Grains surge as markets weigh Russian sanctions. (Comments are updated by 7:30 a.m. Central Time.)
Wheat paves the way for the latest rally on rising concerns over Black Sea supplies
Corn up 16-28 cents
Soybeans up 16-41 cents; Soymeal up $6.90/ton; Soyoil up $2.81/lb
Chicago wheat up 48-52 cents; Kansas City wheat up 49-60 cents; Minneapolis wheat up 28-31 cents
*Prices as of 7:00am CST.
The latest from Ukraine
Russian and Ukrainian officials are meeting today on the Belarusian and Ukrainian border in hopes that an agreement can be made to end the Russian attach on Ukraine. Russian military action on Ukrainian capital Kyiv has paused as the negotiations are underway.
Over the weekend, Ukrainian resistance helped slow Russia’s military advances. Thousands of people are fleeing Ukraine amid the Russian attacks. Russian President Vladimir Putin announced yesterday that the country’s nuclear deterrents were placed on high alert yesterday as Russia braced for more fallout from the West over its “special operation” in Ukraine.
On Friday, the U.S. levied sanctions on two top Russian banks, Sberbank and VTB, cutting them off from access to the dollar but still allowing for energy flows to continue in the larger global economy. Sberbank and VTB are controlled by the Russian government and control around half of Russia’s banking assets.
The U.S. sanctions were echoed with similar measures from other countries in the European Union and the United Kingdom. And while the measures were not severe enough to completely cut off Russia’s access to the global economy, it was enough to trigger an overnight collapse of the Russian ruble. Russia’s central bank shot interest rates up to 20% from 9.5% overnight to help offset the ruble’s collapse amid high inflation in the country.
The U.S., Europe, U.K., and Canada also coordinated together to cut Russia off from the Swift financial messaging system – the banking tool used to facilitate export transactions between countries. The move will likely deter any foreign interest in Russian markets outside of the oil industry until the Ukrainian conflict is resolved.
“It’s absolutely chaotic,” Paul McNamara, an emerging-market fund manager at GAM, told the Wall Street Journal. “The sanctions are having a huge effect.”
Corn
Corn prices rose $0.15-$0.25/bushel overnight as feed shipments slowed to a halt in the Black Sea amid ongoing Russian attacks and international sanctions that rendered Russian shipments useless. New crop prices struggled to hold ground above the $6/bushel benchmark while old crop futures treaded just below the $6.90/bushel benchmark in this morning’s trade.
Russian and Ukrainian ports in the Black Sea will remain closed today. One Russian terminal, Novorossiysk, remains functional. But with mounting international sanctions, it is likely to only ship previously contracted volumes today with little hopes of booking new sales.
“Russia and Ukraine account for about 29% of global wheat exports, 19% of world corn supplies and 80% of world sunflower oil exports,” a Reuters report explained this morning, noting that global buyers are scrambling to find other sources of readily available feed grain and oilseed supplies.
“There are fears the fighting will not be over quickly and that wheat, grain and oilseed export shipments from Ukraine will face disruption for a longer period than initially expected,” one European trader told Reuters. “The impact of sanctions on Russia is also being assessed. Importers will have to switch elsewhere at a time of pretty tight global supplies.”
Soybeans
Nearby soybean futures prices broke past $16/bushel this morning as futures prices rose $0.16-$0.41/bushel on global oilseed supply concerns amid Latin American drought damages and supply restrictions in the Black Sea.
New crop futures prices continued to charge past the $14/bushel benchmark, though its gains were not quite as large as those in the old crop futures complex.
Soyoil prices surged 4% higher as sunflower oil supplies – the fourth largest produced edible oil in the world, with soybeans as the second – remain under lockdown amid ongoing Russian attacks on Ukraine.
Wheat
Wheat prices surged $0.27-$0.60/bushel higher this morning as the fate of Black Sea wheat supplies remained in limbo amidst the Russian-Ukrainian conflict. Global interest in U.S. wheat increased overnight as sanctions levied against Russia limited global wheat availability.
Meanwhile, demand for Russian wheat purchases in the Black Sea waned as international banking sanctions against Russia deter any buyer interest.
“There are almost no sales,” IKAR, a Russian agriculture consultancy, told Reuters. Sovecon noted that demand for Russian wheat “virtually stopped on February 24.”
“Previously-signed contracts are being fulfilled (from the Black Sea),” a Russian trader told Reuters. But no new orders are being booked.
Meanwhile, spring planting progress in Ukraine is expected to begin soon and much uncertainty surrounds 2022 production capacity. “Farmers need to start fieldwork shortly and there is a big question mark over their operation in Ukraine,” Sovecon said.
Weather
Warm weather is returning back to the Heartland after last week’s wintery spell, according to NOAA’s short-range forecasts. Mostly clear skies are forecast across the Midwest today, though the Northern Plains and Upper Midwest could see a chance for a wintery precipitation mix falling late this evening.
Financials
Global equities markets sunk overnight as global investors raced to sell off now value-less Russian assets amid banking sanctions imposed on Russia by the West over the weekend. Nearby Brent crude oil futures rose back above the $100/barrel benchmark this morning as Russian sanctions increase concerns about global supply availability.
Also worth a read on our website, FarmFutures.com
USDA is forecasting record corn and soybean crops in 2022. But record domestic usage rates and high input prices will likely keep prices high in 2022.
Here’s a cheat sheet of what the Russian invasion into Ukraine means for the global economy.
Bill Biedermann breaks down what the impacts to grain markets will be as war continues in Eastern Europe.
Jacqui Fatka highlights trade factors from USDA’s Agricultural Outlook Forum last week.
