Afternoon report: Corn and soybeans sputter on Monday, while wheat trends higher.
The latest happenings in the Black Sea region led to mixed results for grain prices to start the week. Details were thin, but talks of a ceasefire between Ukraine and Russia put corn prices on their heels Monday. Soybeans suffered some spillover weakness, taking on modest losses by the close. And wheat prices finished with mixed results after another volatile session today left traders wondering whether Russia will end up banning grain exports for the rest of this marketing year.
Scattered rain and snow will be possible through parts of the Midwest and Plains between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. No areas are expected to see massive amounts of moisture later this week, however. NOAA’s 8-to-14-day outlook predicts seasonally wet weather for most areas east of the Mississippi River between March 21 and March 27, with warmer-than-normal conditions building in parts of the Northern Plains and Corn Belt during this time.
On Wall St., the Dow moved 450 points higher this morning but reversed into a 45-point loss in afternoon trading to 32,898. Volatility remains the norm as the market attempts to assess the latest headlines coming out of Ukraine and Russia. Negotiations continued between the two countries but few details were released today. Energy futures saw significant cuts, with crude oil tumbling nearly 6% lower to fall back below $103 per barrel. Diesel and gasoline each faded around 4% lower. The U.S. Dollar softened moderately.
On Friday, commodity funds were net buyers of corn (+5,500), soyoil (+4,000) and CBOT wheat (+2,000) contracts but were net sellers of soybeans (-3,500) and soymeal (-3,000).
Corn
Corn prices trended significantly lower on Monday after hopes for a ceasefire between Ukraine and Russia triggered a round of technical selling. Ukraine is one of the world’s top corn exporters but has been severely hampered during the ongoing Russian invasion. March futures tumbled 26.25 cents to $7.2825, with May futures down 17.5 cents to $7.6250.
Corn basis bids jumped 2 to 10 cents higher at three interior river terminals while eroding 9 cents lower at an Ohio elevator and holding steading elsewhere across the central U.S. on Monday.
Private exporters announced to USDA the sale of 6.3 million bushels of corn for delivery to Mexico during the 2021/22 marketing year, which began September 1.
Corn export inspections retreated moderately below last week’s tally, to 45.1 million bushels. Analysts were generally expecting a bigger haul, with trade guesses coming in between 39.4 million and 65.0 million bushels. China was the No. 1 destination, with 13.2 million bushels. Cumulative totals for the 2021/22 marketing year are currently trailing last year’s pace by around 168 million bushels, with a total of 1.021 billion bushels.
Brazilian farmers in the country’s Center South region have planted 94% of their intended second corn crop acres through March 13, according to consultancy AgRural. That’s 20 points above last year’s pace. Brazil’s second corn crop accounts for up to 75% of its total corn production in a given season. Governmental estimates are currently at 4.421 billion bushels.
Spain announced it will approve emergency purchases of animal feed corn sourced from the United States and Argentina to fill supply gaps due to disruptions stemming from Russia’s invasion of Ukraine. The country typically depends heavily on Ukrainian corn imports.
Preliminary volume estimates were for 186,921 contracts, which was slightly below Friday’s final count of 201,246.
Soybeans
Soybean prices tested moderate gains at times during today’s choppy session but ultimately succumbed to some net technical selling that led to small losses by the close. March futures dropped 3.5 cents to $16.8725, with May futures down 2.75 cents to $16.7325.
Soybean basis bids were steady to mixed after rising 1 to 15 cents at three interior river terminal and sliding 7 cents lower at an Ohio elevator on Monday.
Soybean export inspections inched fractionally higher week-over-week, reaching 28.4 million bushels. That was toward the higher end of trade estimates, which ranged between 22.0 million and 32.2 million bushels. China topped all destinations, with 14.3 million bushels. Cumulative totals for the 2021/22 marketing year are still well below last year’s pace, with 1.549 billion bushels.
Argentina is now restricting export sales of soymeal and soyoil, drawing criticism from its agricultural sector. In a typical month, Argentina exports 1.5 million metric tons of soymeal and 300,000 MT of soyoil and accounts for 41% to 48% of total global exports of these commodities. The move may prove beneficial for U.S. and Brazilian exporters. “Buyers have no choice but to reduce consumption or go to alternative sources for supplies,” a Singapore-based trader told Reuters.
