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Limit Up

By Tori Uhland

November 23, 2022

The markets saw wide swings and a lot of back and forth trade as headlines from the Black Sea dominated the market direction. On Tuesday, news came out that two missiles from a Russian attack on Ukraine fell in Poland and killed two people, which instantly drove the markets up. Since Poland is a part of the North Atlantic Treaty Organization (NATO), the worry was that the missile strike could be the gateway to NATO’s involvement against Russia in defense of its membership as that responsibility comes along with the alliance. Details started to come out about the accidental nature of the event and the rally stopped with reports from the Pentagon that they could not confirm that it was a Russian attack. Markets then fell when the Polish president announced that it was a Ukrainian air defense missile and there was no evidence to suggest it was an intentional attack by Russia.

Grain markets are lower to start the week with a stronger U.S. Dollar (increased 900+ points) and the Ukraine export deal is expected to hold up. First Notice Day for December futures is on November 30th, so it is recommended that December contracts are priced or rolled by November 29th at the latest.


More rains have continued to help Mississippi River levels rise and river logistics improve, but so far has not been enough to bring levels up to the low threshold in Memphis, TN. November 16 was the first time in 45 days that there was not a river closure.

Ethanol production is running 4% below last year. China’s October corn imports were down 58% from last year at 550,000 MT. The corn sales to China have been 50% of its potential and would take six weeks of awesome export sales to put China back on track with the export program that was projected by the USDA.

This year, U.S. producers were able to get relatively high returns despite a marginally clipped corn yield as some of the increasing input costs are running behind the market rallies. Inputs like seed, rent and machinery tend to rise in a one-year delay. Rent costs are particularly reactive to the prior year’s commodity rallies. Approximately 40% of the corn and soybean ground in the Midwest is rented, and the U.S. is expected to post an all-time rent record as a result of high commodity prices. This will increase the cost to produce a bushel of corn, so the market will need to factor that into futures prices to ensure that producers are compensated if the market wants to buy extra acres for next year in order to help rebuild stocks.

The U.S. is getting closer to facing a national freight rail strike in two weeks. On Monday afternoon, the largest rail union in the country rejected a tentative labor deal. All 12 rail unions have completed their ratification process; members of eight unions voted in favor of deals and four against it. The earliest a strike can occur is December 9th. There is no substitute for rail capacity. A strike could cause significant damage to the already struggling U.S. economy, costing as much as $2 billion per day, and major disruptions to the supply chain. The Biden Administration says that the unions and the railroad need to work something out to avoid this, but no new negotiations have been proposed.

Crop progress reports Monday afternoon came in at 96% harvested for U.S. corn, up 3% from last week, 94% this time last year and 90% average. Milo came in at 97% harvested, up from 93% last week, 93% last year and 91% average.

December corn has support at $6.62-6.60 and resistance at $6.67-6.70.

Local corn basis feels weaker with many users having their needs booked through March.


Wheat markets were swayed by the Russian missile headlines but relaxed after the trade learned that NATO would not be drawn into the conflict. On Thursday, it was announced that Russia had agreed to a 120 day renewal on an unmodified grain deal with Ukraine, which collapsed the wheat and corn markets.

On Friday, news came out that Baltic milling wheat traded into the East Coast, indicating that our prices are too high if we can import wheat cheaper than we can buy domestic wheat. Wheat exports could take another hit if a compromise isn’t struck between the Unions and the Biden Administration. 55% of all U.S. wheat moves by rail whether it is for domestic or export usage.

Winter wheat conditions this week came in at 32% which was unchanged from last week. This week last year was rated at 44% G/E and the average is 49%. Colorado is rated at 20% Good/Excellent (G/E), down 1 point from last week. Last year was 38% G/E and the average is 48%. Kansas is rated 24% G/E, unchanged from last week. Last year was 62% G/E and the average is 46%.

December Kansas City wheat has support at $9.26-9.23 and resistance at $9.42-9.45.


While the corn and wheat markets have been dominated by Russian activity, China’s Covid concerns have been a big factor in soybeans. Despite excellent export sales reports last week, China’s Covid cases have skyrocketed. Beijing announced three deaths over the weekend for the first time in over six months. The country has locked down 3.7 million people until Friday. The China situation and falling oil prices are putting pressure on the soy complex.

China’s commitments are still 2.11 MMT ahead of last year while non-China business is lagging by .7 MMT. Despite higher commitments, shipments are behind last year by 2 MMT. United States soybeans are still the most competitive in the world, but Brazil values are close behind.

December soybeans have support at $14.17-14.12 and resistance at $14.28-14.36.

Cattle & Hogs

Last week’s Cattle on Feed report showed 98% on feed versus 98.2% estimate, 94% placed versus 96.4% estimate, 100.6% marketed versus 101% estimate. Placements were the lowest October on record.

Other News

CME grain markets will close at their regular 12:20 p.m. MT on Wednesday, November 23rd, and re-open at 7:30am MT on Friday morning, November 25th. There will be an early close at 11:05pm MT on Friday, November 25th.