Morning report: Weather woes continue to lift grains and oilseeds. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 7-9 cents
Soybeans up 10-16 cents; Soymeal up $4.70/ton; Soyoil up $1.06/lb
Chicago wheat up 17-20 cents; Kansas City wheat up 15-17 cents; Minneapolis wheat up 11-14 cents
*Prices as of 6:50am CDT.
Good morning! Our Feedback from the Field series is live for the 2022 season! Just click this link to take the survey and share updates about your farm’s spring progress. I review and upload results daily to the FFTF Google(TM) MyMap, so farmers can see others’ responses from across the country – or even across the county!
Breaking overnight
The Biden administration’s Environmental Protection Agency announced early this morning it will break with precedent and allow high-ethanol gasoline blends to be sold during the summer to help combat surging fuel prices in the wake of Russia’s military occupation of Ukraine.
Specifically, 15% ethanol gasoline blends will be available for purchase by consumers from June 1 to September 15. Typically, only a 10% blended product is available during that time as further ethanol blending was previously capped due to smog concerns. Academic research has since suggested that higher blends of ethanol additives in fuel do not significantly increase smog output.
The energy industry is likely to bristle at this decision, especially since corn prices have been increasing alongside the energy surge. But voters are bristling even more at the prospect of higher fuel costs this summer, especially as travel plans increase following peak-pandemic isolation over the past two years.
For now, corn growers are likely to be the key beneficiary of the Biden EPA’s shift in policy. Fuel prices are likely to remain high amid the Black Sea conflict, but the addition of cheaper ethanol additives could help calm consumer dissent about strong fuel prices through the peak summer travel months.
Corn
Ethanol expansion hopes and lingering concerns about the ongoing war in Ukraine kept corn prices $0.07-$0.09/bushel higher this morning. Weather delays expected this week across the Midwest also are likely to slow planting progress, reducing the likelihood of higher corn acreage this year amid strong demand pressures.
“While higher-than-expected global ending stocks should be bearish for the corn market, the risk around Ukrainian supply continues to offer support,” Warren Patterson, ING head of commodities strategy, cited the latest stocks estimate for 2021/22 by the USDA in a Reuters report this morning.
USDA’s weekly Crop Progress report yesterday saw some planting progress through the week in states outside the Corn Belt (Texas, North Carolina, Kentucky). But cool and wet weather in the prime Midwest growing region (“I” states, Nebraska) left planters idle last week. This has largely dashed hopes for early sowing – and with it, increased acreage opportunities.
Through the week ending April 10, corn planting progress in the U.S. was unchanged from the prior week at 2% complete. That marks a 2% decline from year-ago paces and rests 1% behind the five-year average.
Market prices shifted yesterday on the prospect of fewer corn acres in 2022, resulting in gains for the corn complex and losses for its soy counterpart as soybeans are expected to benefit from a later planting season as well as strong global edible oil demand. But it is still very early in the corn planting window – almost too early to be throwing the baby out with the bath water just yet.
Planting progress in the optimal window is still quite feasible and will likely remain that way for the next several weeks as soil conditions start to warm. Even if extra acreage is not added this year, hope for trendline yields – or higher – will be the market’s last hope at increasing corn supplies amid a high demand environment in the 2022 growing cycle.
Soybeans
Cold, wet, and even snowy weather forecasts across the Midwest today are likely to push back soybean planting forecasts, adding bullish pressure to the soybean complex following yesterday’s losses.
Rising price pressure from tightening global edible oils stocks also helped support gains in the soy complex this morning, sending soybean futures $0.10-$0.16/bushel higher and soyoil prices over $1/lb higher in the early morning trading session.
Wheat
Wheat prices continued higher overnight despite a positive condition reading on U.S. winter wheat stocks from yesterday’s Crop Progress report. Even with the improvement, winter wheat ratings are still among the poorest on record for early spring. Spring wheat planting progress is likely to be delayed in the Northern Plains as cold and snowy weather persists.
U.S. growers aren’t the only ones feeling the pressure of rising prices. French soft wheat farmers cut back on wheat and sugar plantings this spring in response to soaring costs. Instead, French growers are expected to increase barley and rapeseed acreage.
French soft wheat crops are largely in fantastic condition, though record low temperatures last week could have inflicted some damage on freshly sown sugar beet crops and fruit trees in the country. France is the European Union’s top wheat producer. The E.U. is expected to overtake Russia this year as the world’s largest wheat exporter.
