Corn down 1-5 cents
Soybeans up 1-9 cents; Soymeal up $3.90/ton; Soyoil down $1.70/lb
Chicago wheat down 13-19 cents; Kansas City wheat down 11-12 cents; Minneapolis wheat down 2-5 cents
*Prices as of 6:55am CDT.
Highlights from yesterday’s weekly export report: My colleague, Ben Potter, typically summarizes highlights from USDA-FAS’s weekly export sales report. But I gleaned a few highlights of my own that I think farmers should be aware of going forward:
Global markets have largely shunned old crop U.S. wheat exports in the wake of the Black Sea conflict, but Southeast Asian buyers are increasingly bullish on new crop export sales.
Specifically, buyers from the Philippines are booking more new crop (2021/22) U.S. wheat export orders than the same time last year. Filipino orders totaled 9.5 million bushels in yesterday’s report, accounting for nearly 80% of orders for the week ending March 10.
Marketing year to date new crop export orders for the Philippines are up over two-thirds from the same time last year, suggesting that more market opportunities are available in the coming months from Southeast Asia for U.S. wheat exporters.
Old crop corn and soybean export sales scaled back last week’s volumes, but interest creeped up in new crop export orders through the week ending March 10.
For new crop corn exports, marketing year to date outstanding sales are currently 18% higher than the same time a year ago, led by an uptick in orders from Mexico.
Amid a questionable 2021/22 wheat crop and even with a forecasted 2.3-million-acre increase in soybean acreage next year, China has already booked 2.4 times more 2021/22 soybean export orders from the U.S. in the current marketing year to date compared to the same time a year ago.
China plays its cards close to its chest, but this points to steady crush demand next year and concerns that the South American crop shortfalls could result in an early season for U.S. soy exporters.
These new sale orders are great for export prospects. And while they may provide a temporary price uptick, until the loading paces match order rates, true price support will not be cemented into these markets.
We are entering peak corn export season, so watching weekly corn export loading paces over the next three months will provide more firm data to support prices. This week’s data set was not overly encouraging for corn shipments, but the season is young. Keeping export terminals operating at full capacity and barring a potential rail strike in Canada, more profit opportunities could be on the way for the corn complex shortly.
Corn
Corn prices edged $0.01-$0.03/bushel lower this morning as market optimism over an end to the Black Sea military conflict continued amid ongoing diplomatic negotiations between Russia and Ukraine. Losses were kept in check by weather concerns in South America.
Harvest has begun on soybean and corn crops in Argentina and despite timely rains late in the crop cycle, persistent drought for much of this season fueled by La Nina weather patterns ultimately looks to be the biggest factor for Argentine yields this year.
With corn crops 7% harvested, the Buenos Aires Grains Exchange projects Argentina’s 2021/22 corn crop at 2.01 billion bushels. Current USDA forecasts for the crop peg it at 2.09 billion bushels. The exchange estimates its soybean harvest at 1.54 billion bushels, with USDA’s estimates slightly higher at 1.60 billion bushels.
Soybean yields range between 29.7 – 59.5 bushels per acre, sinking below the country’s five-year average. “If this trend continues in the main producing regions, it could affect our current production projection,” the exchange said.
Soybeans
Soybean futures rose $0.01-$0.10/bushel overnight on export restrictions in Argentina and concerns about lower soybean yields for the world’s top exporter of soy products. Soyoil prices slid lower after increased global edible oil access sent palm oil prices falling overnight. But the slide did not appear to be significantly impacting soybean prices this morning.
Brazil’s 2022/23 soybean crop will likely be smaller next year as high fertilizer costs and increasingly tight fertilizer supplies will make input accessibility more challenging for Brazilian soybean growers. Brazil’s soybean acreage has been growing between 2.5 million – 3.7 million acres per year, but the supply chain disruptions in the Black Sea fertilizer markets could hinder that development.
“We now estimate between 500,000 hectares (1.2M ac.) and 1 million hectares (2.5M ac.) of soy area growth,” Andre Pessoa, partner at Agroconsult, told Reuters yesterday. “Given the current scenario, it would be closer to 500,000 hectares (1.2M ac.) of area expansion.”
