Morning report: Soy rises on planting delays from showers across the Heartland early this week. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 8-12 cents
Soybeans up 11-14 cents; Soymeal up $1.50/ton; Soyoil up $0.15/lb
Chicago wheat up 37-40 cents; Kansas City wheat up 36-37 cents; Minneapolis wheat up 32-38 cents
*Prices as of 6:55am CDT.
Feedback from the Field updates! Corn planting progress may be slowing down in the Heartland, but growers in the Upper Midwest are weighing prevent plant options, according to responses from growers in our latest Feedback from the Field column.
“No corn this year,” shared a Minnesota producer. “We are too far behind the calendar, in my opinion, for the crop to complete maturity.”
“Time for prevent plant,” echoed a Wisconsin corn grower.
Want to see how your farm’s progress stacks up against other growers across the country? 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 MyMap, so farmers can see others’ responses from across the country – or even across the county!
Russia
I covered the afternoon report last Friday (a special thank-you goes out to my colleague, Ben Potter, for covering my morning report on Friday) and analyzed comments from Russian president Vladimir Putin following a television interview he gave on Friday evening (Russian time).
Putin disputed accessibility to Ukrainian grain supplies in the interview and called for Western sanctions against Belarus and Russia to be lifted to allow for grain and fertilizer trade access. Putin admonished the West for creating a potential global food crisis and proclaimed that Ukraine has plenty of options to ship its agricultural products into global channels.
Ukraine had previously shipped around 6 million metric tonnes (MMT) of grain per month prior to Russia’s invasion. Following the Russian occupation, only about 1MMT of Ukrainian grain per month has been shipped abroad. An overnight report from Ukraine’s agricultural ministry totals 2021/22 marketing year to date Ukrainian grain exports at 47.2 MMT. USDA expects only 42MMT of Ukraine’s corn and wheat will make it to international channels during Ukraine’s current July-June marketing campaign.
But we have found out in recent days that Russia is shipping Ukraine’s wheat despite the sanctions and even though it’s not Russia’s wheat. A Reuters report published last week discovered Ukrainian grain had surfaced in Turkey, purchased from Russian intermediaries and shipped via ports in Russian-annexed Crimea.
“Russia is shamelessly stealing Ukrainian grains and getting it out from the invaded Crimea. These grains are being shipped to foreign countries, including Turkey,” Ukrainian ambassador to Turkey Vasyl Bodnar told reporters from Ankara.
Ukraine has also accused Russia of sending wheat to Syria, an African ally entrenched in an ongoing 11-year civil war.
After Friday’s interview I cautioned readers to digest Putin’s words with caution. The interview was likely a propaganda piece to steady morale for the war across the country. Russian troops currently occupy a fifth of Ukraine, though troop morale has been low, especially as Ukraine receives more advance defense technology from Western allies (check out this fascinating New York Times’ Daily podcast episode to learn more about the interworking of the Russian military).
But the interview also suggests that Putin is not yet ready to back down from playing the aggressor role in Ukraine. Wheat and corn prices traded lower following Putin’s comments on Friday, but they rose just as rapidly this morning after the market began to suspect Putin will not follow through on these claims.
Yesterday, the New York Times published a report tracking some of Russia’s trade flows of stolen Ukrainian wheat. I highly encourage readers to check it out to better understand the logistical efforts taken by the Russians to profiteer off of Ukraine’s losses.
Russia has allegedly stolen 18.4 million bushels of Ukrainian wheat, worth an estimated $100 million. The bushels were likely sourced from farms and storage facilities in Eastern Ukraine, where Russia has refocused its attacks. Eastern Ukraine is also the primary region for wheat production in the country.
The stolen bushels are believed to be shipped via truck to Crimea (labeled in the above map as “Krym”) on the Black Sea and then loaded into cargo vessels.
