Fundamentally Speaking

As the U.S. harvest was wrapping up in late 2021, the prospects for U.S. and world soybean supplies looked more bearish

than for either corn or wheat.

As a consequence, March 2022 soybeans that trended lower since the beginning of June actually traded below $12.00 per bushel on November 9 and with the start of the South American growing season looking positive, additional price declines were anticipated.

Not the case however as the hot and dry pattern of December and the first half of this month in large sections of Argentina and Brazil now has March soybeans at new contract highs given ideas that total South American row crop losses likely to be far greater than what USDA has estimated so far.

This has the trade looking at higher exports for both this year and next along with the need now to make sure prices stay high enough to attract more planted acreage this spring.

This along with a large amount of speculative money flowing into a number of commodity markets starting the first of the year helped push March soybeans up $1.62 higher for the month of January, the largest advance ever for spot soybeans for the first month of the year.

This chart shows the net price change for January in dollars per bushel on the left-hand axis vs. the percent change in price from the prior year's January 31 value on the right-hand axis for spot corn, soybeans, and wheat.

The end of January 2022 settlement for spot soybeans at $14.91 is up 8.9% from the 1/31/21 close and soybean action last January was no slouch either as the March 2021 contract increased by 55 cents, the third largest January advance ever.

Even with an end of the month slide, spot corn still finished January up 33 cents for the month and 14.4% above the year ago spot price though last January corn had its largest January gains ever of 63 cents.

As it has been for a while, wheat is now the laggard of the CME as spot wheat was down a dime for January though the end of the day close for March Chicago wheat at $7.61 is 14.8% above the year ago settle of $6.63.

(c) Copyright 2022 DTN, LLC. All rights reserved.