Soy reverses losses on further drought concerns. (Comments are updated by 7:30 a.m. Central Time.)
Grains move higher following yesterday’s selloff, boosted in part by easing Russian tensions
Corn up 1-2 cents
Soybeans up 5-12 cents; Soymeal up $4.50/ton; Soyoil up $0.51/lb
Chicago wheat up 2-3 cents; Kansas City wheat up 1-2 cents; Minneapolis wheat up 2-3 cents
*Prices as of 7:00am CST.
Corn
Corn prices rose $0.01-$0.02/bushel overnight on concerns about crop development in South America as dry weather conditions continue to plague the region and inflict further harm to soybean crops.
Old crop prices held steady near the $6.40/bushel benchmark as markets also breathed a sigh of relief that tensions between Russia and the West over Ukraine are beginning to ease.
Soybeans
Prices in the soy complex soared this morning as renewed weather concerns in South America triggered concerns of further crop losses than the combined 669 million bushels that have already been lost from looming harvests in Brazil, Argentina, and Paraguay over the last two months.
One Brazilian ag consultancy dropped its 2021/22 harvest forecast to 4.62 billion bushels, well below USDA’s current estimate of 4.92 billion bushels. Chicago soybean futures rose $0.05-$0.12/bushel on the prospect.
“The weather situation will need to be followed closely and harvest forecasts could be revised down further,” a European trader told Reuters of South American crops. The morning’s gains were limited by potential showers in southern Brazil and Argentina next week, though any precipitation will likely be too little too late.
China’s state news outlet, Xinhua, reported overnight that Chinese agriculture officials anticipate that China could slash another 1.10 billion bushels worth of soybean imports from its forecasts as the government continues to promote lower soybean meal usage in livestock rations in favor of cheaper alternative proteins.
The government continues to promote low-protein feed rations to protect its livestock and soymeal producers from unfavorable crush margins amid soaring global soybean prices. China will also be offering farmers lucrative incentives to encourage more domestic soybean production this year after Chinese growers doubled down on corn last year.
Much of the market chatter surrounding the ongoing drought in South America has focused on crop losses in Brazil and Argentina. But the La Nina-induced drought has also taken a significant toll on neighboring Paraguay as well.
Paraguay is not as large of a soybean producer as the even Argentina, but it does add shipments to the global export market. This year, Paraguay was originally forecast to harvest 367 million bushels of soybeans. But over the last two months, production estimates have dropped a staggering 136 million bushels (37%) as drought has ravaged its crop.
In a recent Reuters report, the Paraguayan Chamber of Oilseed and Cereal Processors (Cappro) estimates that total soybean losses of this year’s crop could fall 60% lower from last year’s harvest of 367 million bushels. This will likely cause shortages in the country as the chamber estimates that 60%-70% of crush plants will have to idle in the second half of this year after soybean supplies run dry.
“This figure could worsen, depending on rainfall in the coming months,” the chamber told Reuters. “Given this situation, it is expected that firms will hardly be able to continue processing soybeans during the second half of the year.”
Soaring soybean prices and rapid buying paces from China mean that few local alternatives will likely be available for crush facilities in Paraguay to affordably purchase and keep operating. But Paraguay may be forced to import soybeans for the first time in its history and scale back the import and tax laws that render soybean imports economically unviable.
Late February rains are forecast in Argentina, with increased odds of La Nina conditions somewhat easing by late March or early April. But it could be too little too late for Argentine soybean and corn crops.
“The situation in very complicated and the truth is that this 10-day period without rain that they’re talking about is going to be critical,” Cristian Russo, head agronomist at the Rosario Grains Exchange (BCR), told Reuters. “There’s a lot of anxiety, a lot of worrying.”
The Rosario Grains Exchange predicts that soy losses this year will likely mirror the catastrophic shortfalls of the 2017/18 growing season. So far, the Exchange predicts 2021/22 soybean harvests will total 1.49 billion bushels. The 2017/18 haul was a meager 1.29 billion bushels.
