Morning report: Wheat charges higher on Black Sea concerns. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 1-3 cents
Soybeans up 7-10 cents; Soymeal down $2.90/ton; Soyoil up $0.63/lb
Chicago wheat up 22-29 cents; Kansas City wheat up 25-27 cents; Minneapolis wheat up 24-27 cents
*Prices as of 6:50am CDT.
CP strike goes into arbitration, resuming operations
Canadian Pacific Railways Ltd will resume normal operations today after the company agreed to arbitration proceedings with the Teamsters Canada Rail Conference (TCRC) union overnight. CP halted normal operations after its locomotive employees in the TCRC union began a strike on Sunday to protest wages, benefits, and pension caps.
“While arbitration is not the preferred method, we were able to negotiate terms and conditions that were in the best interest of our members,” TCRC union spokesperson Dave Fulton said in a statement.
With the arbitration period underway, facilitated by mediation efforts from Canada’s Ministry of Labour, CP has agreed to continue its normal railway routes while the company comes to an agreement with TCRC over employee pay and benefits.
CP is Canada’s second-largest railway and transports much of the country’s grain and fertilizer supplies during a time in which global stocks are historically tight following Russian’s invasion into Ukraine, which has rendered Black Sea grain supplies inaccessible due to economic sanctions and Russia’s military blockade of Ukrainian ports.
As I’ve noted in earlier reports, Canada’s drought last summer has drastically trimmed feed supplies in Alberta, where many livestock feeders have become dependent upon American grain shipments to feed their herds. Feedstocks are so tight that many of those imported grain supplies are fed to cattle directly off the train tracks.
Similarly, as U.S. growers gear up for spring planting season, reduced access to Canada’s potash and other fertilizer supplies could tighten input availability this spring and further increase prices for growers who may not have yet locked in 2022 input pricing.
Corn
It was a quiet night of trading for grain markets, with little new news following yesterday’s trading session. Corn futures edged slightly higher overnight, posting a $0.01-$0.03/gain on muted overnight energy market activity and bullish export prospects from yesterday’s weekly Export Inspections report from USDA.
Soybeans
Brazil had harvested about 69% of its soybean crop as of last Thursday, which is still 10% ahead of the same time last year but continues to face rain delays and high-moisture contents as harvest plods along in the southern state of Parana.
Soybean futures prices rose $0.08-$0.11/bushel overnight on Brazil’s ongoing harvest delays, though gains were capped by yesterday’s news that Argentina began issuing new registrations for soymeal and soyoil exports yesterday, albeit with higher export taxes. Soy markets soared last week after Argentina announced a temporary export ban for its soy products, of which the country is the world’s top exporter.
Wheat
Wheat prices charged upward overnight, continuing yesterday’s rally as markets increasingly expect the Russian-Ukrainian war to continue on longer than the world had previously hoped.
“Black Sea supplies are likely to be away from the market for a longer period than everyone had expected,” one Singapore-based grains trader told Reuters last night. “Buyers will have to pay more to buy grains from other origins.”
A senior industry official was cited by Reuters as noting that Ukraine is likely to face a $6 billion loss in revenue from the Russian military blockades of Ukraine’s export terminals in the Black Sea. Russia, meanwhile, has resumed much of its grain exporting operations via the Azov Sea.
Futures prices for all three major wheat varieties traded in the U.S. all charged past the $11/bushel benchmark this morning, though with few wheat stocks left in the U.S. and buyers increasingly unlikely to allow farmers to lock in high pricing during the Black Sea conflict due to high market volatility, it is not likely that growers will be able to maximize profit opportunities from the current economic environment.
The European Commission’s “Green Deal,” a publication on proposals to improve sustainable farming in the European Union, will be delaying in its release this week as concerns about tightening grain supplies amid the Black Sea conflict in Ukraine are easing environmental concerns as the world focuses on ensuring adequate food supplies in the coming year.