Agroconsult surveyed growers in Brazil’s top soybean producing states, finding that 2022/23 Brazilian soybean production could fall 11% on the year to 4.59 billion bushels. That could keep already tight global soybean supplies further constricted for another year.
Wheat
Markets awaited further news of Russian and Ukrainian peace negotiations overnight, sending U.S. wheat futures lower. “The market is a bit calmer but there’s still a lot of nervousness in the air,” a European trader told Reuters this morning.
U.S. President Joe Biden will pursue talks with Chinese President Xi Jinping today in hopes of economically isolating Russia further.
Russia has largely resumed export loading in the Black Sea, but the International Grains Council expects it will end up shipping 2% fewer volumes this year as sanctions limit its global appeal. The IGC forecasts Russia will ship 37.1 million metric tonnes (MMT) of grain in the 2021/22 marketing year.
“While loadings (in Russia) recently resumed, volumes may be hampered by trade finance restrictions and additional ocean freight insurance requirements,” the IGC said.
The IGC drastically cut Ukraine’s export figures amid Black Sea port closures amid the ongoing Russian invasion, though some grain continues to flow out of the country by rail through the fighting. The IGC reduced 2021/22 grain flows out of Ukraine by a staggering 24% to 47.8MMT as Ukrainian grain remains inaccessible to Black Sea markets.
“Immediate threats are mainly centered on the disruption to export flows. Commercial Black Sea port loadings are currently suspended in Ukraine,” the IGC said.
Ukraine’s food supply chains are “falling apart,” according to the World Food Programme. “Movements of goods have slowed down due to insecurity and the reluctance of drivers,” Jakob Kern, WFP Emergency Coordinator for the Ukraine crisis, said in an overnight press conference.
Russia continues to destroy Ukraine’s infrastructure and besiege its cities amid its ongoing invasion into Ukraine, targeting civilians in the process. Western sanctions on Russia have rendered its wheat supplies inaccessible to many global buyers – including the WFP – as prices have skyrocketed.
“With global food prices at an all-time high, WFP is also concerned about the impact of the Ukraine crisis on food security globally, especially hunger hot spots,” Kern said, noting that other countries reliant on Black Sea wheat supplies would likely begin to suffer “collateral hunger.”
“We are changing suppliers now but that has an impact on prices,” Kern noted. “The further away you buy it, the more expensive it gets.”
Weather
Yesterday’s precipitation system will shift over the Mississippi River Valley today and into the Eastern Corn Belt, according to NOAA’s short-range forecasts. The Southeast will see more thunderstorms with today’s system.
Weekly drought readings eased off last week’s highs in yesterday’s Drought Monitor update from the University of Nebraska thanks to rains in the Southeast. But dry conditions in the Midwest, Plains, and West kept the weekly rating elevated with 74.25% of U.S. acreage in abnormally dry to exceptional drought condition.
Drought conditions are likely to persist or worsen in the Western U.S. this spring as La Nina weather patterns continue to usher in above average temperatures and below average rainfall.
“Prolonged, persistent drought will continue to impact much of the West and drought is forecast to develop during April through June in areas of the Southwest and central and southern Plains,” Jon Gottschalck, chief of the Operational Prediction Branch of NOAA’s Climate Prediction Center, said during a webinar hosted by NOAA yesterday.
“Since the beginning of the 21st century, about three out of four years in California have been drought years. That has led producers to have to adapt to the new normal, which is drought more often than not,” Brad Rippey, meteorologist with the U.S. Department of Agriculture, said. “It does make for some very difficult producer decisions as to what to continue to grow and what to keep alive.”
A cross-country precipitation system travelling across the Plains and Midwest this week could help ease dry conditions somewhat ahead of peak planting season, which could turn out to be timely miracle for Heartland growers’ parched soil moisture levels.
But not everywhere is suffering for moisture. NOAA announced last week in its Annual Spring Flood Outlook that excessive moisture in Indiana and the Red River Valley at the Canadian/Minnesotan/North Dakotan border could hinder planting activities in the respective regions. Spring wheat acreage in the Northern Plains is likely to be the most heavily impacted by the forecast.