The next two weeks will be critical for crop development in Argentina’s Pampas Grain Belt. And while the forecast rains could add to depleted soil moisture levels, the showers will need to accumulate significantly more rain than forecast to stop the losses that the Argentine crops have already suffered.
Wheat
Wheat prices edged $0.01-$0.03/bushel higher this morning as bargain buyers swooped in following yesterday’s selloff. Markets continue to approach the Russian situation at the Ukrainian border with caution, waiting for more concrete news that Putin will pull back troops from the border and de-escalate plans to invade its neighboring country.
Weather
Spring temperatures are on the way for much of the Heartland today, according to NOAA’s short-range forecasts. With the warmer conditions, a cross-country winter weather system developing in the Central Rockies this morning will likely turn from snow into rain as it moves across the Western Plains and stretches from East Texas to Michigan through tomorrow.
The system will drop approximately an inch of rain, though regions on the upper band of the system could see some light snowfall. The system will shift into the Eastern Corn Belt by Friday.
Financials
Markets are hesitant to believe that Russia’s scaled back rhetoric of a Ukrainian invasion is true this morning, sending S&P 500 futures falling 12.5 points (0.28%) to $4,452 at last glance.
Results from yesterday’s Producer Price Index (PPI) report signaled inflationary pressures are gripping manufacturers, fueling inflationary concerns in the marketplace and adding to the morning’s losses. More inflationary pressures will be evaluated in data releases today for retail and auto sales as well as corporate earnings.
Also worth a read on our website, FarmFutures.com:
U.S. Trade Representative Katherine Tai shared trade updates on Mexico and Phase 1 during yesterday’s U.S. Grains Council annual meeting.
Iowa State economist Bobby Martens has some fresh insights about how to strengthen resiliency in the supply chain.
Advance Trading’s Brian Basting breaks down a single day in the soybean futures market to show how price prediction is a less effective marketing tool than using risk strategies.
Wholesale urea prices continue to slide. But high fuel costs could offset any potential price savings, warns Bryce Knorr.
Drone swarms, spot spraying technology – weed control is in a new era, writes Ben Potter.
Morning Ag Commodity Prices – 2/16/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAR ’22 CORN
$ / BSH
6.4325
6.3625
6.4125
0.0325
0.51%
MAY ’22 CORN
$ / BSH
6.425
6.3575
6.405
0.03
0.47%
JUL ’22 CORN
$ / BSH
6.385
6.3175
6.365
0.0275
0.43%
SEP ’22 CORN
$ / BSH
6.0325
5.9725
6.015
0.01
0.17%
DEC ’22 CORN
$ / BSH
5.9175
5.8575
5.9025
0.005
0.08%
MAR ’23 CORN
$ / BSH
5.98
5.93
5.97
0.005
0.08%
MAY ’23 CORN
$ / BSH
