Morning report: Has a resolution been found for Ukrainian grain? Turkey, Russia says, “yes” but Ukraine, markets say, “not likely.” (Comments are updated by 7:30 a.m. Central Time.)
Corn up 4-11 cents
Soybeans up 13-24 cents; Soymeal up $5.40/ton; Soyoil up $1.16/lb
Chicago wheat up 8-9 cents; Kansas City wheat up 9-10 cents; Minneapolis wheat up 11-13 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!
Export results out yesterday
The U.S. Census Bureau released its monthly report on export volumes and revenues for April 2022 yesterday morning. This information is important because it is the primary export metric used by USDA’s World Agricultural Outlook Board (WAOB) when forecasting the World Agricultural Supply and Demand Estimates (WASDE) report every month.
So what were the big takeaways from yesterday’s report?
Corn cashes in: April 2022 corn exports generated $2.28 billion in revenues – the third largest monthly haul from corn exports on record. Only March 2021 ($2.41B) and May 2021 ($2.36B) were higher. It was also the highest monthly revenue for corn exports in the 2021/22 marketing year.
But corn export volumes dipped in April 2022, meaning that the lucrative earnings were due largely to higher corn prices, not higher corn volumes. April 2022’s corn export paces were nothing to sleep on, though. At 275 million bushels, the latest month’s shipping volume was the ninth largest on record.
Still, April 2022 corn export volumes were 60 million bushels lower (18%) than those of April 2021, which notched the second largest volume on record. Tightening corn supplies mean that the U.S. simply does not have the bushels needed to satiate both domestic and international corn demand. Plus, the uptick in prices and a stronger dollar make U.S. corn a less attractive option on the world market.
Soybeans enjoy unseasonal uptick:A short South American soy crop and continued Chinese demand paid dividends for soybean producers and exporters in April. The Census Bureau reported that soybean shipments generated $2.40 billion over the month, up 22% from the previous month’s volumes and blowing the old April high set in 2012 (a very cute $1.11 billion, relatively speaking) out of the water.
While price also played a factor in the extra revenues, the increase in volume was also significant. Exporters shipped 134.4 million bushels of soybeans in April 2022, a 15% increase from March. April soy shipment volumes have averaged 78.4 million bushels per month over the past five years, so this April 2022 reading is as rare as it is high.
To be sure, the volumes and revenues pale in comparison to post-harvest highs typically set during the fall months when more seasonal buyers ramp up purchases in hopes of a supply-induced discount. But U.S. soy shipping volumes are typically low during the spring months as buyers snap up South American bushels, so yesterday’s findings with the staggering April export volumes and revenues were truly remarkable.
Wheat’s seasonal surge begins after struggles: April 2022 wheat volumes and revenues both inched up from the previous month. April is historically the beginning of peak wheat export season, which typically lasts until late September.
Wheat export volumes have been notably lower in the aftermath of Russia’s invasion on Ukraine, and this month’s report highlighted that fact. High global wheat prices, long shipping lags, high transport costs, and a stronger dollar have limited U.S. wheat’s attractiveness on the global market. But as harvest begins, there is still hope that tight global supplies will send international wheat buyers to U.S. shores.
April 2022 wheat exports generated $750 million in revenue, up 14% from the previous month on surging prices. Volumes increased 2.3% on the month to 64.3 million bushels. It was the smallest monthly volume reading for April wheat exports since April 2009 as marketing year-to-date wheat export volumes currently trail last year’s paces by nearly 17%.
Russia & Ukraine
Russian missiles struck a commodity storage facility close to the Black Sea port of Mykolaiv this weekend. It was not clear if the facility housed grain or sunflower meal. Mykolaiv and Odessa were Ukraine’s two largest grain shipping facilities prior to the war’s onset.
For more on the infrastructure damage Russian military forces have inflicted on the Ukrainian infrastructure system, check out this article from the Wall Street Journal.
As food security concerns continue to dominate international headlines, Russia again insisted overnight that international banking sanctions be lifted from its financial institutions to allow its bumper wheat crop to be accessed easily and affordably on the world market. A Reuters report finds that “no substantiative discussions” about lifting sanctions were ongoing, according to Kremlin spokesman Dmitry Peskov.