Morning Ag Commodity Prices – 2/28/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAR ’22 CORN
$ / BSH
6.9425
6.79
6.82
0.225
3.41%
MAY ’22 CORN
$ / BSH
6.885
6.735
6.7825
0.225
3.43%
JUL ’22 CORN
$ / BSH
6.75
6.6025
6.6625
0.2225
3.45%
SEP ’22 CORN
$ / BSH
6.2125
6.045
6.1325
0.19
3.20%
DEC ’22 CORN
$ / BSH
6.0425
5.855
5.9525
0.155
2.67%
MAR ’23 CORN
$ / BSH
6.105
5.92
6.025
0.1575
2.68%
MAY ’23 CORN
$ / BSH
6.135
5.955
6.05
0.15
2.54%
MAR ’22 SOYBEANS
$ / BSH
16.52
16.2725
16.3075
0.405
2.55%
MAY ’22 SOYBEANS
$ / BSH
16.4625
16.145
16.2025
0.3575
2.26%
JUL ’22 SOYBEANS
$ / BSH
16.315
16.025
16.0725
0.34
2.16%
AUG ’22 SOYBEANS
$ / BSH
15.8425
15.5175
15.6625
0.3
1.95%
SEP ’22 SOYBEANS
$ / BSH
15
14.7925
14.8175
0.2375
1.63%
NOV ’22 SOYBEANS
$ / BSH
14.565
14.3025
14.3475
0.1975
1.40%
JAN ’23 SOYBEANS
$ / BSH
14.485
14.2125
14.335
0.2
1.41%
MAR ’23 SOYBEANS
$ / BSH
14.1625
14.0075
14.0475
0.16
1.15%
MAY ’23 SOYBEANS
$ / BSH
14.14
13.955
14.075
0.255
1.85%
MAR ’22 SOYBEAN OIL
$ / LB
71.68
71.37
71.56
2.81
4.09%
MAY ’22 SOYBEAN OIL
$ / LB
72.14
70.83
71.38
2.45
3.55%
MAR ’22 SOY MEAL
$ / TON
460.5
451.9
456.7
8.4
1.87%
MAY ’22 SOY MEAL
$ / TON
452.6
445
447.7
5
1.13%
JUL ’22 SOY MEAL
$ / TON
448.2
441.2
443.6
4.9
1.12%
AUG ’22 SOY MEAL
$ / TON
436.3
430.2
432.6
5.3
1.24%
SEP ’22 SOY MEAL
$ / TON
422.3
417.6
419
4.3
1.04%
MAR ’22 Chicago SRW
$ / BSH
9.2025
8.945
8.945
0.515
6.11%
MAY ’22 Chicago SRW
$ / BSH
9.3475
8.9475
9.0325
0.435
5.06%
JUL ’22 Chicago SRW
$ / BSH
9.245
8.805
8.8975
0.3975
4.68%
SEP ’22 Chicago SRW
$ / BSH
9.1225
8.7
8.78
0.39
4.65%
DEC ’22 Chicago SRW
$ / BSH
9.09
8.625
8.7175
0.365
4.37%
MAR ’22 Kansas City HRW
$ / BSH
9.6375
9.16
9.465
0.5975
6.74%
MAY ’22 Kansas City HRW
$ / BSH
9.66
9.2
9.32
0.41
4.60%
JUL ’22 Kansas City HRW
$ / BSH
9.5425
9.1075
9.22
0.4075
4.62%
SEP ’22 Kansas City HRW
$ / BSH
9.4
9.04
9.165
0.385
4.38%
DEC ’22 Kansas City HRW
$ / BSH
9.33
8.9975
9.1375
0.36
4.10%
MAR ’22 MLPS Spring Wheat
$ / BSH
9.915
9.8275
9.8275
0.305
3.20%
MAY ’22 MLPS Spring Wheat
$ / BSH
10.1775
9.85
9.8775
0.275
2.86%
JUL ’22 MLPS Spring Wheat
$ / BSH
10.0975
9.7675
9.7875
0.2425
2.54%
SEP ’22 MLPS Spring Wheat
$ / BSH
9.7
9.4075
9.455
0.2375
2.58%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.7
9.42
9.5
0.28
3.04%
MAR ’21 ICE Dollar Index
$
97.4
96.75
96.94
0.321
0.33%
AP ’21 Light Crude
$ / BBL
99.1
94.82
95.68
4.09
4.47%
MA ’21 Light Crude
$ / BBL
96.92
92.87
93.67
3.78
4.21%
MAR ’22 ULS Diesel
$ /U GAL
2.973
2.9625
2.9625
0.113
3.97%
APR ’22 ULS Diesel
$ /U GAL
2.9811
2.8505
2.9125
0.1067
3.80%
MAR ’22 Gasoline
$ /U GAL
2.8359
2.7317
2.8359
0.1086
3.98%
APR ’22 Gasoline
$ /U GAL
3.026
2.9015
2.9622
0.0881
3.07%
MAR ’22 Feeder Cattle
$ / CWT
0
#N/A
160.025
0
0.00%
APR ’22 Feeder Cattle
$ / CWT
0
#N/A
164.75
0
0.00%
FE ’21 Live Cattle
$ / CWT
0
#N/A
139.275
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
141.925
0
0.00%
APR ’22 Live Hogs
$ / CWT
0
#N/A
103.675
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
107.825
0
0.00%
FEB ’22 Class III Milk
$ / CWT
20.91
#N/A
20.92
0
0.00%
MAR ’22 Class III Milk
$ / CWT
21.99
21.9
21.9
0
0.00%
APR ’22 Class III Milk
$ / CWT
22.48
#N/A
22.48
0
0.00%
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