6.0175
5.965
6.0125
0.0125
0.21%
MAR ’22 SOYBEANS
$ / BSH
15.7175
15.47
15.645
0.1325
0.85%
MAY ’22 SOYBEANS
$ / BSH
15.7475
15.515
15.675
0.1175
0.76%
JUL ’22 SOYBEANS
$ / BSH
15.7425
15.505
15.675
0.1225
0.79%
AUG ’22 SOYBEANS
$ / BSH
15.4
15.215
15.3525
0.1125
0.74%
SEP ’22 SOYBEANS
$ / BSH
14.795
14.5825
14.775
0.1325
0.90%
NOV ’22 SOYBEANS
$ / BSH
14.4525
14.255
14.3825
0.0625
0.44%
JAN ’23 SOYBEANS
$ / BSH
14.4275
14.2475
14.3675
0.0625
0.44%
MAR ’23 SOYBEANS
$ / BSH
14.1775
14.0125
14.125
0.0575
0.41%
MAY ’23 SOYBEANS
$ / BSH
14.0375
14.0125
14.0325
0.0525
0.38%
MAR ’22 SOYBEAN OIL
$ / LB
66.5
65.42
66.22
0.59
0.90%
MAY ’22 SOYBEAN OIL
$ / LB
66.57
65.48
66.28
0.56
0.85%
MAR ’22 SOY MEAL
$ / TON
446.5
438.1
443.3
4.5
1.03%
MAY ’22 SOY MEAL
$ / TON
443.9
435.8
440.6
3.5
0.80%
JUL ’22 SOY MEAL
$ / TON
442.7
435.5
439.6
3
0.69%
AUG ’22 SOY MEAL
$ / TON
434.4
427.6
431.3
2.6
0.61%
SEP ’22 SOY MEAL
$ / TON
422.4
418.6
422.2
3.2
0.76%
MAR ’22 Chicago SRW
$ / BSH
7.8675
7.7725
7.835
0.0375
0.48%
MAY ’22 Chicago SRW
$ / BSH
7.93
7.8375
7.8925
0.035
0.45%
JUL ’22 Chicago SRW
$ / BSH
7.89
7.8
7.855
0.035
0.45%
SEP ’22 Chicago SRW
$ / BSH
7.9
7.8175
7.8725
0.0375
0.48%
DEC ’22 Chicago SRW
$ / BSH
7.935
7.8625
7.905
0.035
0.44%
MAR ’22 Kansas City HRW
$ / BSH
8.1325
8.0275
8.085
0.025
0.31%
MAY ’22 Kansas City HRW
$ / BSH
8.1675
8.065
8.115
0.0175
0.22%
JUL ’22 Kansas City HRW
$ / BSH
8.1675
8.065
8.12
0.015
0.19%
SEP ’22 Kansas City HRW
$ / BSH
8.195
8.1125
8.16
0.01
0.12%
DEC ’22 Kansas City HRW
$ / BSH
8.295
8.195
8.23
0.0025
0.03%
MAR ’22 MLPS Spring Wheat
$ / BSH
9.57
9.4725
9.555
0.025
0.26%
MAY ’22 MLPS Spring Wheat
$ / BSH
9.5475
9.445
9.525
0.02
0.21%
JUL ’22 MLPS Spring Wheat
$ / BSH
9.4625
9.385
9.4625
0.025
0.26%
SEP ’22 MLPS Spring Wheat
$ / BSH
9.1725
9.1175
9.1475
0.0075
0.08%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.09
9.09
9.09
-0.0025
-0.03%
MAR ’21 ICE Dollar Index
$
96.055
95.76
95.885
-0.108
-0.11%
MA ’21 Light Crude
$ / BBL
93.51
91.63
93.47
1.4
1.52%
AP ’21 Light Crude
$ / BBL
91.65
89.7
91.65
1.44
1.60%
MAR ’22 ULS Diesel
$ /U GAL
2.899
2.8532
2.8872
0.0277
0.97%
APR ’22 ULS Diesel
$ /U GAL
2.8002
2.7547
2.7942
0.0299
1.08%
MAR ’22 Gasoline
$ /U GAL
2.7019
2.658
2.696
0.0269
1.01%
APR ’22 Gasoline
$ /U GAL
2.8428
2.7977
2.8428
0.0333
1.19%
MAR ’22 Feeder Cattle
$ / CWT
0
#N/A
168.725
0
0.00%
APR ’22 Feeder Cattle
$ / CWT
0
#N/A
172.55
0
0.00%
FE ’21 Live Cattle
$ / CWT
0
#N/A
142.9
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
146.9
0
0.00%
APR ’22 Live Hogs
$ / CWT
0
#N/A
104.15
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
108
0
0.00%
FEB ’22 Class III Milk
$ / CWT
20.79
20.79
20.79
-0.01
-0.05%
MAR ’22 Class III Milk
$ / CWT
22.93
22.71
22.89
-0.08
-0.35%
APR ’22 Class III Milk
$ / CWT
22.9
22.9
22.9
-0.31
-1.34%
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