Turkish foreign minister Mevlut Cavusoglu used blessings from the United Nations to broker a deal to resume Ukrainian grain flows overnight between Ukraine and Russia. Cavusoglu met with Russian Foreign Minister Sergei Lavrov in Ankara, Turkey to negotiate a deal in Ukraine that would be favorable – for Russia.
Any deal would necessitate a Turkish naval escort for any cargoes departing from Ukrainian Black Sea ports that are currently under blockade from the Russian Navy and fields of underwater mines. Cargoes would then continue on to Turkey – the world’s fourth largest wheat importer and holder of NATO’s second largest army – and then likely on to other global destinations.
“Various ideas have been put out for the export of Ukrainian grains to the market and most recently is the U.N. plan (including) a mechanism that can be created between the U.N., Ukraine, Russia and Turkey,” Cavusoglu said.
“We see it as reasonable. Of course, both Ukraine and Russia must accept it.”
Lavrov continued to blame Ukraine for mining the Black Sea, accusing Ukrainian President Volodymyr Zelenskiy of “categorically refusing” to de-mine the ports.
“We state daily that we’re ready to guarantee the safety of vessels leaving Ukrainian ports and heading for (Turkish waters), we’re ready to do that in cooperation with our Turkish colleagues,” Lavrov said.
Ukraine’s grain traders union, UGA, publicly questioned the negotiations overnight, stipulating that the Turkish navy is not powerful enough to serve as an effective naval escort and guarantor for trapped Ukrainian grain cargoes.
“Turkey as a guarantor is an insufficient force in the Black Sea to guarantee the safety of cargo,” Serhiy Ivashchenko, director of Ukrainian grain traders union UGA, said overnight in an online grain conference.
Ivashchenko expects it will take two to three months to clear mines from Black Sea ports in Ukraine, calling for both Turkey and Romania’s navies to assist.
Meanwhile, UGA estimates that the country’s grain silos are over half-full as preparation begins for wheat harvest. Ivashchenko forecasts that 13-15 million metric tonnes of grain in the 20% of Ukraine occupied by Russian forces will be at risk of being stolen and sold by the Russians and called on the U.S., U.K., and France to assist cargo transport in the Black Sea amid the Russian naval blockade.
Oy.
Corn
Corn prices continued to climb overnight, thanks to strong demand signals. Weekly ethanol production data due out today from the EIA will provide insights as to whether or not last week’s 24-week production high will continue higher today, which would help keep today’s bull market running strong.
The ongoing conflict and negotiations regarding the Black Sea also played a bullish role in market pricing this morning. “Prices in the physical market are pretty firm,” a Singapore-based feed grains trader told Reuters. “Traders who had sold corn in tenders are covering positions.”
Nearby contract prices hovered just under the $7.70/bushel benchmark while 2022 crop contracts rose above the $7.20/bushel level – the highest corn prices the market has seen since the start of June 2022. Cash market prices are rising just as rapidly as domestic production accelerates.
Brazil’s weather forecast will likely continue to be hot and dry through the rest of the week, stressing the country’s safrinha (second) corn crop just before harvest. Brazil’s soybean crop was cut by nearly 700 million bushels since last December after a La Ni?a-induced drought devastated South American soybean crops earlier this winter.
The six to ten-day forecast for Brazil shows some relief, though it will likely be untimely. The forecast calls for cooler temperatures and rain showers, which could delay harvest activity in the country, causing further yield downgrades and potential quality issues.
Also – we don’t need to talk about Bruno La Ni?a any more than we’ve already had to over the past year or so. BUT – as we are starting hurricane season, it’s worth considering how La Ni?a could impact the farmgate in the coming months, especially if it is an active hurricane season at the U.S. Gulf during peak export season.
Soybeans: Soybean prices rose $0.11-$0.23/bushel overnight on commodity fund purchases and edible oil market supply concerns.
Wheat
Wheat prices rose $0.10-$0.16/bushel this morning as markets weighed the likelihood of a deal in the Black Sea that would allow Turkish ships to escort Ukrainian grain cargoes from the Russian naval blockade. The market was skeptical of the potential deal.
Wheat gains were capped by a rising dollar.
