Morning report: Oil dips back below $100/barrel while Black Sea supply fears keep wheat steady. (Comments are updated by 7:30 a.m. Central Time.)
Corn down 7-10 cents
Soybeans down 17-27 cents; Soymeal down $4.10/ton; Soyoil down $1.31/lb
Chicago wheat up 4-9 cents; Kansas City wheat up 3-8 cents; Minneapolis wheat down 2-3 cents
*Prices as of 6:55am CST.
Corn
Speculator selling and falling energy prices left the corn complex trading $0.07-$0.10/bushel lower overnight
Ukraine is slated to plant 39% fewer spring grain acres this year as the Russian military invasion dampens markets, limits fuel and fertilizer access, and roils infrastructure and supply chain layouts. Ukrainian agricultural consultancy APK-Inform forecasted overnight that Ukraine’s spring grain acreage will likely drop 39% from last year’s sowings to 11.6 million acres amid the ongoing war.
Ukraine planted 19 million acres of spring grains last year, off of which it harvested a record-breaking 86 million metric tonnes (MMT) of grain. The country will likely not be a significant global grains exporter this year as the ongoing military conflict leaves acres unplanted and shipping terminals inaccessible to global buyers.
“After the invasion of Russian troops into the territory of Ukraine and as a result of ongoing and further active hostilities in many key regions, there is no physical opportunity to start sowing,” APK-Inform said in a report.
APK-Inform estimates that 4.9 million acres of winter grains crops, including winter wheat, barley, and rye, will likely either be damaged or unable to be harvested due to the war. The consultancy currently forecasts only a mere 13.6 million acres of winter grains will be harvested this summer – a 28% loss.
Cash bids were mostly steady across the Midwest yesterday, though corn and soybean offers at river terminals destined for the U.S. Gulf saw some slight firming. Farmer selling of both crops was light as futures prices edged lower in yesterday’s trading session.
Soybeans
A funds selloff and lower energy prices combined with growing fears about Chinese buying activity and demand amid surging omicron variant cases of COVID-19 in Chinese all triggered a $0.17-$0.27/bushel selloff in the soybean market this morning.
Soyoil futures took the biggest hit on China’s COVID-19 concerns thanks to a deep fall in palm oil prices while soymeal futures suffered less, due in part to a temporary export ban on soymeal in Argentina.
Wheat
Wheat prices appeared to largely stabilize overnight, with Chicago futures traded $0.02-$0.09/bushel higher at last glance. May 2022 Chicago SRW and Kansas City HRW futures hovered just above the $11/bushel benchmark this morning. Minneapolis futures shed $0.02-$0.04/bushel as global buyers flock to Australian shippers for exportable wheat supplies.
A global tender issued by South Korea overnight reaffirmed global wheat demand while a Russian wheat export ban issued yesterday further squeezed supply capacity in the Black Sea. Plus, dry conditions on the U.S. Plains are creating concerns about the size of the 2022 U.S. wheat crop even though 2022 winter wheat acreage soared to a six-year high.
USDA released weekly crop progress reports for states in the Southern Plains last night, with much of the nation’s winter wheat crop showing signs of drought distress which could threaten total output this year.
Top producer Kansas saw weekly ratings slip 1%, with only 23% of its crop reported in good to excellent condition. Soil moisture levels improved slightly on the week, thanks to wintry precipitation through the middle of last week.
Number two producer by acreage, Texas, fared even worse as ratings also dropped 1% leaving 6% of the state’s crop in good to excellent condition. About 27% of the state’s corn crop is already in the ground, in line with the five-year benchmark.
Oklahoma’s wheat crop stands at 24% good to excellent, an encouraging 15% higher than the previous week after beneficial rains last week. USDA’s local NASS officials noted that jointing progress in Oklahoma’s winter wheat crop is about 6% behind the five-year average of 14% for the same time period.
About 18% of Colorado’s winter wheat crop is in good to excellent condition, down 3% from late February readings.
Soft red wheat crops in Arkansas are faring much better than hard red winter wheat counterparts, with 71% of its winter wheat crop in good to excellent condition.
Weather
Spring weather is back in the Heartland, according to NOAA’s short-range forecasts. Mostly clear skies are forecast across the Midwest and Plains today, though the Eastern Corn Belt could see a chance of rain this afternoon. Severe thunderstorms will continue to move across the Southeast today.
