Soybean and wheat prices also move substantially higher to start the week.
As Russia’s invasion of Ukraine drags on, reports of port closures and international buyers scrambling for alternative grain supplies ignited a wave of technical buying that significantly lifted grain prices Monday. Corn prices finished with limit-up gains, while soybeans raced 3.5% higher. Wheat prices saw an even bigger bounce, with some contracts rising as much as 10% higher today.
A bit of additional rain or snow will be possible across the Northern Plains and extending through the Great Lakes Region between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. Most of the Midwest and Plains could see seasonally wet weather between March 7 and March 13, per NOAA’s latest 8-to-14-day outlook. Cooler-than-normal conditions will also be sweeping into the Plains and western Corn Belt during this time.
Wall St. remains highly volatile amid Russia’s ongoing invasion of Ukraine. The Dow dropped 558 points in afternoon trading to 33,500 as investors continue to shed what they consider riskier assets. Energy prices moved significantly higher, with crude oil jumping 4.5% this afternoon to $96 per barrel. Diesel climbed around 5% higher, with gasoline up around 2.5%. The U.S. Dollar firmed moderately.
On Friday, commodity funds were significant net sellers of all major grain contracts, including corn (-45,000), soybeans (-30,000), soymeal (-8,000), soyoil (-10,000) and CBOT wheat (-25,000).
Corn
Corn prices found solid footing after worries over export disruptions in Ukraine and Russia spurred a round of technical buying today. Spillover support from a broad range of other commodities, including wheat and crude oil, applied additional tailwinds. March futures climbed 37.5 cents to $6.97, with May futures up 35 cents to $6.9075.
Corn basis bids were steady to weak across the central U.S. Monday, falling as much as 10 cents at an Indiana elevator and eroding 2 to 3 cents lower at three other Midwestern locations today.
Corn export inspections eased slightly for the week ending February 24, sliding to 60.8 million bushels. That was still on the high end of trade estimates, however, which ranged between 39.4 million and 66.9 million bushels. Japan topped all destinations, with 18.0 million bushels. Cumulative totals for the 2021/22 marketing year were unable to gain any ground versus last year’s pace, remaining moderately lower year-over-year at 912.8 million bushels.
Ukrainian ports will stay closed until the conclusion of Russia’s invasion, according to the country’s Maritime Administration. At least one port (in Mariupol) was damaged during recent Russian shelling.
If you’re worried about how geopolitical turmoil in the Black Sea region will shape grain trade moving forward, you’re not alone. Bill Biedermann, longtime commodities adviser, is ready to share his expert opinions on this critical topic in a special online live event that will take place Tuesday, March 1 at 10 a.m. CST. Click here to learn how to attend!
South Africa’s 2022 corn production is expected to tilt 11% lower this year after coming off a bumper harvest in 2021 that could be hard to duplicate given current weather trends so far. The country’s Crop Estimates Committee currently estimates production will reach 571.9 million bushels this season.
Preliminary volume estimates were for 396,799 contracts, spilling 27% below Friday’s final count of 541,736.
Soybeans
Soybean prices made substantial inroads Monday, rising around 3.5% higher by the close as geopolitical woes in eastern Europe and production concerns in South America triggered another round of technical buying today. March futures climbed 58 cents to $16.4825, with May futures up 54.25 cents to $16.3875.
Soybean basis bids trended 6 cents higher at an Ohio elevator and 3 cents lower at an Indiana elevator while holding steady elsewhere across the Midwest on Monday.
Private exporters announced two large soybean sales to USDA on Monday. The first is for 5.0 million bushels for delivery to China during the 2022/23 marketing year, which begins September 1. The second is for 4.4 million bushels for delivery to unknown destinations during the current marketing year.
Soybean export inspections dropped moderately below the prior week’s pace, with 27.0 million bushels. That was slightly on the lower end of trade estimates, which came in between 18.4 million and 40.4 million bushels. China again was the No. 1 destination, with 13.6 million bushels. Cumulative totals for the 2021/22 marketing year are still well below last year’s pace after reaching 1.492 billion bushels.
Brazilian consultancy Agrural reports that 44% of the country’s soybean harvest is now complete through February 24. That’s up from 33% a week ago and well ahead of last year’s pace of 25%. Agrural notes that some secondary production areas (Minas Gerais, Bahia, Piaui and Rondonia) could face some yield and quality concerns from excessive rains.
