3 Big Things Today, January 20, 2022
1. Soybean Futures Higher, Grains Lower Overnight
Soybean futures were higher in overnight trading on concerns about South American weather while grains declined.
Rains fell this week in parts of Argentina including the states of Entre Rios, Buenos Aires, and northeastern La Pampa, Donald Keeney, an agricultural meteorologist with Maxar, said in a note to clients.
Rain is forecast for much of the country’s growing regions through the weekend, the forecaster said.
“Widespread rains through next week should significantly improve moisture and crop conditions,” Keeney said.
In Brazil, meanwhile, rain this week was near expectations and favored the states of Mato Grosso, Goias, Minas, Sao Paulo, and Parana, he said.
Precipitation is expected to continue through Sunday in several growing areas. While that will help with soil moisture “a bit,” dry patches will spread again in southern Brazil, Keeney said.
Wheat futures declined as some snowfall is expected in the U.S. Southern Plains, giving hard-red winter varieties that are attempting to overwinter a protective blanket.
Up to an inch of snow is forecast in parts of the Oklahoma and Texas panhandles through this morning, the National Weather Service said.
“Light snow will continue to develop across much of the panhandles through this morning,” the NWS said. “Snowfall will then dissipate over portions of central Texas.”
Soybean futures for March delivery rose 4¾¢ to $13.96 a bushel overnight on the Chicago Board of Trade. Soymeal gained 30¢ to $398.60 a short ton, and soybean oil futures added 0.19¢ to 60.95¢ a pound.
Corn futures for March delivery fell 2¢ to $6.08½ a bushel.
Wheat for March delivery lost 5¢ to $7.91½ a bushel overnight, while Kansas City futures fell 2¼¢ to $7.97¾ a bushel.**
2. Beef Production Rose in 2021, Cattle Slaughter Accelerates
Beef production in the U.S. in 2021 is forecast at 27.95 billion pounds amid increased non-fed cattle slaughter and heavier carcass weights, the USDA said in a report.
That’s up from the previous outlook for 27.4 billion pounds, the agency said.
“This increase is driven by a more rapid pace of cow and bull slaughter as well as by heavier cattle dressed weights,” the government said in its report. “Beef cow slaughter in December was up more than expected, likely reflecting the drought in the western region of the country.”
The number of cattle slaughtered in December rose 1.5% year-over-year. Cow slaughter increased 5.8% and bull processing rose by 5.3% from the same month a year earlier.
Average dressed weights rose almost 10 pounds, or about 1%, year-over-year in the week that ended on December 25, the Agricultural Marketing Service, a division of the USDA, said in its weekly slaughter report.
Dressed weights also were up by 13 pounds over the three-year average, the agency said. December dressed weights are expected to be up about 3 pounds from November, but flat from the same month in 2020.
Fed and feeder steer prices likely will rise in 2022, the report said.
The average price in December for all grades of steers sold was $139.36 per hundredweight, a whopping 28% increase from December 2020, the USDA said.
That average price in the first full week of January was up 24% year-over-year.
The government now expects 2022 first-quarter fed steer prices at $139 per hundredweight and four-quarter prices of $138 per hundredweight, both up about $1 from prior outlooks, the agency said.
Second-quarter fed-steer prices are now seen at $136 per hundredweight, while third-quarter prices are seen at $134 per hundredweight, an increase of about $2 from the previous outlook.
For the full year, the USDA now sees fed steer prices averaging $136.75 per hundredweight.
3. Extreme Cold Continues in Northern U.S.
The cold streak in the north-central U.S. continues as wind-chill warnings and advisories remain in effect, according to the National Weather Service.
In much of North Dakota and northeastern South Dakota, wind-chill warnings are in effect until noon as values are dropping close to -50°F., the NWS said in a report early this morning.
“The dangerously cold wind chills could cause frostbite on exposed skin in as little as 10 minutes,” the agency said.
In the western half of Wisconsin, meanwhile, wind chills are forecast to fall to -20°F. to -30°F.
The wind-chill advisories dip all the way into northern Missouri, where values are expected to fall as low as -20°F., the NWS said.