While specific buyers are not yet known, it seems likely that the grain is going to likely be purchased by African buyers. Senegal’s president tweeted favorably of Putin’s interview on Friday. As noted earlier in the article, Syria seems to be a likely destination for potential stolen wheat cargoes.
This is not surprising – prior to the war’s onset, Russia and Ukraine supplied 40% of Africa’s wheat imports. The United Nations (U.N.) estimates that a drought in eastern Africa (Horn of Africa) is going to drive 17 million people in Somalia, Kenya, and Ethiopia into famine this year.
The U.N. has made desperate efforts in recent weeks to barter a peace negotiation that would free up Ukrainian and Russia grain while also allowing for unsanctioned access to Russian and Belarusian fertilizer supplies. The two countries combine for around 13% of the world’s fertilizer supplies, though access has been limited due to Western-imposed banking sanctions.
“If the West can provide alternatives, countries will listen to that,” Hassan Khannenje, director of the HORN International Institute for Strategic Studies, told the NYT. “But being hysterical about it is only going to push them (African food buyers) further into the arms of Russia.”
Inputs
India is moving forward with construction on two fertilizer plants that could help ease global fertilizer prices in the coming months. The Barauni and Sindri fertilizer plants are already in existence but are being retrofitted to increase production capacity in India. India is the world’s largest fertilizer importer.
Plant production is slated to come online in October, suggesting some construction delays after previous reports indicated the Barauni plant would ramp up production this month (June 2022).
India’s Fertilisers minister expects the incoming capacity to be enough to send global fertilizer prices falling in “the near future.” As India’s fertilizer purchases drive significant global pricing impacts in the fertilizer market, this could potentially have favorable pricing ramifications for U.S. producers.
Corn
Corn prices followed gains in the wheat market overnight, rising $0.08-$0.12/bushel on ongoing tensions over Russia’s handling of Ukrainian grain exports. A lower dollar helped improve price prospects for corn, as did Friday’s EPA release of ethanol blending mandates.
The U.S. EPA also released eagerly anticipated biofuel blending targets just after the market close on Friday. Biofuel blending targets for 2022 are forecast at 20.63 billion gallons, below the proposed volume. Retroactive adjustments for 2021 blending were above market expectations while 2020 volumes went unchanged.
The EPA added a 250-million-gallon supplemental standard to the 2022 blend mandates. It also denied 69 petitions for biofuel blending exemptions from refineries but will allow small refineries extra time to fulfill 2020 blending mandates.
Soybeans
Soybean prices followed gains in the corn and soybean markets $0.12-$0.15/bushel higher overnight but also saw price appreciation thanks to a rainy forecast across the Midwest early this week that will likely delay planting progress.
With the earliest prevent plant/crop insurance deadlines still a few days away, markets are not yet excessively worried about losing record soybean acreage in 2022. But if that weather forecast does not show clear skies in the Upper Midwest by later this week, we could see more bullish price action in the soybean complex over the next couple days.
Wheat
Strong storms in France over the weekend raised concerns about soft wheat production in the European Union’s top wheat producer. The E.U. is the world’s second largest wheat exporter, behind Russia. France’s National Farmers’ Union Federation (FNSEA) reported heavy hail and strong winds across France this weekend. Drought over the past month deteriorated French soft wheat condition ratings after what had previously been a near-perfect growing season.
Meanwhile in the Black Sea, Russian warships continue to blockade Ukrainian export terminals as Russian President Vladimir Putin seems determined to force Ukrainian grain to be shipped via Russia’s ally, Belarus.
The persistent Russian blockade and French weekend storms drove wheat prices higher this morning, with Chicago and Kansas City futures accelerating $0.37-$0.40/bushel higher on the overarching sentiments.
“Russia is trying to put more pressure on the world to lift sanctions by sabotaging world food supply,” Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney, told Reuters this morning. “And well knowing that they sit on a big pile of food for exports this year.”