NOAA estimates that flooding risk on the Mississippi River will be minor this year. At the Mississippi River headwaters, “snow water equivalent values across the area are still less than 1 inch which is still below normal,” the agency said in its latest update last week.
Of course, this could change if heavy spring rains settle into the Mississippi River Valley. But for the time being, barge traffic on the Mississippi River should be able to flow unhindered, which is very promising for growers who sell into export terminals destined for the Gulf on the Mississippi River, especially as peak corn export season ramps up over the next three months.
March Madness
Hawkeye Nation, what the heck?! I graciously accepted your defeat of my Purdue Boilermakers in the Big 10 tourney on Sunday (I’ve seen 5th graders play with better ball handling skills than the Boilers last Sunday…) and gave you the benefit of the doubt in this tourney, sending you on for another round. Why?!?!?!?!
I’m hurt and confused but LOVING all the Cinderella upsets already. The Kentucky loss trashed my bracket (and lit UP the family group chat!) but it’s an easy price to pay for a great storyline!
Enjoy the madness this weekend, everyone! The women’s tourney kicks off today and hopefully Iowa’s women’s team has my back for that bracket competition!
Financials
Stock markets edged lower this morning amid nuclear threats from Russian President Vladimir Putin. Meanwhile, the U.S. and China will meet in an attempt to further isolate Russia following its unprovoked military invasion into Ukraine. Energy prices inched up with stagflation concerns after the Federal Reserve announced a 0.25% interest rate hike earlier this week.
Last, but not least, I want to wish my favorite agronomist a very happy birthday! Nearly three decades ago, this guy was the BEST early birthday present I could’ve asked for and has been a brilliant guiding light in my fertilizer and chemical market reporting. Happy birthday to you and I hope your girls spoil you rotten today!
Also worth a read on our website, FarmFutures.com:
AgMarket.Net’s Brian Splitt examines four technical signs that could trigger a grain market selloff.
Farm Futures senior editor Ben Potter interviews experts about the long-term impacts of the Black Sea conflict on the agriculture industry.
Mike Downey cautions farmers to be wary of the “free” steak dinner advertised for transition planning guidance.
Advance Trading’s Dave Fogel has tips to help farmers enjoy high commodity prices instead of begrudging them.
Are more conservation dollars going to be allocated in the 2023 Farm Bill?
Morning Ag Commodity Prices – 3/18/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAY ’22 CORN
$ / BSH
7.55
7.4875
7.5175
-0.0275
-0.36%
JUL ’22 CORN
$ / BSH
7.19
7.1325
7.1625
-0.025
-0.35%
SEP ’22 CORN
$ / BSH
6.685
6.63
6.6425
-0.0325
-0.49%
DEC ’22 CORN
$ / BSH
6.48
6.42
6.4375
-0.0125
-0.19%
MAR ’23 CORN
$ / BSH
6.4825
6.4225
6.435
-0.0175
-0.27%
MAY ’23 CORN
$ / BSH
6.48
6.435
6.45
-0.005
-0.08%