Ukraine has captured many headlines in recent days – and rightfully so – but what should farmers also be focusing on this spring and summer? “History suggests spring rallies in corn and soybeans pay attention to the outlook predictions,” notes grain market analyst Bryce Knorr. “USDA’s forecasts only explain part of the variance in new crop prices from March through May. Planting weather and acreage concerns can also come into play. But the projected ratios of ending stocks to usage in the government’s forecast provide clues about how much – or how little – prices could rally this spring. Then, once the calendar turns to summer, growing season weather typically dictates rallies.” Click here for additional analysis from Knorr.
Preliminary volume estimates were for 199,302 contracts, shifting moderately below Friday’s final count of 313,354.
Wheat
Wheat prices moved tremendously higher on supply chain woes in the Black Sea Region affecting both Russia and Ukraine – two of the world’s top wheat exporters. Spillover strength from other commodities lent some additional support today. March Chicago SRW futures raced 85 cents higher to $9.28, March Kansas City HRW futures climbed 71.25 cents to $9.58, and March MGEX spring wheat futures rose 40.75 cents to $9.93.
Wheat export inspections also fell moderately lower week-over-week, dropping to 14.9 million bushels. That was slightly toward the lower end of trade estimates, which ranged between 11.0 million and 23.0 million bushels. Mexico was the No. 1 destination, with 3.1 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately below last year’s pace, with 569.0 million bushels.
Russian consultancy Sovecon estimates that the country’s wheat exports in February will reach 91.9 million bushels, which would be a month-over-month increase of 4.2%, if realized. Russia is also a modest corn exporter and could ship around 7.9 million bushels this month.
India may stand to benefit from the current turmoil in the Black Sea region. Over the first half of 2022, the country is expected to export almost 147 million bushels of wheat. There are reports of increased purchase inquiries after Russia invaded Ukraine last week. India’s typical wheat buyers include the Philippines, Sri Lanka, South Korea, Bangladesh and the United Arab Emirates.
Egypt has cancelled an international tender to purchase wheat on worries over higher prices and possible supply delays due to Russia’s recent invasion of Ukraine. “The fighting does not look like ending quickly which in turn means wheat exports from Ukraine and Russia are unlikely to return to normal quickly,” according to one European trader.
Algeria issued an international tender to purchase 1.8 million bushels of durum wheat, although the country often ends up purchasing significantly more than the nominal amount listed. The tender closes on Wednesday, and the grain is for shipment in April.
Preliminary volume estimates were for 207,565 CBOT contracts, sliding just below Friday’s final count of 209,780.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Mar
704.75
679
697.5
37.5
22-May
690.75
673.5
690.75
35
Soybeans
22-Mar
1660.75
1621
1644.25
58
22-May
1655
1613
1636.75
54.25
Soymeal $/ton
22-May
454.8
444.3
446.3
5.6
Soyoil cents/lb
22-May
72.93
70.67
72.52
3.57
Wheat $/bushel
22-Mar
930.5
885.5
928
85
22-May
934.75
885.5
934
75
KC Wheat
22-Mar
963.75
916
954.25
71.25
22-May
966
917
953
63.5
MPLS Wheat
22-Mar
993
968.5
989
40.75
22-May
1017.75
970.25
994
30.75
Live Cattle cents/lb
22-Feb
140.75
139.5
140.5
1.225
Feeder Cattle cents/lb
22-Apr
163.975
159.9
162.075
-2.675
Lean Hogs cents/lb
22-Apr
108.675
107.5
107.5
-0.325
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Mar
99.1
94.43
95.62
4.03
Diesel
22-Mar
3.0196
2.9434
3.0132
0.1637
Unleaded Gasoline $/gallon
22-Mar
2.8359
2.7317
2.7682
0.0409
Natural Gas
22-May
4.7
4.393
4.437
-0.048
U.S. Dollar Index
22-Mar
97.4
96.61
96.745
0.126
Gold $/ounce
22-Apr
1935.2
1892.2
1904.3
17.8
Copper
22-Mar
4.5155
4.44
4.456
-0.016
Fertilizer Swaps
(as of 02/25)
DAP Tampa-index
842.5
7.5
DAP-New Orleans
857.1
19.29
Urea-New Orleans
683.4
99.21
Urea-Middle East
665.0
65
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
606.3
0
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