Morning report: Lower energy prices plague corn, soy complex. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 8-18 cents
Soybeans down 5-14 cents; Soymeal down $4.40/ton; Soyoil down $0.17/lb
Chicago wheat down 60-64 cents; Kansas City wheat down 55-57 cents; Minneapolis wheat down 26-29 cents
*Prices as of 6:55am CDT.
Corn
Lower energy prices, pre-USDA report positioning, and a cross-country rain system that helped ease some dry planting concerns all weighed corn prices $0.06-$0.15/bushel lower overnight. Potential ceasefire talks between Russia and Ukraine overnight generally weighed corn and wheat prices lower as well.
Soybeans
Soybean prices did not suffer as heavy of overnight losses as those of corn and wheat, but still shed $0.05-$0.10/bushel on lower energy prices. Losses were largely capped by favorable export paces.
It was only a matter of time before discounted Russian commodities began moving again on global markets.
India booked an order of 45,000 metric tonnes (MT) of sunflower oil from Russia at record prices overnight. The sale went for $2,150/MT for an April shipment, compared to $1,630/MT prior to Russia’s unprovoked military occupation of Ukraine beginning last month. India, the world’s largest edible oil importer, is jumping through extra hoops to procure the high-dollar sunflower oil shipment.
“As vessel loading is not possible in Ukraine, buyers are trying to secure supplies from Russia,” Pradeep Chowdhry, managing director of Gemini Edibles & Fats India Pvt. Ltd, told Reuters.
India held off on booking orders of Russian sunflower oil over the past month after the West levied sanctions against Russian exports as punishment for its invasion into Ukraine. But Indian banks have begun opening letters of credit for traders looking to purchase Russian agricultural products and providing other workarounds to allow for Russian produce to be accessed by Indian buyers.
“Indian buyers are paying in dollars. Indian insurance companies are providing cover to vessels bringing sunoil from Russia,” a New Delhi-based dealer with a global trading firm told Reuters.
Ukraine produced over 47% of the world’s exportable sunflower oil supplies in the 2021/22 marketing year, though that value is likely to disintegrate in 2022 as sowing progress in Ukraine struggles amidst the Russian occupation.
Sunflower imports from Argentina have helped tide over Indian demand for now, but it is not likely a sustainable strategy. “Even after the imports from Russia and Argentina, there would be shortfall of sunoil. Nobody can replace Ukraine’s shipments,” said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm.
“Sunflower oil is very expensive. This is forcing price sensitive buyers to shift to other oils,” Bajoria told Reuters.
This is an important transaction for a couple reasons. First – it signals to the markets that supplies remain accessible to global buyers if they are willing to purchase from Russia. Second – yes, sanctions may have a sticker shock effect that provides a temporary deterrence from buying Russian supplies. But the reality is that in an era of tight global feed and food supplies, Russia’s produce will not likely stay away from the market for long.
To be clear, this is not a trade that is going to make or break grain and soybean markets. But it provides an important insight to how global trade flows may readjust in the future amid the ongoing Russian-Ukrainian conflict and the resulting Western sanctions that have restricted business dealings for Russian-owned entities.
Wheat
Another cross-country rain system this week could boost winter wheat ratings in the U.S. as dry weather continues to weigh heavily on crop condition ratings. That sentiment, paired with ongoing ceasefire talks between Russia and Ukraine, led to significant losses in the wheat complex overnight.
Chicago wheat is hovering right at the $10/bushel benchmark this morning on the sentiments after posting a $0.47-$0.53/bushel overnight loss. Kansas City and Minneapolis futures are resting more comfortably in the $10.20-$10.50/bushel range, but still suffered 2%-4% losses overnight on ceasefire negotiations.
Last week’s cross-country precipitation system is paying off for wheat crops on the Plains. Weekly crop reports from state-level USDA agencies found that winter wheat crops in Kansas, the country’s top wheat producer, improved 7% from a week ago to 32% good to excellent as of Sunday.
South Dakota’s winter wheat crop rose 2% from late February readings, rising to 26% good to excellent through the end of March. Soft red winter wheat crop conditions in Illinois remained consistent with February totals, settling at 59% good to excellent for a second straight month.
