Morning report: Wheat mixed in overnight trade. Plus – input prices stabilize ahead of planting season. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 1-2 cents
Soybeans down 1-5 cents; Soymeal up $2.60/ton; Soyoil down $0.37/lb
Chicago wheat up 3-4 cents; Kansas City wheat up 1-2 cents; Minneapolis wheat down 1-3 cents
*Prices as of 6:50am CDT.
Inputs (U.S.)
Illinois’s bi-weekly production cost estimates were updated yesterday. In the midst of soaring fertilizer prices and planting season about to ramp up, input prices were amazingly unmoved.
Prices for anhydrous ammonia, urea, DAP, and MAP were unchanged from two weeks ago, suggesting that growers have largely locked in pricing on these inputs and/or applied these fertilizers last fall, easing demand pressure on the fertilizer complex just as spring planting activity begins to intensify in the Corn Belt.
UAN and potash prices both eased lower. Diesel prices also held steady at $4.40/gallon, stabilizing after surging $1.06/gallon higher in the previous report. Diesel prices are now 1.8 times higher than year ago pricing.
These dynamics are consistent with findings from the March 2022 Farm Futures survey, which suggests that farmers locked in on acreage decisions back in December 2021 and are largely unmoved by recent price swings exacerbated by the Black Sea war. It indicates that farmers are going to be more responsive to changes in input pricing in 2022 than grain prices.
The inflationary pressures have also cooled farmer demand for equipment ahead of spring planting, changing suppliers’ strategies for catering to farm-level demand. Supply chain issues are further complicating manufacturers’ production schedules and forcing both retailers and farmers alike to find alternative options for parts and equipment this spring.
“Our order books across all of our businesses are mostly full for the year, except in a few cases where we paused orders to allow for more dynamic pricing,” Deere & Co. CEO John May told Reuters.
“With high inflation, we’re being careful how far out we go,” CNH Industrial CEO Scott Wine said. “If [input] prices rise too much, we’re not going to sell something and lose margin.”
Equipment dealers are facing squeezed profit margins as sales slow and wholesale prices rise faster than retailers can keep up. Availability remains a critical issue and the combination of these problems could slow farmer interest in purchasing new machinery this year, especially if crop prices fall.
2022 Acreage estimates
Did you miss our March 2022 Farm Futures survey release yesterday? No problem! Here are the highlights:
Of the 973 farmers participating in the survey, conducted via email from February 28 – March 17, 62% expect profits will be lower in 2022 than in 2021. Of those respondents, 95% cited higher input costs as the primary reason for lower 2022 profits.
2022 corn acreage: 90.4M ac. (down 3M ac. from 2021)
2022 soybean acreage: 92.2M ac. (up 5M ac. from 2021)
Third time in U.S. history more soybeans will be planted than corn.
Corn and soybean acreage estimates were unchanged from the FF January 2022 survey, suggesting that high prices drove most U.S. farmers to lock in acreage plans before the Black Sea conflict’s onset.
2022 wheat acreage: 47.6M ac. (34.4M ac. winter wheat, 11.7M ac. spring wheat, 1.5M ac. durum)
Spring wheat and durum acreage expansion to be limited by drought and input costs.
Largest total wheat acreage since 2018.
Corn faces the most potential for price appreciation, while wheat and soybean price outcomes will depend on global export market dynamics.
Corn/Soy/Wheat acreage: 230.2M ac. (5th largest combined acreage, largest since 2014)
Acres gained from lower corn acres, winter wheat-soybean double crop rotations, lower rice acreage, limited spring wheat and cotton expansion, and a smaller U.S. cattle herd.
2022 sorghum acreage: 7.5M ac. (up 200K ac. from 2021)
2022 cotton acreage: 11.9M ac. (6% annual increase, but lower than USDA forecast on high input costs)
2022 rice acreage: 2.1M ac. (down 450K ac. on competition from other row crops)
Persistent drought in the U.S. Plains and Upper Midwest could reduce the chances of attaining trendline yields in 2022, which could create further pricing opportunities for U.S. growers.
Corn
Losses in the energy complex overnight dragged U.S. corn prices $0.01-$0.02/bushel lower this morning. A lackluster export report yesterday from USDA also took much of the steam out of corn’s sails, continuing yesterday’s losses overnight.
