By Kirk Maltais


--Wheat for March delivery fell 1.3% to $7.80 a bushel on the Chicago Board of Trade Friday on word negotiations are continuing between the U.S. and Russia to de-escalate tensions at the Russia-Ukraine border.

--Soybeans for March delivery fell 0.8% to $14.14 1/4 a bushel.

--Corn for March delivery rose 0.9% to $6.16 1/4 a bushel.




Tight Situation: Wheat futures on the CBOT were down all session Friday as grain traders watched for developments from talks between the U.S. and Russia regarding a buildup of Russian troops on the Russia-Ukraine border. Secretary of State Antony Blinken said negotiations are continuing. Should a conflict break out, it's expected that wheat exports would be impacted as both Russia and Ukraine are leading exporters.

Energy Support: While much of the commodity space traded in the red Friday, CBOT corn futures closed higher. A source of support for the contract was the EIA's weekly report Thursday, which showed improvement in the daily ethanol production rate - pegging it at 1.05 million barrels per day, up from 1.01 million barrels per day previously. "Over the last four weeks... U.S. ethanol production averaged 11% above year ago levels, continuing to run solidly above the roughly 4.6% year-over-year increase we estimate is needed through the end of August following USDA's upward revision in their 2021/22 corn for ethanol usage estimate to 5.325 billion bushels," said Tomm Pfitzenmaier of Summit Commodity Brokerage.




Factoring in Risk: Even with grain futures mostly lower in trading Friday, they are still up for the week - despite weather in South America being better than previously forecast. The reason may be due to traders looking forward to the spring planting season, amid high input costs for farmers. "It is understandable to see markets build in a bit of risk premium as we shift focus to the 2022 growing season, and no doubt, funds have shifted part of their capital back to commodities," said Dan Hueber of the Hueber Report. "That said, we better find something a bit more nutritious for the bulls soon, or they are likely to become discouraged."

Slimming Expectations: For 2022, analysts are expecting the separation between corn and soybean acreage to be tighter than in previous years. Craig Turner of Daniels Trading projects corn to hit roughly 91 million acres in 2022, down over 2 million acres from last year, while soybean could hit 89 million acres, up 2 million acres. "Without trendline yields or better, 2022 might bring another marketing year of tight ending stocks and elevated prices," said Mr. Turner. Yesterday, another firm forecast that U.S. soybean acreage may exceed corn for the second time in history.

Breaking Trend: Grain futures trading higher overall is part of a wider trend of commodities faring better this week than equities, which have been hammered by a tech-stock selloff. "The prices of equities and commodities tracked each other relatively closely throughout the pandemic, but they have diverged sharply since the start of 2022, with commodities continuing to make gains," said Caroline Bain of Capital Economics. Longer term, momentum in commodities overall is likely to slow. "We expect commodity prices to ease back over the course of the year on the back of slower growth in economic activity and improved supply," she added.




-The USDA will release its weekly grains export inspections report at 11 a.m. ET Monday.

-The USDA will release its monthly Cold Storage report at 3 p.m. ET Monday.

-ADM will release its fourth-quarter earnings report before the stock market opens Tuesday.


Write to Kirk Maltais at


(END) Dow Jones Newswires

January 21, 2022 15:45 ET (20:45 GMT)

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