Glacier FarmMedia – On what would have been a bearish week on the Chicago Board of Trade ending Dec. 27, prices received a sharp boost as trading resumed after Christmas.
The March corn contract gained 7.25 United States cents per bushel on Dec. 26, while March soybeans rose 12.75 cents/bu. The March Chicago wheat contract surged 20 cents/bu., while March Kansas City hard red wheat advanced 19.75 cents/bu. and March Minneapolis spring wheat added 15 cents/bu.
Ryan Ettner of Allendale Inc. in McHenry, Ill. outlined multiple reasons for the price increases. For corn, there was a return to buying in the market after the re-opening of two rail crossings in Eagle Pass and El Paso, Tex. on Dec. 22. Dryness in South American growing areas helped lift soybean prices, while short covering raised wheat prices.
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For the most part, those were the same reasons for the price movement during the rest of the week, according to Ettner.
“You would’ve said weather for beans. You would’ve said those rail issues for corn. For wheat, pretty much just exports,” he said.
Going into the U.S. Department of Agriculture’s monthly World Agricultural Supply/Demand Estimates, to be released on Jan. 12, Ettner added that projected carryouts would suggest that March corn will move to US$4.80/bu. Meanwhile, March soybeans would be $13/bu. and possibly 15 cents/bu. more or higher depending on South American weather.
“Chicago wheat has been trading in a pretty solid range between US$6.10 and $6.20/bu.,” he said. “I still think that the range, unless exports put in a surprising number…then the price for Chicago should be US$6.10 to $6.20.”
Looking back at the year 2023, Ettner recounted that unlike most years, the trade tended to act on small news stories as if they were larger news stories.
“It’s common that we overtrade certain weather events, but not just weather, but also Black Sea issues,” he said, referring to Russia’s reluctance to approve the Black Sea Grain Initiative before its eventual exit. “Most of the stories on a scale of one to 10 that seemed to be a two or a three in influence, the market traded them as eights or nines. We overtraded quite a few stories in the middle of an overall grind lower.
“Traders were looking for something to turn into a large-scale story without ever actually finding a large-scale story all year long.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