Soybeans
Nearby soybean contracts dipped below the $17/bushel benchmark overnight on lower energy prices and a less-than-ideal weekly export report released yesterday morning. Futures prices in Chicago edged $0.01-$0.05/bushel lower on the overarching sentiments.
However, South American crop shortfalls and lower projected Ukrainian sunflower oil forecasts help cap the losses. The soybean complex is still projected to end the week higher thanks to those factors, despite yesterday’s and overnight losses for soybean futures.
Wheat
Wheat futures were mixed at last glance, with markets calming ahead of next week’s USDA Prospective Plantings report and taking a breath from the Black Sea conflict fallout. The wheat complex is also slated to end the week higher for the first time in three weeks as trade flows realign and markets readjust expectations to consider a prolonged Russian war in Ukraine.
Weather
A chance of a wintery precipitation mix will linger over the Great Lakes and Eastern Corn Belt regions today, according to NOAA’s short-range forecasts. The system will slowly move east into the New England by Sunday afternoon, paving the way for clear skies across much of the U.S. Heartland for the weekend.
Drought conditions eased a little from last week’s report thanks to cross-country moisture systems across the High Plains and Midwest. But dry and drought conditions remain elevated, with 71.88% of U.S. land still residing in some sort of abnormally dry to exceptional drought condition as of this past Tuesday.
There is reason to be optimistic, however. Yesterday’s drought readings were slightly higher than year ago totals, which came in at 64.21% a year ago. But severe drought classifications were significantly higher a year ago than current conditions.
Moisture concerns are still paramount for growers as planting season begins to heat up. But even with La Nina weather patterns likely to batter the U.S. Plains for the foreseeable future, this week and last week’s cross-country precipitation systems could have provided enough moisture to help spring planting season start off on the right foot.
Financials
S&P 500 futures rose 15.25 points overnight (0.34%) to $4,527.75 at last glance with help from losses in the energy complex. The market continues to reward the Federal Reserve for announcing a raise in interest rates last week, a move which is bullish for equities but less beneficial for fixed income assets.
The market continues to assess the ongoing war in Ukraine. The U.S. State Department is growing increasingly concerned that Russian President Vladimir Putin will use chemical, biological, or nuclear weapons in Ukraine, as Russia’s invasion takes longer than Russian officials had expected and has featured Russian forces turning on Ukrainian civilians in brutal and inhumane ways.
Also worth a read on our website, FarmFutures.com:
Check out our 2022 acreage projections from our March 2022 Farm Futures survey!
Naomi Blohm weighs the pros and cons of selling old crop corn supplies now versus waiting for a summer rally.
AgMarket.Net’s Betsy Jibben shares updates on planting intentions from Ukrainian farmers and agricultural companies.
In the wake of soaring commodity prices, Brazil will temporarily lift its ethanol export tariff. And the U.S. will also increase ethanol blending to combat high gas prices.
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.