Iraq, which relies on Black Sea supplies, does not have more than three months of wheat supplies on hand. This reality somewhat negates “green” efforts pushed in Europe and calls for easily and affordable production of foodstuffs as Black Sea supplies remain inaccessible while global demand for wheat – as well as other grains and oilseeds – continues to soar to unprecedented levels.
Weather
Happy Spring, everyone! A rain-snow mix is headed to the Upper Midwest and Central Plains today, according to NOAA’s short-range forecasts. Rain and thunderstorms are likely for the rest of the Midwest and South today, stretching as far east as Pennsylvania.
Drought-stressed regions of the Upper Midwest, including Wisconsin, Northern Illinois, Iowa, and Minnesota, will see up to an inch or more of precipitation accumulation today, which bodes well for future planting intentions in the coming weeks.
Dry weather continues to linger over the Plains, which will further exacerbate drought conditions in the region and threaten viability of winter wheat crops as they emerge from dormancy.
March Madness
Like Magic Johnson playing the fortune teller in the Capital One commercial, I’m back! I spent the weekend in the mountains skiing with friends and watching March Madness but am back this morning and ready for the grain markets this week. Spring skiing might be one of my favorite things ever. We even had a bit of a powder day yesterday and it was glorious!
I was devastated by Iowa and Baylor’s loss in the women’s tourney and stunned by the Auburn and Wisconsin upsets on the men’s side. But my Boilermakers won on Sunday night to make it into next weekend’s Sweet Sixteen, so I was pretty happy with the weekend’s outcomes overall!
Financials
S&P 500 futures inched up 13.25 points (0.30%) overnight to $4,465.50 as yesterday’s rally in the oil markets took a breather this morning. The bond market selloff continued after Federal Reserve Chairman Jerome Powell suggested yesterday that the Fed will take more aggressive action to combat soaring inflation in the coming months if necessary.
Also worth a read on our website, FarmFutures.com:
La Nina is back for a second straight spring and Bryce Knorr has key insights about tight supplies, fertilizer markets, and the ongoing Russian-Ukrainian war that could point to more high prices.
Commstock Investment’s Matthew Kruse outlines the importance of Brazil’s safrinha crop after the country finished up its soybean harvest last week.
AgMarket.Net’s Brian Splitt examines four technical signs that could trigger a grain market selloff.
Mike Downey cautions farmers to be wary of the “free” steak dinner advertised for transition planning guidance.
Morning Ag Commodity Prices – 3/22/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAY ’22 CORN
$ / BSH
7.61
7.515
7.575
0.0125
0.17%
JUL ’22 CORN
$ / BSH
7.34
7.245
7.3075
0.025
0.34%
SEP ’22 CORN
$ / BSH
6.885
6.795
6.85
0.0325
0.48%
DEC ’22 CORN
$ / BSH
6.7075
6.6175
6.675
0.035
0.53%