Brazil’s Safras & Mercado expects the country’s 2022 soybean exports to reach 2.866 billion bushels, which would be a year-over-year decrease of 9.4%, if realized. Brazil’s 2022 soybean crush is expected to increase slightly from last year, reaching 1.745 billion bushels.
Preliminary volume estimates were for 116,599 contracts, tracking slightly below Friday’s final count of 138,612.
Wheat
Wheat prices initially firmed on expectations that Russia could block grain exports through the end of the 2021/22 marketing year, which would have a major impact on subsequent global supplies. However, prices ultimately couldn’t hold their head above water today, finishing a volatile session with mixed results. May Chicago SRW futures dropped 14.25 cents to $10.9225, May Kansas City HRW futures added 5.25 cents to $10.9450, and May MGEX spring wheat futures slipped 2.75 cents to $10.6750.
Wheat export inspections faded moderately lower from the prior week, falling to 10.4 million bushels. That was also below the entire range of trade guesses, which came in between 11.0 million and 20.2 million bushels. Mexico was the No. 1 destination, with 3.5 million bushels. Cumulative totals for the 2021/22 marketing year continue to slide further below last year’s pace, reaching 595.0 million bushels.
Despite significant supply chain disruptions, Russian consultancy Sovecon still estimates that the country will export 58.8 million bushels of wheat in March, which would be the lowest monthly total since last May, if realized. Russian corn exports are expected to fall to the lowest level since last September, at 3.9 million bushels. Exports at all five of Russia’s Black Sea grain export terminals are “ongoing,” according to the IKAR consultancy.
However, the Interfax news agency reported just today that Russia may suspend wheat, barley, corn and rye exports between March 15 and June 30. “An actual Russian export ban would be a big game changer. The markets had been hoping and expecting that any ceasefire in Ukraine would have resulted in a quick resumption of full Russian exports from the Black Sea,” one European trader told Reuters.
Turkey issued an international tender to purchase 9.9 million bushels of milling wheat from optional origins that closes on March 17. Turkey has been scrambling to secure additional supplies in recent months – the country typically sources 75% of its wheat purchases from Ukraine and Russia.
Preliminary volume estimates were for 98,705 CBOT contracts, shifting slightly below Friday’s final count of 111,877.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Mar
752
725.5
728.25
-36.25
22-May
767.5
740
748.25
-17.5
Soybeans
22-Mar
1710
1705
1687.25
-3.5
22-May
1697.75
1667
1670.5
-2.75
Soymeal $/ton
22-May
491.6
480.3
484.3
8.1
Soyoil cents/lb
22-May
77.22
73.8
73.95
-2.21
Wheat $/bushel
22-Mar
746
1090
0
22-May
1148.75
1064
1096.25
-14.25
KC Wheat
22-Mar
1079.25
22-May
1138.25
1051.5
1100
5.25
MPLS Wheat
22-Mar
1099.25
22-May
1105.25
1044.5
1070.25
-2.75
Live Cattle cents/lb
22-Apr
140.9
137.4
140.35
3.05
Feeder Cattle cents/lb
22-Apr
163.425
158.3
162.425
4.45
Lean Hogs cents/lb
22-May
110.55
108.65
109.875
-0.275
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Apr
109.72
99.76
101.55
-7.78
Diesel
22-Apr
3.4404
3.2189
3.2442
-0.1734
Unleaded Gasoline $/gallon
22-Apr
3.325
3.0971
3.136
-0.1761
Natural Gas
22-May
4.797
4.555
4.687
-0.079
U.S. Dollar Index
22-Mar
99.255
98.74
98.925
-0.205
Gold $/ounce
22-Apr
1994.8
1952
1964.7
-18
Copper
22-Mar
4.6005
4.4965
4.497
-0.119
Fertilizer Swaps
(as of 03/11)
DAP Tampa-index
895.0
27.5
DAP-New Orleans
1,047.2
68.89
Urea-New Orleans
901.1
168
Urea-Middle East
1,002.5
172
Urea-Black Sea
585.0
35
UAN (32%) New Orleans
661.4
52.36
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