A cross-country precipitation system last week helped boost winter wheat conditions in the Plains, raising winter wheat condition ratings 2% from the previous week to 32% good to excellent for the week ending April 10. Conditions remain significantly lower than the same time last year (53% good to excellent), but this week’s improvement was reassuring to markets that a complete winter wheat shortfall could possibly be avoided.
Winter wheat heading progress continues to struggle against historic benchmarks, though it is still early in the season. Plus, a cool spring has slowed the crop’s emergence from dormancy. As of April 10, 5% of the crop had reached the heading phase. That total was in line with last year’s heading rates though it was a percentage point behind the five-year average.
Weather
Temperatures in the Central Midwest and Eastern Corn Belt will warm into the 60s and 70s today, according to NOAA’s short-range forecasts. But any hopes for early planting progress will be thwarted by showers and thunderstorms that are likely to linger over the region over the next couple days.
Up to three-quarters of an inch is expected East of the Mississippi River today. The Northern Plains will see heavy snowfall today along with some mixed wintery precipitation. It doesn’t look good for spring wheat planting progress, which was a percentage point above the five-year average this week at 6% complete as of Sunday. It will likely further delay sowing in North Dakota and northern Minnesota.
Lawn update: It has been windy as all get out here in the Front Range over the past couple weeks. I have a light pre-emergent and high-nitrogen fertilizer down (my lawn isn’t “established” enough for a full-strength pre-emergent application. Sad) and applied humectant and a liquid aerator last night. We are expecting some rain this morning, so I’m hopeful it will help my poor dry soil start to absorb more moisture.
Financials
Consumer price index data due out today is expected to show inflation rates rising to a new forty-year high this morning as strong consumer demand and continued supply chain log jams continue to send prices rising.
U.S. stocks edged up this morning ahead of the all-important CPI report. S&P 500 futures notched a 2.5-point gain (0.06%) to $4,411.50 while Dow futures rose 16 points (0.05%) to $34,235. Tech stocks led the way as U.S. Treasury bonds stabilized after a massive selloff dropped yields on the 10-year bond to 2.83%.
Globally, bond markets have been in a freefall as central banks raise interest rates to curb inflationary pressures. I fully expect that market dynamic to continue – and potentially intensify – as the U.S. Federal Reserve is expected to speed up its monetary tightening plans in light of high inflation, ongoing supply chain issues, and surging energy prices due to Russia’s war on Ukraine.
Also worth a read on our website, FarmFutures.com
Bryce Knorr explains why winter wheat conditions are more important than ever this year – and what it means for growers.
Cutting nitrogen in 2022 could negatively impact yields. Is it worth it?
Our team’s latest coverage from last Friday’s WASDE reports.
Plus, my latest E-corn-omics post features potential pricing opportunities from Friday’s reports.
The Brazilian safrinha corn crop is looking better each day, Commstock Investment’s Matthew Kruse writes. What that means for U.S. corn growers in a recent Ag Marketing IQ column.
The March 2022 Farm Futures survey found that fertilizer availability will not be as big of an issue for growers this spring. The bigger issues on farmers’ minds? Chemical and parts availability and, as always, weather.
