2022 has definitely started out the year on the upside!
USDA Crop Report will be released next Wednesday, January 12th.
South American weather is the hot topic that has fueled the market for the last 2 and a half weeks.
January is critical for 2/3 of the Argentine corn production and Brazil is just starting to plan the safrinha corn crop. The Safrinah crop size will have a big impact on US Exports for July thru December of 2022. THe higher futures board during planting is definitely enticing additional corn acres at the moment. Ethanol continues to be profitable and continues to build stocks.
The question on the size of the South American bean crop is a hot topic. Argenina is struggling with drought and hotter than average temps in the next week. Central and northern Brazil seem to be cooler and the rain won't shut off. Some analysts are cutting South American production by as much as 5 mmt between Brazil and Argentina. Yet some analysts are not ruling out that a timely rain or two in Argentina would bring their crop back to life in no time. The US bean crop shrunk in the November report and is sitting at 49.5 bu/acre. The US did go from drought conditions to timely August rains that saved a good chunk of the bean crop, so it is possible for Argentina also.
Wheat seems to be following corn lately, but the futures inverse has been a burden for awhile. Russia stepped in yesterday and bought some wheat right before they go on holiday next week. Typically during the gut slot of corn harvest, the wheat basis firms dramatically. Unfortunately that was not the case this year and basis continues to slide. The spot market did finally show some stronger levels in the last week but I am guessing it is more due to cold weather, cars being tough to find and less movement overall because of the holidays.
The railroads all seem to be struggling at the moment. Anything from colder weather and not being able to build air on trains to lack of crew or personel to run the trains. RR are not performing and leaving trains sit for days without power or a crew in site to move them.
If you ever have any questions regarding the different types of contracts that JVG offers, please give us a call. We have cash, futures fixed, Minimum Price, and Basis Fixed available. Also, if you hear of different kinds of contracts that you may be interested, let us know.