Wheat notches another day of strong gains as Black Sea supplies remain in limbo. (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 17-30 cents
Soybeans up 37-55 cents; Soymeal up $9.40/ton; Soyoil up $2.88/lb
Chicago wheat up 44-50 cents; Kansas City wheat up 29-49 cents; Minneapolis wheat up 24-25 cents
*Prices as of 6:50am CST.
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The latest from Ukraine
Yesterday’s negotiations between Ukraine and Russia were reportedly a step forward, according to Ukrainian officials. But in the short run, the talks appeared to have minimal results.
Russian forces continued their assault on Ukraine amidst the talks. Ukrainian civilians have largely thwarted advances from the Russian military through guerrilla warfare tactics. But Russian forces are growing increasingly frustrated at the slow progress and are stepping up assaults on key residential areas of Ukraine today, with large explosions reported from the center of Kharkiv, Ukraine’s second largest city.
A miles-long convoy of Russian forces is creeping towards the Ukrainian capital of Kyiv today. More peace talks are planned in the coming days between Russia and Ukraine – this time at the Polish border – and will hopefully yield more results before more chaos ensues.
Despite its initial plans when the invasion began late last week, Russian forces have yet to capture a single Ukrainian city. The growing frustration will likely lead to more destruction and death for Ukrainians at the hands of the Russians in the coming days.
Meanwhile in Russia, yesterday’s ruble collapse sent thousands of Russian citizens scrambling to ATMs and banks across the country to withdraw cash reserves. The ruble took a 20% beating since Sunday and stock market activity has largely been shut down amid crashing stock values following more severe sanctions from the West that could potentially limit foreign investment in Russia if this military conflict continues.
Wars are a marathon, not a sprint. Even though early progress favors Ukraine and the West, military expert Michael Kofman, who consults at a D.C.-based military think tank, warns of darker days ahead. Russia “got a bloody nose in the early days of the war,” Kofman told the New York Times overnight.
“However, we are only at the beginning of this war, and much of the euphoric optimism about the way the first 96 hours have gone belies the situation on the ground and the reality that the worst may yet be to come.”
Corn
Corn prices surged $0.15-$0.29/bushel higher overnight aided in part by rising energy costs and growing concerns about spring planting progress in Ukraine.
Ukraine is the world’s fourth largest corn exporter, accounting for 16% of global exports. Its growing season mirrors that of the U.S., though the rising military conflicts with Russian troops may slow planting progress in the coming weeks.
While it is not yet clear how the impacts of a war with Russia will influence Ukrainian planting decisions, Ukraine and the U.S. are currently the only two global corn suppliers available as South American crops await harvest.
As Reuters agricultural columnist Karen Braun points out, Ukraine’s corn supplies were already tight going into the Russian conflict. Further military action in Ukraine could limit 2022 supplies as well, Braun writes in a recent column (which I highly recommend reading).
New crop corn prices are racing to buy back acreage from soybeans in the U.S. as a result, which could convince the few farmers remaining with uncertain 2022 acreage plans to plant corn, even though input costs are two to three times last year’s expenses.
Soybeans
Soybean prices followed gains in the wheat and corn market $0.41-$0.56/bushel higher overnight. Price support came from tight edible oil supplies around the globe, but also from ongoing concerns about crop shortfalls in Brazil, Argentina, and Paraguay.
Soyoil prices soared 4% higher again today as restricted sunflower oil shipments out of Ukraine further tighten already shrinking stocks of global edible oils.
USDA releases data on January 2022 soybean crush volumes this morning. After National Oilseed Processors Association (NOPA) data pointed to a smaller than expected January 2022 crush, today’s figures from USDA are likely to fall short of what is typically among the largest monthly soy crush volumes.
High commodity prices likely limited further crush volumes as shrinking crop estimates following South American drought damage have further tightened global soybean supplies. Pre-report trade estimates for today’s USDA figures peg the January 2022 crush between 193.0 million – 194.3 million bushels, with an average trade guess of 193.7 million bushels.