With 72% of the U.S. winter wheat crop headed as of last Sunday, attention is increasingly turning to harvest of hard red winter wheat crops in the Southern Plains. U.S. Wheat Associate’s weekly Harvest Report finds harvest progress moving slowly in Texas and Oklahoma this week after more widespread rain showers.
The moisture is welcomed, though the timing isn’t great. About 24% of Texas’s crop is harvested while harvest is 14% complete in Oklahoma.
The showers have also delayed heading progress in Kansas, where test cutting remains a week to 10 days out thanks to 9-10 inches of rain over the past week. Temperatures remain on the cool side which is also contributing to maturation delays.
Soft red winter wheat crops are nearly 80% headed across the country. Scattered showers are likely to keep crop development from advancing more quickly. Harvest has already begun in Alabama, where 10% of the state’s crop has been harvested.
Soft white wheat crops in the Pacific Northwest are in good shape, with spring crops faring better than their winter counterparts. Cool and wet weather has slowed crop development for spring planted crops and heading progress for winter crops. Winter crops in Washington (11% headed), Idaho (14%), and Oregon (29%) are beginning to reach peak maturation stages, which means that harvest will be approaching in the next several weeks.
Hard red spring crops in the Northern Plains are looking adequate – if they aren’t in Minnesota or North Dakota. A cool and wet spring has placed sowing rates for spring wheat crops in both states significantly behind the five-year average. Growers who are not opting for prevent plant acreage this spring will have a 10-day window to finishing planting spring wheat crops.
Weather
Soybean growers will now battle rains this week to finish 2022 planting progress, according to NOAA’s short-range forecasts. The Northern and Central Plains will likely see light showers later this evening, while the Eastern Corn Belt will see up to two inches of accumulation in some regions over the next 24 hours.
Warm temperatures forecast today should help encourage crop development, especially for corn crops and early planted soybeans.
NOAA’s 6- to 10-day forecasts updated yesterday are trending warmer for the Upper Midwest while the 8- to 14-day forecast is beginning to show dry and warm conditions for the Eastern Corn Belt.
What else I’m reading this morning on our website, FarmFutures.com
Morning markets 6/6/22
Contract
Units
High
Low
Last
Net Change
% Change
JUL ’22 CORN
$ / BSH
7.41
7.315
7.3725
0.1025
1.41%
SEP ’22 CORN
$ / BSH
7.16
7.025
7.1225
0.11
1.57%
DEC ’22 CORN
$ / BSH
7.05
6.9425
7.0125
0.1125
1.63%
MAR ’23 CORN
$ / BSH
7.0975
6.9975
7.0575
0.105
1.51%
MAY ’23 CORN
$ / BSH
7.1075
7
7.06
0.0925
1.33%
JUL ’23 CORN
$ / BSH
7.0725
6.9825
7.0275
0.0925
1.33%
SEP ’23 CORN
$ / BSH
6.55
6.52
6.55
0.0875
