Despite some supportive data from USDA’s World Agricultural Supply and Demand Estimates (WASDE) report this morning, it ultimately failed to move the needle as it might have under more “normal” circumstances. That’s because word of negotiations between Russia and Ukraine sent oil and wheat prices spiraling lower – both commodities had seen huge run-ups since the invasion started. Wheat prices suffered limit-down losses today. Corn and soybeans faced downward pressure from the ensuing spillover weakness, with corn fading more than 2% and soybeans down around 1% by the close.
With the exception of the Dakotas, more wet weather will land on large parts of the Midwest and Plains between Thursday and Sunday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally dry weather returning to the Central Plains between March 16 and March 22, with widespread warmer-than-normal conditions for most of the central U.S.
On Wall St., the Dow jumped 688 points higher in afternoon trading to 33,320 on a round of bargain buying and on the news that Russia and Ukraine have begun a round of what Ukrainian President Zelensky calls “constructive negotiations.” Energy prices tumbled significantly lower, with crude oil cooling 11% to fall back to $109 per barrel. Diesel eroded 20% lower, with gasoline down around 10%. The U.S. Dollar also softened significantly today.
On Tuesday, commodity funds were net sellers of CBOT wheat (-14,000) contracts but were net buyers of corn (+2,500), soybeans (+13,500), soymeal (+7,000) and soyoil (+3,500).
NOTE: Farm Futures is conducting its March 2022 survey to project acreage estimates ahead of USDA’s March 31 Prospective Plantings report. We will release the survey results ahead of USDA’s numbers to help you adjust your grain marketing plans accordingly. Click here to take our survey – as thanks, you’ll be entered for a chance to win one of five $50 Amazon gift cards.
Corn
Corn prices followed other commodities lower Wednesday, as today’s WASDE report failed to offer any redeeming grace (click here for exclusive Farm Futures analysis of today’s numbers). March futures lost 19.5 cents to $7.35, with May futures down 20 cents to $7.33.
Corn basis bids were steady to firm after improving 2 to 10 cents across five Midwestern locations on Wednesday.
Private exporters announced to USDA the sale of 3.9 million bushels of corn for delivery during the current marketing year, which began September 1.
USDA served up some bullish data for corn in today’s WASDE report after citing “increased food, seed, and industrial use, larger exports, and smaller stocks relative to last month.” Ethanol usage improved 25 million bushels to 5.350 billion. Exports also moved 75 million bushels higher, to 2.500 billion in the wake of sharply lower exports from Ukraine. The season-average farm price firmed 20 cents to reach $5.65 per bushel.
Consequently, U.S. corn ending stocks dropped from 1.540 billion bushels in February down to 1.440 billion bushels this month. That was lower than analysts had anticipated, offering an average trade guess of 1.479 billion bushels prior to today’s report.
Per the latest data from the U.S. Energy Information Administration, ethanol production saw moderate improvements this past week, reaching a daily average of 1.028 million barrels for the week ending March 4. That was the highest weekly output since late January. Ethanol stocks firmed 1.4% from a week ago and are 14.5% higher year-over-year.
Ahead of the next export report from USDA, out tomorrow morning, analysts expect the agency to show corn sales ranging between 21.7 million and 74.8 million bushels for the week ending March 3.
Preliminary volume estimates were for 255,929 contracts, fading moderately below Tuesday’s final count of 337,581.
Soybeans
Soybean prices faded even amid bullish supply and demand data from USDA this morning. (More on that below). Losses were relatively minimal compared to other commodities, however. March futures dropped 16.25 cents to $16.8825, with May futures down 16.5 cents to $16.7325.
Soybean basis bids were steady to firm across the central U.S. on Wednesday after rising 2 to 6 cents higher at four Midwestern locations today.
Private exporters announced to USDA the sale of 20,000 metric tons of soyoil to unknown destinations, which is also for delivery in 2021/22.
In today’s WASDE report, USDA anticipates higher exports and lower ending stocks versus a month ago. Export estimates improved 40 million bushels to 2.09 billion. And ending stocks declined by an equal amount, landing at 285 million bushels. Analysts were expecting an even bigger drop, with an average trade guess of 278 million.
As for global demand, USDA reports “lower production, crush, exports and stocks.” Of particular note, Brazil’s production estimates plummeted 257 million bushels lower to 4.666 billion bushels. Total global stocks fell from 3.411 billion bushels in February down to 3.305 billion bushels. In fact, production estimates for Brazil, Argentina and Paraguay have eroded 1.04 billion bushels lower since early December – that’s a 13.6% loss in just three months.
