The holidays are often a quiet time in the grain markets, and 2021’s Christmas and New Year promise to be no different.
Jack Scoville, analyst with the Price Futures Group, said the annual trend of choppy grain markets should continue as low volume and trader activity settle in, with not much information to be gleaned out of the price action.
“If we are in a sideways pattern, I don’t think we learn a whole lot,” he said. “Overall, I think prices are probably heading higher, but in the next couple of weeks I don’t know if we’ll find it out quite yet.”
Soybeans were surging for the week ending Dec. 17, as demand and crush reports were all supportive to the market. That positive movement is part of the reason for Scoville’s optimism moving forward.
“If we can build on this, prices are going to go higher,” he said. “If not, we’ll probably chop around between $12.45 and $12.90, or in that area.”
While soybean demand has seen a boost, corn demand has also been excellent, Scoville said. Ethanol markets are showing strong production amid ideas the omicron variant of COVID-19 will have less impact than expected. A smaller impact means more holiday travel and added domestic demand.
“Corn demand has been excellent,” Scoville said. “I think it’s going to continue. Even if gas demand is in flux, ethanol demand is going to be strong. I’m hopeful for demand from that area. For corn, they are really holding the market up now.”
Corn demand has stayed strong globally as well, holding steady with USDA targets, but Scoville said it may tail off in the second half of the marketing year. Wheat and soybeans have not found the same success in the global markets recently, putting added importance to the corn markets.
“Corn will need to be a leader into the upside,” Scoville said. “The beans are probably going to need some help with the weather in South America or something like that to keep the market going.”