Financials
European leaders from Poland, Slovenia, and the Czech Republic will meet Ukrainian President Volodymyr Zelenskyy in Kyiv while Russian forces likely continue bombarding the city to show the European Union’s support for Ukraine.
Omicron cases are surging in China. China continues to enforce its Zero COVID policy, which means that impending lockdowns from rising caseloads could further entangle factory output, logistics, and supply chains not just in China, but also around the world.
The rise in Chinese lockdowns translates into a slide for oil prices, which dipped below $100/barrel this morning. That’s great news for farmers who may be looking to lock in spring fuel supplies over the coming weeks. Also great news for me because my car’s gas light is about to turn on any second now.
S&P 500 futures inched up 4.5 points (0.11%) to $4,168 on the oil market selloff. Cooling oil prices translate to easing inflationary pressures, which the market likes to see. Asian markets took a beating overnight on China’s surging omicron outbreaks.
Speaking of supply chains, thousands of Canadian Pacific Railway Ltd workers are threatening to begin a strike beginning tonight at midnight if an agreement cannot be reached with the company over improved wages, benefits, and pensions for union workers.
The union’s chief point of dispute has been low pension caps for its employees. CP is Canada’s second-largest railway. It operates lines that run all the way down to Kansas City, MO with grain shipping as its primary business.
A potential strike would severely slow grain flows between Canada and the U.S., at a time when Canadian livestock producers are increasingly reliant on American grain supplies to keep herds nourished. Canadian fertilizers would also become more difficult – and expensive – for U.S. farmers to obtain if CP workers strike, especially as planting season in the U.S. approaches.
The Federal Reserve will begin its Federal Open Market Committee (FOMC) meeting today. The two-day meeting will likely culminate in a Federal Funds interest rate increase as inflation continues to rise to 40-year heights.
Also worth a read on our website, FarmFutures.com
Corn continues to benefit from bullish fundamentals. Naomi Blohm has the latest insights in a recent Ag Marketing IQ column.
Our team’s coverage of the March 2022 WASDE report from USDA.
Crop budgets have shifted significantly over the past few weeks. Here is your guide to calculating the most accurate budget for your farm.
Bryce Knorr points out that fertilizer decisions – especially for nitrogen – will factor heavily into 2022 acreage.
Three European fertilizer producers, Yara, Hungarian-based Nitrogenmuvex, and Borealis, are cutting fertilizer production due to surging natural gas prices and limited supplies. That will likely add to growing risks of rising global food inflation.
Morning Ag Commodity Prices – 3/15/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAY ’22 CORN
$ / BSH
7.4675
7.365
7.4
-0.0825
-1.10%
JUL ’22 CORN
$ / BSH
7.175
7.05
7.08
-0.105
-1.46%
SEP ’22 CORN
$ / BSH
6.69
6.57