Ahead of Thursday morning’s export report from USDA, analysts expect the agency to show soybean sales ranging between 66.1 million and 117.6 million bushels for the week ending March 3. Analysts also think USDA will show soymeal sales ranging between 75,000 and 400,000 metric tons last week, plus up to 40,000 MT of soyoil sales.
Preliminary volume estimates were for 187,440 contracts, slipping slightly below Tuesday’s final count of 190,642.
Wheat
Wheat prices were hammered, following crude oil and other commodities lower on a wave of technical selling largely spurred by the prospect of Ukraine/Russia negotiations that could put an end to the current invasion if they go well. Nearly one third of the world’s wheat exports come from these two countries. May Chicago SRW futures lost 85 cents to $12.0150, May Kansas City HRW futures tumbled 85 cents to $11.1450, and May MGEX spring wheat futures dropped 60 cents to $10.84.
USDA’s latest outlook for wheat includes “lower supplies, unchanged domestic use, reduced exports, and higher ending stocks. Exports slid 10 million bushels lower to 800 million, due to lower-than-expected sales of hard and soft red winter wheat. Ending stocks inched 5 million bushels higher to 653 million, versus analyst estimates of 628 million. Still, stocks remain 23% lower year-over-year for now.
The season-average farm price may seem low, at $7.50 per bushel, but USDA noted that “despite the recent sharp increases in futures and cash prices, a significant majority of U.S. wheat has already been marketed this MY, limiting the SAFP increase.”
Ahead of tomorrow morning’s export report from USDA, analysts expect to see wheat sales ranging between 9.2 million and 25.7 million bushels for the week ending March 3.
Through March 3, Russia’s 2021/22 wheat exports have reached 837.8 million bushels, a year-over-year decline of 30.7% so far, per the country’s agriculture ministry. Russian barley exports are also down 32.6% versus last year’s pace. Russia’s prime minister stressed that due to international sanctions, the country needs to focus on keeping domestic supplies in the country to avoid future shortages.
Egypt’s finance minister reports that the country’s strategic wheat reserves are now sufficient for eight months, assuming domestic production will shore up current supplies in April.
Japan is planning to hold a simultaneous buy-and-sell auction on March 16 to purchase 2.9 million bushels of feed wheat and 4.6 million bushels of feed barley. The grain would be for arrival by August 25.
Preliminary volume estimates were for 131,127 CBOT contracts, falling to nearly half of Tuesday’s final count of 259,063.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Mar
757.25
734
735
-19.5
22-May
759.5
731
733
-20
Soybeans
22-Mar
1745.25
1684.5
1686.5
-16.25
22-May
1734
1669.5
1671.75
-16.5
Soymeal $/ton
22-May
485
471.8
474.7
1.4
Soyoil cents/lb
22-May
78.58
73.05
74.15
-1.43
Wheat $/bushel
22-Mar
984
1199.5
-73.5
22-May
1285
1201.5
1201.5
-85
KC Wheat
22-Mar
1106.25
22-May
1199.5
1114.5
1114.5
-85
MPLS Wheat
22-Mar
1129.75
22-May
1142
1084
1084
-60
Live Cattle cents/lb
22-Apr
139.7
137.425
137.5
-1.55
Feeder Cattle cents/lb
22-Apr
161.8
159.55
159.925
-0.4
Lean Hogs cents/lb
22-Apr
108.175
106.425
107.4
-0.825
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Apr
126.84
103.63
109.35
-14.35
Diesel
22-Apr
4.6709
3.3735
3.4794
-0.9579
Unleaded Gasoline $/gallon
22-Apr
3.76
3.1653
3.3066
-0.376
Natural Gas
22-May
4.664
4.488
4.548
-0.015
U.S. Dollar Index
22-Mar
99.085
97.85
97.97
-1.11
Gold $/ounce
22-Apr
2068.5
1981
1988.5
-51.6
Copper
22-Mar
4.719
4.546
4.559
-0.1415
Fertilizer Swaps
(as of 02/25)
DAP Tampa-index
842.5
7.5
DAP-New Orleans
857.1
19.29
Urea-New Orleans
683.4
99.21
Urea-Middle East
665.0
65
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
606.3
0
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Afternoon report: Corn and soybean also spilled into the red on Wednesday.