After banning wheat exports last month, India is making plans to allow 44 million bushels of wheat to be shipped in the coming weeks as ports are currently backlogged with wheat supplies following the initial ban.
Crop shortfalls and civil unrest in the African nation of Sudan are increasing global hunger concerns as negotiations for Black Sea grain supplies remain stalled.
Wheat prices have been on a tear lately thanks to uncertainty in the Black Sea as well as crop shortfall fears in the U.S. and France. Plus, global demand is continuing to rise amid astronomical prices. What does that mean for U.S. wheat producers gearing up for the 2022 harvest season?
I take a deep dive into these issues in my latest E-corn-omics column! Here’s a quick preview:
For growers who are able to salvage crops off of the drought-ravaged U.S. Plains, there are likely to be lucrative pricing opportunities available on the cash market in the coming weeks to satiate end users’ supply requirements. But a strengthening dollar may narrow the profit opportunity for growers this fall.
Will more acres be bought for winter wheat this fall? The price incentive certainly encourages it, though other economic factors may sway growers’ decisions.
High input costs and strong profit forecasts for competing crops could once again deter acreage decisions away from wheat. Pencil out the costs – and don’t be surprised if they are higher this year – and potential revenues as harvest wraps up on your farm to determine if the payoff from early sales and input purchases justify a profitable outlook for more wheat acres in the 2023 season.
Weather
Yesterday’s showers over the Plains are shifting east into the Mississippi River Valley and Great Lakes region today, according to NOAA’s short-range forecasts. The showers will inch into the Eastern Corn Belt by this afternoon.
Warm temperatures forecast today should help encourage crop development, especially for corn crops and early planted soybeans. Rainfall over the next 24 hours will likely be substantial, reaching up to 1.25 inches across the Eastern Corn Belt.
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 across the country.
What else I’m reading this morning on our website, FarmFutures.com
Advance Trading’s Brett Mapel has six summer marketing tips for growers to consider in the coming months. Spoiler alert – sunscreen is necessary for both outdoor activities AND locking in 2023 profit margins.
Purdue’s Ag Economy Barometer readings for May showed a decrease in producer sentiment as production costs and inflationary pressures climbed.
Bryce Knorr points out that summer lows may be in for fuel and fertilizer – and encourages growers to consider locking in input prices for Fall 2022 harvest and the 2023 growing season.
Darren Frye offers growers three helpful tips to ensure a successful marketing plan during times with extreme market volatility.
The U.S. EPA released eagerly anticipated biofuel blending targets last Friday. Policy editor Jacqui Fatka breaks down what that means for ethanol production and corn growers.
Morning Ag Commodity Prices – 6/8/2022
Contract
Units
High
Low
Last
Net Change
% Change
JUL ’22 CORN
