers and other ground beef recipes.

“We learned how to handle more foods in their whole form and how to embrace the seasonal nature of our place,” Haag said. “Adapting to a farm-toschool model does require systems to change and the staff has truly worked hard and been willing to adapt and innovate.”

Haag says they have used the Minnesota Department of Agriculture grants to purchase equipment to more efficiently process whole foods. The grants also subsidize the purchase of some of the locally-grown food.

She says that the program continues to evolve.

“We’re working with the farmers to scale up certain crops while also introducing new ones,” she said.

You can learn more about Minnesota’s farm-toschool grants at by contacting Emily Mehr of the MDA at (651) 201-6456. You can see the Wabasha farmers’ market on-line ordering platform by searching for the Wabasha Open Food Network. v

More farms joining school district

RUZNAK, from pg. 21

The relationship between the school, a small town meat processor, and area farmers has allowed Campbell to put locally grown and processed hot dogs and hamburgers on the school menu.

“We can serve 500 hot dogs and 500 hamburgers at one meal,” he said.

One of the farmers Campbell reached out to was Rachelle Meyer of Wholesome Family Farms near Caledonia in neighboring Houston County.

“He heard we were interested in a farm-to-school program and might have an animal available,” said Meyer, who sells raw milk to customers from the family’s on-

farm store. “Our animals are 100 percent grass fed.” The Meyer family is now working with Campbell and Dover Processing to schedule a date to have a cull cow from their herd butchered and converted into ground beef and hot dogs. Meyer, whose family also has a large flock of Spanish goats available for brush control jobs, says she’s pleased with relationship their farm is building with Campbell and the St. Charles school district. The website for the sources in this article are Wholesome Family Farm at www.wholesomefamilyfarms.com; Rae Rusnak at lrpoultryproduce.com; and Good Acre at thegoodacre.org. v Soybeans closed higher five straight days

NYSTROM, from pg. 22

Outlook: The weather and optimism about possible Chinese demand improving sent March soybeans to a five-day string of higher closes. It has closed over $15 just three times since June 22 and all were this week. March and November soybeans soared to their highest since mid-June and March soy meal made a new contract high. The next upside target for March soybeans may be the contract high at $15.72.25 per bushel. In the last five years, there has been a slight tendency for March soybeans to rise in the first half of January.

For the week, March soybeans soared 39.5 cents to $15.24, July jumped 40.25 cents higher to $15.33.25, and November 2023 gained 23.25 cents to $14.16.75 per bushel. v spring, then terminates them just before or after drilling in the corn and beans.

Every WMA is different, with its own goals. What is planted and what is harvested is worked out between the farmer and the DNR. Usually the small grain and beans are harvested, and at least part of the corn, since the cover crops provide the forage.

After the drought, will there be food this winter?

“There’s still stuff out there,” Dwire said. “It’s just shorter.” And the early spring forage should be there.

The farmer is responsible for the inputs, planting and harvesting, so is the return worth it? Dwire thinks so.

“The food plots are not generally the most productive pieces,” he said. “That’s the reason they are WMAs. And the wildlife eat a large portion through the year. When we combine the corn, there’s nothing in the outside 12 rows. The wildlife take their toll on it. But it’s worthwhile. It works out good for us and it works out good for the DNR. I like working with them. They’ve been really good to work with.”

Kruger said the DNR currently has farmers to work the existing food plots. However, if a farmer drops out or the DNR adds food plots, “then we look for farmers already Minnesota Ag Water Qualitycertified or are willing to follow the MAWQC requirements as well as our DNR requirements, such as no-till or minimum tillage, no fall fertilizer applications or fall tillage, no neonic pesticides or use of neonicotinoid treated seed, limited chemical use, and willing to do diverse crop rotations and cover crops.”

While these practices improve water quality and benefit wildlife, WMA food plots constitute a very small portion of the land.

“Our hope is that the farmers doing our food plots see the benefits of the conservation practices on the WMA and decide to incorporate those practices on their own land,” Krueger said. “The more these conservation practices are implemented on private lands, the bigger the impact for water quality improvements and the wildlife benefits that go along with it.”

Anyone interested in pursuing Minnesota Agricultural Water Quality Certification can find the Certification Specialist in your area at https://www. mda.state.mn.us/environment-sustainability/certifyyour-farm. v

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