JUL ’23 CORN
$ / BSH
6.4525
6.4075
6.4125
-0.025
-0.39%
MAY ’22 SOYBEANS
$ / BSH
16.89
16.665
16.7775
0.0925
0.55%
JUL ’22 SOYBEANS
$ / BSH
16.67
16.455
16.56
0.0875
0.53%
AUG ’22 SOYBEANS
$ / BSH
16.19
16.025
16.0775
0.035
0.22%
SEP ’22 SOYBEANS
$ / BSH
15.34
15.1975
15.24
0.0125
0.08%
NOV ’22 SOYBEANS
$ / BSH
14.8
14.65
14.6875
-0.005
-0.03%
JAN ’23 SOYBEANS
$ / BSH
14.67
14.5525
14.5625
-0.01
-0.07%
MAR ’23 SOYBEANS
$ / BSH
14.255
14.155
14.1775
0.0125
0.09%
MAY ’23 SOYBEANS
$ / BSH
14.0925
14.0475
14.05
0.0125
0.09%
JUL ’23 SOYBEANS
$ / BSH
14.08
14.05
14.0725
0.0825
0.59%
MAY ’22 SOYBEAN OIL
$ / LB
75.24
72.68
72.96
-1.67
-2.24%
JUL ’22 SOYBEAN OIL
$ / LB
71.47
69.5
69.74
-1.12
-1.58%
MAY ’22 SOY MEAL
$ / TON
479
474.2
478.3
4.2
0.89%
JUL ’22 SOY MEAL
$ / TON
469.6
464.3
468.8
4.3
0.93%
AUG ’22 SOY MEAL
$ / TON
455.3
450.8
454.9
3.4
0.75%
SEP ’22 SOY MEAL
$ / TON
441.5
436.1
441.2
3.8
0.87%
OCT ’22 SOY MEAL
$ / TON
428.3
424.4
428.3
3.9
0.92%
MAY ’22 Chicago SRW
$ / BSH
11.06
10.7675
10.7925
-0.1875
-1.71%
JUL ’22 Chicago SRW
$ / BSH
10.865
10.5825
10.61
-0.15
-1.39%
SEP ’22 Chicago SRW
$ / BSH
10.42
10.145
10.1875
-0.12
-1.16%
DEC ’22 Chicago SRW
$ / BSH
9.9575
9.725
9.79
-0.085
-0.86%
MAR ’23 Chicago SRW
$ / BSH
9.62
9.4375
9.4525
-0.055
-0.58%
MAY ’22 Kansas City HRW
$ / BSH
10.9725
10.75
10.7975
-0.125
-1.14%
JUL ’22 Kansas City HRW
$ / BSH
10.9
10.6625
10.71
-0.1225
-1.13%
SEP ’22 Kansas City HRW
$ / BSH
10.65
10.4475
10.4775
-0.11
-1.04%
DEC ’22 Kansas City HRW
$ / BSH
10.4325
10.1925
10.2725
-0.0625
-0.60%
MAR ’23 Kansas City HRW
$ / BSH
10.025
#N/A
10.0175
0
0.00%
MAY ’22 MLPS Spring Wheat
$ / BSH
10.8775
10.68
10.75
-0.04
-0.37%
JUL ’22 MLPS Spring Wheat
$ / BSH
10.7625
10.545
10.65
-0.02
-0.19%
SEP ’22 MLPS Spring Wheat
$ / BSH
10.4725
10.335
10.45
0.0125
0.12%
DEC ’22 MLPS Spring Wheat
$ / BSH
10.465
10.2725
10.4625
0.1075
1.04%
MAR ’23 MLPS Spring Wheat
$ / BSH
10.28
10.28
10.28
0.0175
0.17%
JUN ’21 ICE Dollar Index
$
98.415
97.845
98.385
0.41
0.42%
AP ’21 Light Crude
$ / BBL
106.28
103.1
103.26
0.28
0.27%
MA ’21 Light Crude
$ / BBL
104.67
101.62
101.97
0.32
0.31%
APR ’22 ULS Diesel
$ /U GAL
3.5737
3.4611
3.503
0.0156
0.45%
MAY ’22 ULS Diesel
$ /U GAL
3.3778
3.2744
3.3018
0.0081
0.25%
APR ’22 Gasoline
$ /U GAL
3.2711
3.1885
3.1929
-0.0237
-0.74%
MAY ’22 Gasoline
$ /U GAL
3.2377
3.1556
3.161
-0.0212
-0.67%
MAR ’22 Feeder Cattle
$ / CWT
0
#N/A
156.55
0
0.00%
APR ’22 Feeder Cattle
$ / CWT
0
#N/A
161.1
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
139.475
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
135.925
0
0.00%
APR ’22 Live Hogs
$ / CWT
0
#N/A
100.35
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
108
0
0.00%
MAR ’22 Class III Milk
$ / CWT
22.43
22.43
22.43
0.04
0.18%
APR ’22 Class III Milk
$ / CWT
23.25
23.25
23.25
0.02
0.09%
MAY ’22 Class III Milk
$ / CWT
23.72
23.72
23.72
-0.03
-0.13%
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Morning report: Corn and wheat edge lower on ceasefire, China hopes. (Comments are updated by 7:30 a.m. Central Time.)