Morning Ag Commodity Prices – 3/25/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAY ’22 CORN
$ / BSH
7.4975
7.425
7.4775
-0.005
-0.07%
JUL ’22 CORN
$ / BSH
7.2975
7.235
7.28
-0.005
-0.07%
SEP ’22 CORN
$ / BSH
6.835
6.78
6.8125
-0.0125
-0.18%
DEC ’22 CORN
$ / BSH
6.6775
6.6225
6.6525
-0.0225
-0.34%
MAR ’23 CORN
$ / BSH
6.6825
6.63
6.66
-0.0225
-0.34%
MAY ’23 CORN
$ / BSH
6.6875
6.6425
6.6575
-0.03
-0.45%
JUL ’23 CORN
$ / BSH
6.6575
6.61
6.6325
-0.0275
-0.41%
MAY ’22 SOYBEANS
$ / BSH
17.1
16.8475
16.955
-0.0525
-0.31%
JUL ’22 SOYBEANS
$ / BSH
16.9175
16.6675
16.7725
-0.05
-0.30%
AUG ’22 SOYBEANS
$ / BSH
16.4375
16.255
16.345
-0.0125
-0.08%
SEP ’22 SOYBEANS
$ / BSH
15.5375
15.415
15.47
-0.02
-0.13%
NOV ’22 SOYBEANS
$ / BSH
14.99
14.825
14.8975
-0.0325
-0.22%
JAN ’23 SOYBEANS
$ / BSH
14.8925
14.7675
14.8175
-0.0275
-0.19%
MAR ’23 SOYBEANS
$ / BSH
14.53
14.4225
14.4775
-0.0075
-0.05%
MAY ’23 SOYBEANS
$ / BSH
14.4375
14.34
14.365
-0.0325
-0.23%
JUL ’23 SOYBEANS
$ / BSH
14.405
14.3625
14.3625
-0.0075
-0.05%
MAY ’22 SOYBEAN OIL
$ / LB
74.79
73.06
74.04
-0.25
-0.34%
JUL ’22 SOYBEAN OIL
$ / LB
72.53
71.01
71.9
-0.21
-0.29%
MAY ’22 SOY MEAL
$ / TON
489.4
484.5
488.2
2.3
0.47%
JUL ’22 SOY MEAL
$ / TON
480
475.5
479
1.8
0.38%
AUG ’22 SOY MEAL
$ / TON
463.7
460.2
463.3
1
0.22%
SEP ’22 SOY MEAL
$ / TON
447.6
443.4
446.4
0.3
0.07%
OCT ’22 SOY MEAL
$ / TON
432.8
429.1
429.1
-2.6
-0.60%
MAY ’22 Chicago SRW
$ / BSH
10.965
10.6475
10.835
-0.0225
-0.21%
JUL ’22 Chicago SRW
$ / BSH
10.8675
10.555
10.73
-0.015
-0.14%
SEP ’22 Chicago SRW
$ / BSH
10.6
10.3
10.4725
-0.02
-0.19%
DEC ’22 Chicago SRW
$ / BSH
10.3225
10.03
10.1975
-0.0075
-0.07%
MAR ’23 Chicago SRW
$ / BSH
9.95
9.72
9.905
0.025
0.25%
MAY ’22 Kansas City HRW
$ / BSH
11.04
10.7425
10.9225
-0.0275
-0.25%
JUL ’22 Kansas City HRW
$ / BSH
10.9925
10.6975
10.875
-0.0275
-0.25%
SEP ’22 Kansas City HRW
$ / BSH
10.8225
10.5825
10.7125
-0.05
-0.46%
DEC ’22 Kansas City HRW
$ / BSH
10.7175
10.4725
10.615
-0.0075
-0.07%
MAR ’23 Kansas City HRW
$ / BSH
10.4675
#N/A
10.385
0
0.00%
MAY ’22 MLPS Spring Wheat
$ / BSH
10.9325
10.7125
10.78
-0.0475
-0.44%
JUL ’22 MLPS Spring Wheat
$ / BSH
10.9025
10.72
10.77
-0.0225
-0.21%
SEP ’22 MLPS Spring Wheat
$ / BSH
10.69
10.555
10.58
-0.0125
-0.12%
DEC ’22 MLPS Spring Wheat
$ / BSH
10.67
10.55
10.6025
0.0225
0.21%
MAR ’23 MLPS Spring Wheat
$ / BSH
10.5225
10.5125
10.5225
0.0175
0.17%
JUN ’21 ICE Dollar Index
$
98.765
98.42
98.615
-0.185
-0.19%
MA ’21 Light Crude
$ / BBL
112.79
109.14
110.3
-2.04
-1.82%
JU ’21 Light Crude
$ / BBL
109.91
106.2
107.37
-2.06
-1.88%
APR ’22 ULS Diesel
$ /U GAL
4.2
4.0553
4.1096
-0.0438
-1.05%
MAY ’22 ULS Diesel
$ /U GAL
3.8446
3.6911
3.7514
-0.0516
-1.36%
APR ’22 Gasoline
$ /U GAL
3.4126
3.311
3.3667
-0.023
-0.68%
MAY ’22 Gasoline
$ /U GAL
3.3903
3.285
3.3414
-0.0275
-0.82%
MAR ’22 Feeder Cattle
$ / CWT
0
#N/A
156.775
0
0.00%
APR ’22 Feeder Cattle
$ / CWT
0
#N/A
162.725
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
139.675
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
136.95
0
0.00%
APR ’22 Live Hogs
$ / CWT
0
#N/A
102.775
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
114.125
0
0.00%
MAR ’22 Class III Milk
$ / CWT
22.42
22.42
22.42
0
0.00%
APR ’22 Class III Milk
$ / CWT
24.28
23.96
24.28
-0.22
-0.90%
MAY ’22 Class III Milk
$ / CWT
25.08
25
25.08
-0.19
-0.75%
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