6.59
-0.1175
-1.75%
DEC ’22 CORN
$ / BSH
6.515
6.395
6.42
-0.105
-1.61%
MAR ’23 CORN
$ / BSH
6.5
6.3975
6.43
-0.075
-1.15%
MAY ’23 CORN
$ / BSH
6.4725
6.3925
6.4125
-0.0775
-1.19%
JUL ’23 CORN
$ / BSH
6.425
6.3625
6.3875
-0.0775
-1.20%
MAY ’22 SOYBEANS
$ / BSH
16.74
16.38
16.43
-0.275
-1.65%
JUL ’22 SOYBEANS
$ / BSH
16.5
16.16
16.205
-0.2625
-1.59%
AUG ’22 SOYBEANS
$ / BSH
16.07
15.7625
15.8
-0.24
-1.50%
SEP ’22 SOYBEANS
$ / BSH
15.2725
15.005
15.0525
-0.205
-1.34%
NOV ’22 SOYBEANS
$ / BSH
14.8175
14.545
14.595
-0.215
-1.45%
JAN ’23 SOYBEANS
$ / BSH
14.6775
14.44
14.48
-0.185
-1.26%
MAR ’23 SOYBEANS
$ / BSH
14.2125
14.0275
14.06
-0.17
-1.19%
MAY ’23 SOYBEANS
$ / BSH
14.05
13.88
13.895
-0.1825
-1.30%
JUL ’23 SOYBEANS
$ / BSH
13.9175
13.825
13.8425
-0.185
-1.32%
MAY ’22 SOYBEAN OIL
$ / LB
74.4
72.29
72.47
-1.48
-2.00%
JUL ’22 SOYBEAN OIL
$ / LB
70
68.65
68.73
-1.38
-1.97%
MAY ’22 SOY MEAL
$ / TON
485.2
475.6
479.1
-5.2
-1.07%
JUL ’22 SOY MEAL
$ / TON
472.2
463.4
466.5
-4.6
-0.98%
AUG ’22 SOY MEAL
$ / TON
459.4
451.8
453.4
-4.3
-0.94%
SEP ’22 SOY MEAL
$ / TON
441
438.8
439.8
-5.5
-1.24%
OCT ’22 SOY MEAL
$ / TON
433.3
427.3
428.4
-5.5
-1.27%
MAY ’22 Chicago SRW
$ / BSH
11.325
10.8825
11.04
0.0775
0.71%
JUL ’22 Chicago SRW
$ / BSH
11.03
10.6
10.7675
0.0675
0.63%
SEP ’22 Chicago SRW
$ / BSH
10.5325
10.2125
10.3025
0.0125
0.12%
DEC ’22 Chicago SRW
$ / BSH
10.0525
9.7575
9.85
-0.0275
-0.28%
MAR ’23 Chicago SRW
$ / BSH
9.595
9.34
9.42
-0.0575
-0.61%
MAY ’22 Kansas City HRW
$ / BSH
11.3175
10.9075
11.03
0.03
0.27%
JUL ’22 Kansas City HRW
$ / BSH
11.1525
10.775
10.8975
0.0425
0.39%
SEP ’22 Kansas City HRW
$ / BSH
10.94
10.635
10.655
-0.0225
-0.21%
DEC ’22 Kansas City HRW
$ / BSH
10.74
10.45
10.4775
-0.045
-0.43%
MAR ’23 Kansas City HRW
$ / BSH
10.3525
#N/A
10.205
0
0.00%
MAR ’22 MLPS Spring Wheat
$ / BSH
0
#N/A
10.9925
0
0.00%
MAY ’22 MLPS Spring Wheat
$ / BSH
10.95
10.59
10.66
-0.0425
-0.40%
JUL ’22 MLPS Spring Wheat
$ / BSH
10.79
10.455
10.55
-0.02
-0.19%
SEP ’22 MLPS Spring Wheat
$ / BSH
10.5
10.185
10.47
0.185
1.80%
DEC ’22 MLPS Spring Wheat
$ / BSH
10.4075
10.2075
10.4075
0.1775
1.74%
JUN ’21 ICE Dollar Index
$
99.18
98.6
98.815
-0.209
-0.21%
AP ’21 Light Crude
$ / BBL
102.58
93.54
95.31
-7.7
-7.48%
MA ’21 Light Crude
$ / BBL
100.92
92.2
94.11
-7.07
-6.99%
APR ’22 ULS Diesel
$ /U GAL
3.26
2.973
3.0269
-0.2494
-7.61%
MAY ’22 ULS Diesel
$ /U GAL
3.1307
2.8692
2.9096
-0.242
-7.68%
APR ’22 Gasoline
$ /U GAL
3.1614
2.924
2.9749
-0.194
-6.12%
MAY ’22 Gasoline
$ /U GAL
3.1253
2.8948
2.9457
-0.1882
-6.01%
MAR ’22 Feeder Cattle
$ / CWT
0
#N/A
155.95
0
0.00%
APR ’22 Feeder Cattle
$ / CWT
0
#N/A
162.4
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
140.325
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
135.7
0
0.00%
APR ’22 Live Hogs
$ / CWT
0
#N/A
102.2
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
110.3
0
0.00%
MAR ’22 Class III Milk
$ / CWT
22.36
22.35
22.36
-0.04
-0.18%
APR ’22 Class III Milk
$ / CWT
23.99
23.99
23.99
0.09
0.38%
MAY ’22 Class III Milk
$ / CWT
24
#N/A
24.12
0
0.00%
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