1.35%
JUL ’22 SOYBEANS
$ / BSH
17.1775
17.0625
17.1325
0.155
0.91%
AUG ’22 SOYBEANS
$ / BSH
16.5025
16.4025
16.4675
0.13
0.80%
SEP ’22 SOYBEANS
$ / BSH
15.75
15.6325
15.7225
0.125
0.80%
NOV ’22 SOYBEANS
$ / BSH
15.43
15.2875
15.3975
0.1275
0.83%
JAN ’23 SOYBEANS
$ / BSH
15.4675
15.335
15.4425
0.1325
0.87%
MAR ’23 SOYBEANS
$ / BSH
15.3825
15.2525
15.3525
0.1225
0.80%
MAY ’23 SOYBEANS
$ / BSH
15.3775
15.2475
15.35
0.1225
0.80%
JUL ’23 SOYBEANS
$ / BSH
15.3575
15.23
15.3575
0.1475
0.97%
AUG ’23 SOYBEANS
$ / BSH
10.75
#N/A
14.9525
0
0.00%
JUL ’22 SOYBEAN OIL
$ / LB
82.71
81.9
82.02
0.17
0.21%
AUG ’22 SOYBEAN OIL
$ / LB
80.6
79.76
79.88
0.36
0.45%
JUL ’22 SOY MEAL
$ / TON
412.4
407.9
410.7
2.8
0.69%
AUG ’22 SOY MEAL
$ / TON
405.3
401.6
404.2
3.2
0.80%
SEP ’22 SOY MEAL
$ / TON
398.9
395.5
397.7
3
0.76%
OCT ’22 SOY MEAL
$ / TON
393.5
390.2
392
2.5
0.64%
DEC ’22 SOY MEAL
$ / TON
394.8
391.1
394.6
3.7
0.95%
JUL ’22 Chicago SRW
$ / BSH
10.945
10.6
10.8
0.4
3.85%
SEP ’22 Chicago SRW
$ / BSH
11.06
10.72
10.92
0.4025
3.83%
DEC ’22 Chicago SRW
$ / BSH
11.1575
10.8025
11.025
0.395
3.72%
MAR ’23 Chicago SRW
$ / BSH
11.24
10.925
11.11
0.385
3.59%
MAY ’23 Chicago SRW
$ / BSH
11.265
10.9975
11.0775
0.3125
2.90%
JUL ’22 Kansas City HRW
$ / BSH
11.7325
11.3425
11.59
0.38
3.39%
SEP ’22 Kansas City HRW
$ / BSH
11.795
11.4175
11.655
0.3725
3.30%
DEC ’22 Kansas City HRW
$ / BSH
11.89
11.5925
11.7475
0.365
3.21%
MAR ’23 Kansas City HRW
$ / BSH
11.9325
11.7325
11.7625
0.3275
2.86%
MAY ’23 Kansas City HRW
$ / BSH
11.7875
11.675
11.6925
0.3575
3.15%
JUL ’22 MLPS Spring Wheat
$ / BSH
12.3975
12.015
12.2575
0.34
2.85%
SEP ’22 MLPS Spring Wheat
$ / BSH
12.4
12.0225
12.26
0.325
2.72%
DEC ’22 MLPS Spring Wheat
$ / BSH
12.35
12.0875
12.24
0.3225
2.71%
MAR ’23 MLPS Spring Wheat
$ / BSH
12.4175
12.2875
12.375
0.43
3.60%
MAY ’23 MLPS Spring Wheat
$ / BSH
12.3275
#N/A
11.9175
0
0.00%
JUN ’21 ICE Dollar Index
$
102.23
101.865
101.995
-0.165
-0.16%
JU ’21 Light Crude
$ / BBL
120.99
118.8
118.86
-0.01
-0.01%
AU ’21 Light Crude
$ / BBL
118.28
116.23
116.26
0.03
0.03%
JUL ’22 ULS Diesel
$ /U GAL
4.3689
4.2804
4.2804
0.0001
0.00%
AUG ’22 ULS Diesel
$ /U GAL
4.2381
4.1552
4.1559
0.001
0.02%
JUL ’22 Gasoline
$ /U GAL
4.326
4.1988
4.1988
-0.0534
-1.26%
AUG ’22 Gasoline
$ /U GAL
4.0875
3.9896
3.9896
-0.0382
-0.95%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
173.875
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
176.3
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
133.6
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
133.85
0
0.00%
JUN ’22 Live Hogs
$ / CWT
0
#N/A
110.2
0
0.00%
JUL ’22 Live Hogs
$ / CWT
0
#N/A
110.75
0
0.00%
JUN ’22 Class III Milk
$ / CWT
24.34
#N/A
24.33
0
0.00%
JUL ’22 Class III Milk
$ / CWT
24.6
24.54
24.54
-0.06
-0.24%
AUG ’22 Class III Milk
$ / CWT
24.45
24.43
24.43
0.01
0.04%
Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!