Winter wheat crops in the Mississippi Delta are largely in good to excellent condition, though those states do not produce enough volume to offset struggling winter wheat crops in the Plains and Pacific Northwest.
But the winter wheat crop continues to struggle elsewhere across the country. In Texas and Colorado, none of the winter wheat crop is rated in excellent condition, with only 7% and 11% of crops rated in good condition. The Texas crop saw a 1% weekly improvement in ratings, while Colorado’s ratings slid 8% from last week (I can vouch for this – my lawn needs water but I refuse to turn on the irrigation system this early).
Oklahoma’s crop ratings also plummeted on the week, falling 3% to 18% good to excellent as of Sunday. Nebraska’s winter wheat crop conditions fell 9% from February to 36% good to excellent at the end of March.
White wheat prospects are also in trouble this year in the Pacific Northwest. Winter wheat crops in Montana were only rated as 11% in good condition, with no crops reportedly rated as excellent. About 21% of Montana’s winter wheat crops were in good condition a month ago.
Weather
Soil temps in my yard are at 52 degrees (trending warm this year on the CO Front Range), so I will be doing some serious preemergent work today. I’ll need to act fast because a storm system brewing in the Central Rockies will likely bring rain to the Plains and Upper Midwest over the next 24 hours, according to NOAA’s short-range forecasts.
The system will slowly move east across the Heartland over the next few days, but the added moisture will be highly beneficial for winter wheat crops and sowing conditions on the Plains and in the Upper Midwest. The Southern Plains and Southern Minnesota will likely see up to an inch of precipitation accumulation over the next 24 hours while the rest of the Heartland can expect up to a quarter inch in that same time frame.
Financials
Stock futures trended higher this morning as Russia and Ukraine sat through a first round of ceasefire talks. Oil prices and the dollar edged lower on the peace prospects. Any potential gains are likely to be capped by resurging COVID cases in China, which are prompting strict lockdown measures to curb the virus’s spread.
Also worth a read on our website, FarmFutures.com:
Check out our 2022 acreage projections from our March 2022 Farm Futures survey!
Join us on Thursday at 1pm CDT to discuss the latest USDA reports! I’ll be featured in a Farm Progress 365 session to discuss the impacts of the updated data.
Naomi Blohm weighs the pros and cons of selling old crop corn supplies now versus waiting for a summer rally.
Will old crop supplies last before 2022 crops come online? Bryce Knorr points out that this factor will be on everyone’s minds ahead of Thursday’s USDA reports.
Morning Ag Commodity Prices – 3/29/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAY ’22 CORN
$ / BSH
7.475
7.365
7.37
-0.115
-1.54%
JUL ’22 CORN
$ / BSH
7.29
7.18
7.1825
-0.1225
-1.68%
SEP ’22 CORN
$ / BSH
6.82
6.73
6.7325
-0.085
-1.25%
DEC ’22 CORN
$ / BSH
6.655
6.58
6.58
-0.065