$ / BSH
7.7
7.56
7.675
0.105
1.39%
SEP ’22 CORN
$ / BSH
7.34
7.23
7.3275
0.07
0.96%
DEC ’22 CORN
$ / BSH
7.225
7.125
7.21
0.07
0.98%
MAR ’23 CORN
$ / BSH
7.275
7.175
7.2625
0.0725
1.01%
MAY ’23 CORN
$ / BSH
7.2875
7.185
7.285
0.08
1.11%
JUL ’23 CORN
$ / BSH
7.2475
7.1775
7.2275
0.0625
0.87%
SEP ’23 CORN
$ / BSH
6.735
6.66
6.725
0.04
0.60%
JUL ’22 SOYBEANS
$ / BSH
17.53
17.265
17.495
0.2125
1.23%
AUG ’22 SOYBEANS
$ / BSH
16.74
16.5025
16.71
0.1725
1.04%
SEP ’22 SOYBEANS
$ / BSH
15.9575
15.7425
15.94
0.18
1.14%
NOV ’22 SOYBEANS
$ / BSH
15.69
15.46
15.66
0.1625
1.05%
JAN ’23 SOYBEANS
$ / BSH
15.725
15.5075
15.7125
0.1725
1.11%
MAR ’23 SOYBEANS
$ / BSH
15.5925
15.4225
15.5725
0.135
0.87%
MAY ’23 SOYBEANS
$ / BSH
15.5475
15.385
15.53
0.1175
0.76%
JUL ’23 SOYBEANS
$ / BSH
15.495
15.3475
15.495
0.1175
0.76%
AUG ’23 SOYBEANS
$ / BSH
15.18
15.18
15.18
0.0675
0.45%
JUL ’22 SOYBEAN OIL
$ / LB
82.83
81.45
82.57
1.13
1.39%
AUG ’22 SOYBEAN OIL
$ / LB
80.86
79.63
80.57
0.97
1.22%
JUL ’22 SOY MEAL
$ / TON
422.9
416.7
422.3
4.9
1.17%
AUG ’22 SOY MEAL
$ / TON
413.8
408.5
413.4
3.6
0.88%
SEP ’22 SOY MEAL
$ / TON
405.8
401.1
405.8
2.7
0.67%
OCT ’22 SOY MEAL
$ / TON
398.9
395.2
398.1
0.8
0.20%
DEC ’22 SOY MEAL
$ / TON
400.4
395.1
400.1
1.6
0.40%
JUL ’22 Chicago SRW
$ / BSH
10.89
10.6525
10.835
0.1175
1.10%
SEP ’22 Chicago SRW
$ / BSH
11.0175
10.7875
10.9725
0.1275
1.18%
DEC ’22 Chicago SRW
$ / BSH
11.1425
10.9125
11.0975
0.13
1.19%
MAR ’23 Chicago SRW
$ / BSH
11.24
11.0125
11.195
0.125
1.13%
MAY ’23 Chicago SRW
$ / BSH
11.265
11.0775
11.2425
0.1225
1.10%
JUL ’22 Kansas City HRW
$ / BSH
11.68
11.4325
11.625
0.1325
1.15%
SEP ’22 Kansas City HRW
$ / BSH
11.75
11.52
11.6975
0.135
1.17%
DEC ’22 Kansas City HRW
$ / BSH
11.8475
11.63
11.8
0.13
1.11%
MAR ’23 Kansas City HRW
$ / BSH
11.9075
11.715
11.86
0.1225
1.04%
MAY ’23 Kansas City HRW
$ / BSH
11.805
11.805
11.805
0.125
1.07%
JUL ’22 MLPS Spring Wheat
$ / BSH
12.4325
12.2375
12.43
0.1575
1.28%
SEP ’22 MLPS Spring Wheat
$ / BSH
12.41
12.2025
12.41
0.1625
1.33%
DEC ’22 MLPS Spring Wheat
$ / BSH
12.365
12.1925
12.365
0.135
1.10%
MAR ’23 MLPS Spring Wheat
$ / BSH
12.3425
12.2
12.3425
0.0875
0.71%
MAY ’23 MLPS Spring Wheat
$ / BSH
0
#N/A
12.205
0
0.00%
JUN ’21 ICE Dollar Index
$
102.78
102.33
102.37
0.045
0.04%
JU ’21 Light Crude
$ / BBL
121.37
119.3
120.55
1.14
0.95%
AU ’21 Light Crude
$ / BBL
119.04
117.02
118.27
1.17
1.00%
JUL ’22 ULS Diesel
$ /U GAL
4.3511
4.28
4.3321
0.0115
0.27%
AUG ’22 ULS Diesel
$ /U GAL
4.2405
4.1794
4.2257
0.0182
0.43%
JUL ’22 Gasoline
$ /U GAL
4.1789
4.0822
4.1522
-0.0055
-0.13%
AUG ’22 Gasoline
$ /U GAL
3.9967
3.9136
3.9711
-0.0077
-0.19%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
172.45
0
0.00%
SEP ’22 Feeder Cattle
$ / CWT
0
#N/A
174.75
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
133.725
0
0.00%
AU ’21 Live Cattle
$ / CWT
0
#N/A
134.125
0
0.00%
JUN ’22 Live Hogs
$ / CWT
0
#N/A
108.425
0
0.00%
JUL ’22 Live Hogs
$ / CWT
0
#N/A
109.275
0
0.00%
JUN ’22 Class III Milk
$ / CWT
24.44
#N/A
24.43
0
0.00%
JUL ’22 Class III Milk
$ / CWT
25.16
25.11
25.11
-0.05
-0.20%
AUG ’22 Class III Milk
$ / CWT
24.94
#N/A
25.01
0
0.00%
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