If realized, today’s volume would be a 2.3% decrease from December 2021 volumes, which set a new record high for monthly crush rates at 198.2 million bushels. Additionally, the figure trails the all-time January high of 196.5 million bushels set in 2021 by 1.4%.
The lower January estimates suggest that processors may be more price sensitive to purchasing soybean volumes at these elevated prices. It is likely a sure sign of demand rationing in the domestic soybean sector and could signal a scale back in production in the coming weeks, especially as commodity prices surged amidst the ongoing Russian-Ukrainian conflict.
Wheat
Chicago wheat futures flirted with a 14-year high this morning as trade flows in the Black Sea wheat market ground to a halt. Spring wheat prices also pushed higher this morning as the market remains concerned with Russian spring wheat planting activity, though those concerns were not quite as severe as those of the winter wheat varieties.
Global markets are trying to reconfigure wheat trade flows as the Black Sea remains shuttered. About 30% of global wheat exports are sourced from the Black Sea region.
“The war in Ukraine is causing a total halt to shipments in Ukrainian ports, and only a few shipments in Russian ports are noted in a context of navigation that has become very dangerous in the entire Black Sea basin,” consultancy Agritel said.
India, who typically does not export wheat, is likely to come out as the winner in this debacle. A robust wheat crop last year on the heels of four prior years of consecutive bumper crops has left Indian farmers with a wheat surplus available to export. India’s exportable wheat supplies are double the size from last year.
And as shipments from the Black Sea remain stalled amid the ongoing military conflict and economic sanctions, Indian wheat could provide a low-cost option to Asian buyers who typically rely on Black Sea grain shipments. While traditional buyers from Southeast Asia are likely to accelerate purchases, Indian wheat will likely also attract new customers from the Middle East as the conflict continues.
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 could see a chance for a wintery precipitation mix falling late this evening.
Financials
S&P 500 futures continued another day of losses, falling 10.71 points (0.24%) to $4,373.94 as the Russian-Ukrainian conflict continues. West Texas Intermediate oil futures inched past the $100/barrel benchmark this morning as Russian sanctions from the conflict continues to cast doubt on global energy availability.
Also worth a read on our website, FarmFutures.com
Bryce Knorr points out that marketers should be focused on more than just Ukraine this spring, as history suggests more rallies may be on the way in the grain markets.
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.
Morning Ag Commodity Prices – 3/1/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAR ’22 CORN
$ / BSH
7.2775
6.9975
7.2625
0.2875
4.12%
MAY ’22 CORN
$ / BSH
7.2125
6.9275
7.185
0.2775
4.02%
