Grains were mixed but mostly higher as traders continue to assess geopolitical turmoil in the Black Sea region, weather trends in South America, and more. Wheat prices jumped 4% to 5.5% higher on the heels of new Russian export restrictions and the possibility of Ukraine’s planted acres dropping by nearly 40% this season. Corn prices were also firm, moving back into the green after incurring moderate overnight losses. Soybeans failed to follow suit, as worries over Chinese demand pushed prices moderately lower.
Rainy weather is coming to parts of the Corn Belt later this week, with some areas set to gather as much as 1″ between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook still calls for seasonally wet weather for most areas east of the Mississippi River between March 22 and March 28, with widespread warmer-than-normal conditions for much of the Midwest and Plains.
On Wall St., the Dow firmed 353 points in afternoon trading to 33,298. Investors are still monitoring inflation trends and largely expect to see the Federal Reserve to raise interest rates for the first time since 2018. Energy futures continue to move significantly lower, with crude oil down 6% this afternoon to fall below $97 per barrel. Diesel tumbled 7% lower, with gasoline down around 5%. The U.S. Dollar firmed slightly.
On Monday, commodity funds were net buyers of soymeal (+4,500) contracts but were net sellers of corn (-12,500), soybeans (-2,500), soyoil (-7,000) and CBOT wheat (-1,000).
Corn
Corn prices made moderate inroads Tuesday as supply and demand fundamentals continue to be bullish in the short term, especially with an expected drop in Ukraine acres this season. Spillover strength from surging wheat prices lent additional support. May futures rose 9.5 cents to $7.5775, with July futures up 4 cents to $7.2250.
Corn basis bids held steady across most Midwestern locations on Tuesday but did tilt 5 cents higher at an Indiana ethanol plant today.
Per the latest data from the European Commission, EU corn imports during the 2021/22 marketing year have reached 464.2 million bushels through March 13, trending slightly higher year-over-year.
Meantime, grain trade association Coceral slightly raised its estimates for EU +UK corn production this season to 2.649 billion bushels. Coceral also raised its estimates for 2021/22 EU + UK wheat production to 5.192 billion bushels.
South Korea purchased 2.6 million bushels of animal feed corn from optional origins in a private deal that closed earlier today. The grain is for arrival around June 15. Another South Korean feedmill group purchased an additional 7.9 million bushels of animal feed corn from optional origins in an international tender that closed today. That grain is for shipment starting in late May.
Commodity prices may be volatile, but they aren’t irrational, argues grain market analyst Bryce Knorr. “Futures appear to be expressing the best guess about the meaning of the numbers and news flow,” he says. “Not that assessing this reality is easy.” Knorr served up plenty more analysis in yesterday’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 170,198 contracts, sliding slightly below Monday’s final count of 186,921.
Soybeans
Soybean prices drifted moderately lower as reports of more coronavirus cases in China created fresh demand worries, especially with factory lockdowns happening in some areas. May futures dropped 13.5 cents to $16.57, with July futures down 13 cents to $16.3375.
Soybean basis bids trended 5 cents higher at an Indiana processor while dropping 5 cents lower at two other Midwestern locations and holding steady elsewhere across the central U.S. on Tuesday.
The National Oilseed Processors Association (NOPA) reported the U.S. total soybean crush in February fell to a five-month low of 165.057 million bushels. That was down 9.4% from January but up 6.4% from last February. It was also fractionally higher than analysts had expected, offering an average trade guess of 165.024 million bushels. Soyoil stocks increased to 2.059 billion pounds, reaching the highest levels since April 2020.
European Union soybean imports during the 2021/22 marketing year have reached 349.8 million bushels through March 13, which is trending 8.5% below last year’s pace so far. Soymeal imports are also down from a year ago, with 11.59 million metric tons.
One of the realities of huge price swings is bad pricing decisions become much more amplified, warns Dave Fogel, vice president of Advance Trading. In particular, Fogel explores the controversial topic of managed marketing pools in today’s Ag Marketing IQ blog – click here to learn more.
Preliminary volume estimates were for 106,953 contracts, which was slightly below Monday’s final count of 116,599.
Wheat
Wheat prices captured substantial gains after Russia announced a ban on grain exports through the end of the current marketing year. That triggered a round of technical buying that lifted most contracts more than 5% higher by the close. May Chicago SRW futures climbed 61 cents to $11.5725, May Kansas City HRW futures rose 61 cents to $11.61, and May MGEX spring wheat futures gained 41.5 cents to $11.1175.
As expected, Russia is now banning exports of wheat, rye, barley and corn to members of the Eurasian Economic Union through the end of June. A government statement indicated the move was “to protect the domestic food market in the face of external constraints.” Meantime, Russian deputy prime minister Viktoria Abramchenko told citizens there was not a risk of food shortages and urged them not to engage in panic buying: “It is not worth driving up artificial demand with purchases for the future.”
European Union soft wheat exports during the 2021/22 marketing year reached 701.4 million bushels through March 13, which is trending slightly below last year’s pace so far. EU barley exports are also down slightly year-over-year, with 257.2 million bushels.
Ukrainian consultancy APK-Inform expects to see planted acres this spring drop 39% due to the Russian invasion and “ongoing and active hostilities in many regions.” APK-Inform also reports that up to 4.94 million acres of winter wheat, barley and rye may be damaged or unavailable to harvest – a loss of 28% for those crops.
U.S. and Canadian shippers are increasingly concerned that Canada’s second-largest railway will see stoppages due to a possible worker strike. A prior labor strike in 2019 lasted eight days, with recovery dragging out for several weeks. Canada ships massive amounts of grain, potash and coal via rail.
Japan issued a regular tender to purchase 3.8 million bushels of food-quality wheat from the United States, Canada and Australia that closes on Thursday. Of the total, 24% is expected to be sourced from the U.S. The grain is for shipment between April 21 and May 20.
South Korea purchased 2.0 million bushels of animal feed wheat from optional origins in a private deal that recently closed. The grain is for shipment in May.
Preliminary volume estimates were for 76,899 CBOT contracts, tracking below Monday’s final count of 98,705.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-May
752
725.5
728.25
-36.25
22-Jul
767.5
740
748.25
-17.5
Soybeans
22-May
1710
1705
1687.25
-3.5
22-Jul
1697.75
1667
1670.5
-2.75
Soymeal $/ton
22-Jul
491.6
480.3
484.3
8.1
Soyoil cents/lb
22-Jul
77.22
73.8
73.95
-2.21
Wheat $/bushel
22-May
746
1090
0
22-Jul
1148.75
1064
1096.25
-14.25
KC Wheat
22-May
1079.25
22-Jul
1138.25
1051.5
1100
5.25
MPLS Wheat
22-May
1099.25
22-Jul
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-Jun
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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Afternoon report: Corn also firm on Tuesday, with soybeans facing moderate losses.