Morning Ag Commodity Prices – 4/12/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAY ’22 CORN
$ / BSH
7.745
7.65
7.725
0.08
1.05%
JUL ’22 CORN
$ / BSH
7.695
7.595
7.6775
0.09
1.19%
SEP ’22 CORN
$ / BSH
7.405
7.2975
7.39
0.0925
1.27%
DEC ’22 CORN
$ / BSH
7.285
7.1675
7.2725
0.0925
1.29%
MAR ’23 CORN
$ / BSH
7.29
7.185
7.28
0.085
1.18%
MAY ’23 CORN
$ / BSH
7.29
7.19
7.2825
0.085
1.18%
JUL ’23 CORN
$ / BSH
7.2525
7.1775
7.2475
0.0875
1.22%
MAY ’22 SOYBEANS
$ / BSH
16.7525
16.57
16.7275
0.175
1.06%
JUL ’22 SOYBEANS
$ / BSH
16.6075
16.425
16.58
0.1725
1.05%
AUG ’22 SOYBEANS
$ / BSH
16.17
16.0125
16.1525
0.16
1.00%
SEP ’22 SOYBEANS
$ / BSH
15.385
15.2725
15.3575
0.12
0.79%
NOV ’22 SOYBEANS
$ / BSH
14.99
14.8825
14.975
0.1175
0.79%
JAN ’23 SOYBEANS
$ / BSH
14.9875
14.8875
14.975
0.115
0.77%
MAR ’23 SOYBEANS
$ / BSH
14.81
14.735
14.795
0.11
0.75%
MAY ’23 SOYBEANS
$ / BSH
14.7825
14.7
14.77
0.11
0.75%
JUL ’23 SOYBEANS
$ / BSH
14.76
14.73
14.76
0.0975
0.66%
MAY ’22 SOYBEAN OIL
$ / LB
75.67
74.3
75.5
1.2
1.62%
JUL ’22 SOYBEAN OIL
$ / LB
74.13
72.9
73.95
1.04
1.43%
MAY ’22 SOY MEAL
$ / TON
464.8
459.8
463.5
4.4
0.96%
JUL ’22 SOY MEAL
$ / TON
459.4
454.8
458.1
3.9
0.86%
AUG ’22 SOY MEAL
$ / TON
450.2
446.7
449
2.7
0.60%
SEP ’22 SOY MEAL
$ / TON
437.6
435.9
436.4
1.8
0.41%
OCT ’22 SOY MEAL
$ / TON
425.6
423.5
424.5
1.9
0.45%
MAY ’22 Chicago SRW
$ / BSH
11.175
10.75
11.1025
0.29
2.68%
JUL ’22 Chicago SRW
$ / BSH
11.25
10.8225
11.175
0.285
2.62%
SEP ’22 Chicago SRW
$ / BSH
11.1725
10.7975
11.115
0.255
2.35%
DEC ’22 Chicago SRW
$ / BSH
11.075
10.75
11.025
0.2125
1.97%
MAR ’23 Chicago SRW
$ / BSH
10.935
10.6975
10.9125
0.195
1.82%
MAY ’22 Kansas City HRW
$ / BSH
11.73
11.34
11.6425
0.2275
1.99%
JUL ’22 Kansas City HRW
$ / BSH
11.7775
11.38
11.7
0.245
2.14%
SEP ’22 Kansas City HRW
$ / BSH
11.7325
11.3675
11.655
0.215
1.88%
DEC ’22 Kansas City HRW
$ / BSH
11.685
11.355
11.6075
0.1875
1.64%
MAR ’23 Kansas City HRW
$ / BSH
11.5775
11.4
11.5775
0.2125
1.87%
MAY ’22 MLPS Spring Wheat
$ / BSH
11.5975
11.3225
11.5575
0.1375
1.20%
JUL ’22 MLPS Spring Wheat
$ / BSH
11.5825
11.2975
11.5675
0.1625
1.42%
SEP ’22 MLPS Spring Wheat
$ / BSH
11.365
11.08
11.3575
0.1775
1.59%
DEC ’22 MLPS Spring Wheat
$ / BSH
11.3525
11.07
11.3075
0.1375
1.23%
MAR ’23 MLPS Spring Wheat
$ / BSH
11.2975
#N/A
11.14
0
0.00%
JUN ’21 ICE Dollar Index
$
100.23
99.925
100.165
0.241
0.24%
MA ’21 Light Crude
$ / BBL
98.45
94.84
97.91
3.62
3.84%
JU ’21 Light Crude
$ / BBL
98.05
94.52
97.53
3.61
3.84%
MAY ’22 ULS Diesel
$ /U GAL
3.4096
3.2798
3.4015
0.1338
4.09%
JUN ’22 ULS Diesel
$ /U GAL
3.2769
3.1623
3.2715
0.1295
4.12%
MAY ’22 Gasoline
$ /U GAL
3.0751
3.0093
3.0694
0.0663
2.21%
JUN ’22 Gasoline
$ /U GAL
3.0625
2.9966
3.0591
0.0699
2.34%
APR ’22 Feeder Cattle
$ / CWT
0
#N/A
156.65
0
0.00%
MAY ’22 Feeder Cattle
$ / CWT
0
#N/A
159.9
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
138.525
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
134.8
0
0.00%
APR ’22 Live Hogs
$ / CWT
0
#N/A
98.425
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
109
0
0.00%
APR ’22 Class III Milk
$ / CWT
24.19
24.17
24.19
-0.02
-0.08%
MAY ’22 Class III Milk
$ / CWT
24.98
24.89
24.98
0.05
0.20%
JUN ’22 Class III Milk
$ / CWT
24.98
24.94
24.98
0.16
0.64%