JUL ’22 CORN
$ / BSH
7.04
6.7725
7.0175
0.2475
3.66%
SEP ’22 CORN
$ / BSH
6.41
6.2
6.3875
0.165
2.65%
DEC ’22 CORN
$ / BSH
6.2575
6.0425
6.23
0.1575
2.59%
MAR ’23 CORN
$ / BSH
6.3
6.0975
6.275
0.1525
2.49%
MAY ’23 CORN
$ / BSH
6.3225
6.125
6.3
0.15
2.44%
MAR ’22 SOYBEANS
$ / BSH
16.99
16.4825
16.985
0.5425
3.30%
MAY ’22 SOYBEANS
$ / BSH
16.88
16.415
16.855
0.4875
2.98%
JUL ’22 SOYBEANS
$ / BSH
16.6375
16.21
16.6175
0.4525
2.80%
AUG ’22 SOYBEANS
$ / BSH
16.17
15.7975
16.1575
0.4275
2.72%
SEP ’22 SOYBEANS
$ / BSH
15.3175
14.95
15.2925
0.4225
2.84%
NOV ’22 SOYBEANS
$ / BSH
14.7875
14.39
14.7775
0.42
2.93%
JAN ’23 SOYBEANS
$ / BSH
14.78
14.3525
14.765
0.4275
2.98%
MAR ’23 SOYBEANS
$ / BSH
14.5275
14.175
14.51
0.41
2.91%
MAY ’23 SOYBEANS
$ / BSH
14.42
14.165
14.415
0.395
2.82%
MAR ’22 SOYBEAN OIL
$ / LB
75.77
73.72
75.77
2.88
3.95%
MAY ’22 SOYBEAN OIL
$ / LB
76
72.7
75.78
3.26
4.50%
MAR ’22 SOY MEAL
$ / TON
464
457.4
464
9.1
2.00%
MAY ’22 SOY MEAL
$ / TON
455.7
448
455
8.7
1.95%
JUL ’22 SOY MEAL
$ / TON
451.5
444.1
450.8
8.3
1.88%
AUG ’22 SOY MEAL
$ / TON
439.9
433
439.4
9.1
2.11%
SEP ’22 SOY MEAL
$ / TON
426.5
418.9
426.5
10.1
2.43%
MAR ’22 Chicago SRW
$ / BSH
9.77
9.51
9.77
0.49
5.28%
MAY ’22 Chicago SRW
$ / BSH
9.84
9.3225
9.825
0.485
5.19%
JUL ’22 Chicago SRW
$ / BSH
9.62
9.15
9.6
0.43
4.69%
SEP ’22 Chicago SRW
$ / BSH
9.4575
9.03
9.435
0.3875
4.28%
DEC ’22 Chicago SRW
$ / BSH
9.405
8.98
9.355
0.36
4.00%
MAR ’22 Kansas City HRW
$ / BSH
9.835
9.835
9.835
0.2925
3.07%
MAY ’22 Kansas City HRW
$ / BSH
10.0175
9.5125
10
0.47
4.93%
JUL ’22 Kansas City HRW
$ / BSH
9.865
9.385
9.85
0.4425
4.70%
SEP ’22 Kansas City HRW
$ / BSH
9.74
9.3
9.735
0.4075
4.37%
DEC ’22 Kansas City HRW
$ / BSH
9.6825
9.2825
9.6725
0.3875
4.17%
MAR ’22 MLPS Spring Wheat
$ / BSH
9.7925
9.7925
9.7925
-0.0975
-0.99%
MAY ’22 MLPS Spring Wheat
$ / BSH
10.2
9.865
10.195
0.255
2.57%
JUL ’22 MLPS Spring Wheat
$ / BSH
10.135
9.795
10.1325
0.265
2.69%
SEP ’22 MLPS Spring Wheat
$ / BSH
9.8475
9.5125
9.84
0.2775
2.90%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.83
9.56
9.82
0.255
2.67%
MAR ’21 ICE Dollar Index
$
97.05
96.625
97.01
0.316
0.33%
AP ’21 Light Crude
$ / BBL
101.53
95.32
101.27
5.55
5.80%
MA ’21 Light Crude
$ / BBL
98.79
93.21
98.52
5.02
5.37%
APR ’22 ULS Diesel
$ /U GAL
3.1092
2.9299
3.1035
0.1722
5.87%
MAY ’22 ULS Diesel
$ /U GAL
3.003
2.845
3.0025
0.1559
5.48%
APR ’22 Gasoline
$ /U GAL
3.0642
2.9432
3.059
0.1265
4.31%
MAY ’22 Gasoline
$ /U GAL
3.0376
2.9206
3.0349
0.126
4.33%
MAR ’22 Feeder Cattle
$ / CWT
0
#N/A
157.725
0
0.00%
APR ’22 Feeder Cattle
$ / CWT
0
#N/A
162
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
141.425
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
137.7
0
0.00%
APR ’22 Live Hogs
$ / CWT
0
#N/A
103.5
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
107.65
0
0.00%
FEB ’22 Class III Milk
$ / CWT
0
#N/A
20.92
0
0.00%
MAR ’22 Class III Milk
$ / CWT
22.25
22.12
22.25
0.2
0.91%
APR ’22 Class III Milk
$ / CWT
22.95
22.92
22.95
0.2
0.88%
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