-0.98%
MAR ’23 CORN
$ / BSH
6.6675
6.6025
6.6025
-0.06
-0.90%
MAY ’23 CORN
$ / BSH
6.68
6.6225
6.6225
-0.055
-0.82%
JUL ’23 CORN
$ / BSH
6.6625
6.6175
6.6175
-0.045
-0.68%
MAY ’22 SOYBEANS
$ / BSH
16.73
16.575
16.58
-0.0625
-0.38%
JUL ’22 SOYBEANS
$ / BSH
16.555
16.4
16.4025
-0.065
-0.39%
AUG ’22 SOYBEANS
$ / BSH
16.085
15.94
15.9425
-0.065
-0.41%
SEP ’22 SOYBEANS
$ / BSH
15.24
15.0925
15.095
-0.0875
-0.58%
NOV ’22 SOYBEANS
$ / BSH
14.74
14.5975
14.6
-0.0875
-0.60%
JAN ’23 SOYBEANS
$ / BSH
14.665
14.545
14.545
-0.075
-0.51%
MAR ’23 SOYBEANS
$ / BSH
14.3725
14.25
14.25
-0.075
-0.52%
MAY ’23 SOYBEANS
$ / BSH
14.3
14.1825
14.1825
-0.075
-0.53%
JUL ’23 SOYBEANS
$ / BSH
14.2775
14.1625
14.1625
-0.075
-0.53%
MAY ’22 SOYBEAN OIL
$ / LB
73.45
72.1
72.18
-0.27
-0.37%
JUL ’22 SOYBEAN OIL
$ / LB
71.6
70.2
70.22
-0.36
-0.51%
MAY ’22 SOY MEAL
$ / TON
478.7
475.6
476.1
-2.8
-0.58%
JUL ’22 SOY MEAL
$ / TON
473
469.6
470.4
-2.4
-0.51%
AUG ’22 SOY MEAL
$ / TON
460.2
458
458.9
-1.6
-0.35%
SEP ’22 SOY MEAL
$ / TON
444.3
442
442.7
-1.6
-0.36%
OCT ’22 SOY MEAL
$ / TON
429.5
426.4
426.7
-2.5
-0.58%
MAY ’22 Chicago SRW
$ / BSH
10.6825
10.17
10.1925
-0.3775
-3.57%
JUL ’22 Chicago SRW
$ / BSH
10.615
10.1425
10.1725
-0.3425
-3.26%
SEP ’22 Chicago SRW
$ / BSH
10.4775
10.01
10.0375
-0.3425
-3.30%
DEC ’22 Chicago SRW
$ / BSH
10.29
9.85
9.87
-0.35
-3.42%
MAR ’23 Chicago SRW
$ / BSH
10.035
9.6475
9.6725
-0.305
-3.06%
MAY ’22 Kansas City HRW
$ / BSH
10.7875
10.365
10.375
-0.33
-3.08%
JUL ’22 Kansas City HRW
$ / BSH
10.7775
10.365
10.3775
-0.3175
-2.97%
SEP ’22 Kansas City HRW
$ / BSH
10.7275
10.33
10.33
-0.31
-2.91%
DEC ’22 Kansas City HRW
$ / BSH
10.675
10.2925
10.2925
-0.295
-2.79%
MAR ’23 Kansas City HRW
$ / BSH
10.485
10.4525
10.4525
0.0225
0.22%
MAY ’22 MLPS Spring Wheat
$ / BSH
10.8475
10.6225
10.6225
-0.1725
-1.60%
JUL ’22 MLPS Spring Wheat
$ / BSH
10.8
10.605
10.605
-0.1775
-1.65%
SEP ’22 MLPS Spring Wheat
$ / BSH
10.6425
10.45
10.45
-0.135
-1.28%
DEC ’22 MLPS Spring Wheat
$ / BSH
10.6375
10.45
10.45
-0.13
-1.23%
MAR ’23 MLPS Spring Wheat
$ / BSH
10.5325
10.48
10.5325
-0.0025
-0.02%
JUN ’21 ICE Dollar Index
$
99.265
98.615
98.625
-0.43
-0.43%
MA ’21 Light Crude
$ / BBL
107.84
103.46
105.84
-0.12
-0.11%
JU ’21 Light Crude
$ / BBL
105.45
101.19
103.43
0.01
0.01%
APR ’22 ULS Diesel
$ /U GAL
3.8513
3.6803
3.8012
0.0178
0.47%
MAY ’22 ULS Diesel
$ /U GAL
3.5374
3.3625
3.4584
0.0052
0.15%
APR ’22 Gasoline
$ /U GAL
3.2891
3.1482
3.2725
0.0537
1.67%
MAY ’22 Gasoline
$ /U GAL
3.2746
3.1307
3.2258
0.0296
0.93%
MAR ’22 Feeder Cattle
$ / CWT
0
#N/A
156.1
0
0.00%
APR ’22 Feeder Cattle
$ / CWT
0
#N/A
160.825
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
140.3
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
136.775
0
0.00%
APR ’22 Live Hogs
$ / CWT
0
#N/A
107.575
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
119.3
0
0.00%
MAR ’22 Class III Milk
$ / CWT
22.42
22.42
22.42
0.01
0.04%
APR ’22 Class III Milk
$ / CWT
23.6
23.53
23.57
0.04
0.17%
MAY ’22 Class III Milk
$ / CWT
24.36
24.29
24.29
0.13
0.54%
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