MAR ’23 CORN
$ / BSH
6.7075
6.6225
6.6875
0.04
0.60%
MAY ’23 CORN
$ / BSH
6.7075
6.6275
6.7
0.0475
0.71%
JUL ’23 CORN
$ / BSH
6.6875
6.615
6.675
0.0425
0.64%
MAY ’22 SOYBEANS
$ / BSH
17.2075
16.86
17.005
0.095
0.56%
JUL ’22 SOYBEANS
$ / BSH
17
16.6725
16.815
0.0925
0.55%
AUG ’22 SOYBEANS
$ / BSH
16.53
16.2525
16.365
0.095
0.58%
SEP ’22 SOYBEANS
$ / BSH
15.65
15.3775
15.525
0.1025
0.66%
NOV ’22 SOYBEANS
$ / BSH
15.1275
14.8275
15
0.1
0.67%
JAN ’23 SOYBEANS
$ / BSH
15.005
14.745
14.89
0.08
0.54%
MAR ’23 SOYBEANS
$ / BSH
14.62
14.3875
14.525
0.0825
0.57%
MAY ’23 SOYBEANS
$ / BSH
14.5075
14.37
14.44
0.0975
0.68%
JUL ’23 SOYBEANS
$ / BSH
14.4075
14.31
14.4
0.0875
0.61%
MAY ’22 SOYBEAN OIL
$ / LB
74.5
73.69
74.24
0.53
0.72%
JUL ’22 SOYBEAN OIL
$ / LB
71.96
70.97
71.67
0.6
0.84%
MAY ’22 SOY MEAL
$ / TON
486.8
476.7
479.8
-1.5
-0.31%
JUL ’22 SOY MEAL
$ / TON
478.2
468.7
471.8
-1.4
-0.30%
AUG ’22 SOY MEAL
$ / TON
464.2
455.4
459.9
0.7
0.15%
SEP ’22 SOY MEAL
$ / TON
449.6
440.7
445.8
1.5
0.34%
OCT ’22 SOY MEAL
$ / TON
434.8
426.1
430.6
1
0.23%
MAY ’22 Chicago SRW
$ / BSH
11.6925
11.11
11.565
0.3725
3.33%
JUL ’22 Chicago SRW
$ / BSH
11.3975
10.8625
11.2775
0.3475
3.18%
SEP ’22 Chicago SRW
$ / BSH
10.9675
10.4825
10.84
0.3
2.85%
DEC ’22 Chicago SRW
$ / BSH
10.545
10.0975
10.415
0.2525
2.48%
MAR ’23 Chicago SRW
$ / BSH
10.145
9.83
10.055
0.1725
1.75%
MAY ’22 Kansas City HRW
$ / BSH
11.565
11.085
11.465
0.3325
2.99%
JUL ’22 Kansas City HRW
$ / BSH
11.47
10.9675
11.345
0.3125
2.83%
SEP ’22 Kansas City HRW
$ / BSH
11.25
10.7875
11.155
0.3025
2.79%
DEC ’22 Kansas City HRW
$ / BSH
11.0475
10.71
10.94
0.27
2.53%
MAR ’23 Kansas City HRW
$ / BSH
10.645
10.645
10.645
0.225
2.16%
MAY ’22 MLPS Spring Wheat
$ / BSH
11.23
10.845
11.2025
0.315
2.89%
JUL ’22 MLPS Spring Wheat
$ / BSH
11.1425
10.78
11.1425
0.3175
2.93%
SEP ’22 MLPS Spring Wheat
$ / BSH
10.87
10.5125
10.87
0.3425
3.25%
DEC ’22 MLPS Spring Wheat
$ / BSH
10.825
10.47
10.825
0.3325
3.17%
MAR ’23 MLPS Spring Wheat
$ / BSH
10.63
10.63
10.63
0.205
1.97%
JUN ’21 ICE Dollar Index
$
98.96
98.495
98.665
0.166
0.17%
AP ’21 Light Crude
$ / BBL
115.01
109.3
112.02
-0.1
-0.09%
MA ’21 Light Crude
$ / BBL
113.35
107.1
109.83
-0.14
-0.13%
APR ’22 ULS Diesel
$ /U GAL
3.8809
3.6397
3.8077
0.0068
0.18%
MAY ’22 ULS Diesel
$ /U GAL
3.6135
3.4055
3.5451
0.0101
0.29%
APR ’22 Gasoline
$ /U GAL
3.4237
3.321
3.3697
-0.0019
-0.06%
MAY ’22 Gasoline
$ /U GAL
3.394
3.291
3.3378
-0.0001
0.00%
MAR ’22 Feeder Cattle
$ / CWT
0
#N/A
156.1
0
0.00%
APR ’22 Feeder Cattle
$ / CWT
0
#N/A
161.2
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
140.05
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
136.35
0
0.00%
APR ’22 Live Hogs
$ / CWT
0
#N/A
100.625
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
111.075
0
0.00%
MAR ’22 Class III Milk
$ / CWT
22.4
#N/A
22.4
0
0.00%
APR ’22 Class III Milk
$ / CWT
23.74
23.73
23.73
-0.01
-0.04%
MAY ’22 Class III Milk
$ / CWT
24.6
24.6
24.6
0.06
0.24%
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