Limit Up


By Tori Uhland

October 24, 2022

For those of you who don’t know me, my name is Tori Uhland. After graduating from Eads High School in 2015, I went on to attend college at the University of Denver then to Colorado State University where I studied Journalism & Media Communications. In June 2019, after college, I came back to the area and started working as a grain merchandiser for Tempel Grain in Wiley. Despite growing up on a farm and helping drive combines during wheat harvest, I didn’t know anything about the marketing side of farming. I’m still learning something new every day, but I am happy to say that I’ve learned SO much in the last three and a half years and I’m hoping to share some of that knowledge with all of you. I love what I do and my goal is to help farmers make the best marketing decisions possible. I’m no expert by any means, but I hope to provide some insight that you will find both interesting and helpful to your operation.

One of the things that struck me when I started in the grain industry was how much everything going on across the country and the world affects us right here in Small Town, USA. I never really would’ve imagined that what Vladmir Putin does would have a direct impact on my day, but here we are. I get a lot of phone calls every week asking questions like, “Why was wheat up today?” or “What’s going on with corn right now?” or, my personal favorite (that’s sarcasm), “What are these markets going to do?” No one knows what the markets are going to do. We all have theories and can take a guess which direction things will go, but things happen unexpectedly all the time and there is always new information coming into the market. My goal is to provide insight, observations, and hopefully, a helpful perspective.

There’s always a lot going on in the commodity world, but it seems like things have been exaggerated lately. We are in unprecedented times with events including, but not limited to, the tail-end of a global pandemic, a war in one of the world’s top grain exporting countries, severe droughts in the United States and Europe, and a struggling economy. All of these things are impacting the market and your bottom line.

Things are constantly changing in the market and there could be a few days’ worth of new information between the time I write this and the time you read it, so it won’t be real-time information. Instead of giving you up-to-the-minute quotes, most everything will be regarding the bigger picture and longer-term trends and themes.

Corn/Milo

Corn markets are lower to start out the week on energy markets and ideas that harvest made big progress over the weekend. Strength in the U.S. Dollar (USD) is also contributing to the weakness in corn.

Weekly export sales were announced on Thursday 10/20/22 and corn was in the middle of the low expectations and only ⅓ of the volume of a year ago. The total commitments to all destinations is running behind last year by 15 MMT, but the USDA is forecasting only a 5 MMT reduction from last year; China is running behind last year by 8.5 MMT. Between U.S. logistic issues, high freight costs, and high domestic prices, Brazil corn is becoming a bigger discount to U.S., leading to the question of whether or not we will get any export business from Asia to make up for the lagging pace. Only 11.9 thousand metric tons (TMT) of milo export sales reported and China was actually a small net cancellation. We are currently trading in the upper 30% of futures prices over the last 15 years.

Wheat

The wheat market is trading lower to start out the week on possibly extending the grain corridor agreement for Ukraine grain shipments as well as strength in the USD. Worries about the crop in Argentina and Australia continue; the weather has been too dry in Argentina and too wet in Australia.

Wheat had poor weekly export sales last week of 185.1 tmt, which was below the range of estimates. The December Kansas City Hard Red Winter Wheat futures contract broke below the trendline last week but has held support. We are currently trading in the upper 10% of futures prices over the last 15 years.

The drought monitor shows 70% of U.S. winter wheat area is in a drought and 82% of the U.S. is in a drought. That is the highest since records began in 2000.

Soybeans

Soybean exports beat export expectations this week at 2.33 MMT, China was the buyer for almost 85% of that total despite their weak currency. Their currency is the weakest it has been since 2008. A weak currency means less buying power, especially when the USD is rallying. The Chinese currency hit an all-time record low against the USD on 10/20. A high USD is not helpful to U.S. export business. We are currently trading in the upper 30% of futures prices over the last 15 years.

Basis

Corn and milo basis has remained strong throughout eastern Colorado and western Kansas with no signs of harvest easing that pressure. Corn basis in the Midwest is starting to move higher for the deferred months as rail corn starts working its way farther west into the Colorado, Kansas and Texas markets.

Cattle & Hogs

Last week’s Cattle on Feed report showed 99% on feed as of October 1 which was in line with trade estimates, September placements came in at 96.2% and September marketings were in line with estimates at 104%. The Cold Storage Report will be released October 24 after the market close and is expected to show an increase in pork and beef stocks.

Other News

There are several ongoing situations that could have a huge effect on our markets. As of now, it looks like the grain corridor deal with Russia will be extended so Ukraine can keep shipping grain out of the Black Sea, but it would be potentially bullish for our markets, particularly wheat, if anything were to make Ukraine grain unavailable to the rest of the world.

The low water levels on the Mississippi River are already impacting logistics, so if this is extended, there will be a possibility of export limitations and sale cancellations, which will be a loss of demand. Transportation costs will rise, leading to lower basis levels, an impact on calendar spreads and higher costs of imported products that typically move up the river such as fertilizer. The railroad situation is also being watched very closely with a possible strike coming after the elections in November if an agreement is unable to be reached.

A few other things on the radar include drought continuation leading to another year of poor yields and cattle liquidation and economic factors such as higher interest rates to fight inflation leading to less demand, high costs of business and higher priced crop inputs as well as having a huge effect on our import and export demand. This is a critical year for risk management!

There has been a lot of talk about price inflation and I thought these were some interesting numbers to help put things into perspective. These numbers percent change in average retail price since January 2021: eggs up 98%, chicken breast up 46%, bacon up 27%, flour up 25%, sugar up 23%, ground beef up 23%, whole milk up 21%, beer up 11%.

If you have any questions, comments, or topics you’d like to discuss, please let me know! You can reach me by email at This email address is being protected from spambots. You need JavaScript enabled to view it..

Nearby grain futures prices for the week of 10/17/22

Symbol Sunday Open 10/16 High Low Friday Close 10/21 Change Sunday Open 10/23
ZCZ22 (Dec Corn) 6.89 6.9225 6.74 6.835 -.625 6.8225
KEZ22 (Dec KC HRW) 9.54 9.6925 9.29 9.4675 -.055 9.50
ZSX22 (Nov Soybeans) 13.815 13.985 13.57 13.9325 +.095 13.93

Nearby livestock futures prices for the week of 10/17/22

Symbol Monday Open 10/17 High Low Friday Close 10/21 Change Monday Open 10/24
GFX22 (Nov Feeder Cattle) 174.775 179.325 174.75 178.35 +3.575 178.825
LEZ22 (Dec Live Cattle) 148.15 152.50 148.05 152.425 +4.65 152.475
HEZ22 (Dec Lean Hogs) 82.475 89.80 81.40 89.125 +6.875 88.525

Disclaimer

There is a risk of loss in futures and options trading. Past performance is not necessarily indicative of future results. Not responsible for any trading decisions made.

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