Black Sea woes push U.S. grains higher.
Corn, soybeans and wheat all carve out substantial gains on Tuesday
With an estimated 190,000 Russian troops parked near the Ukrainian border, and as tensions between the two nations continue to escalate, Wall St. stumbled significantly in a selloff while grain prices ratcheted significantly higher on potential export disruptions in the Black Sea region. Winter wheat contracts showed the most upside on Tuesday, moving more than 5% higher by the close. Corn jumped more than 3.25% higher, with soybeans rising nearly 2.5% today.
Most parts of the Midwest and Plains will see at least some measurable precipitation between Wednesday and Saturday, with the greatest amounts falling on the Ohio River Valley, according to the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally cool conditions for the eastern Corn Belt between March 1 and March 7, with wetter-than-normal weather heading for the High Plains and upper Midwest.
Russian aggression against Ukraine triggered a selloff on Wall St. that pushed the Dow down 611 points in afternoon trading to 33,467. President Biden announced earlier today that the U.S. would impose sanctions against separatist regions of Ukraine, and the European Union will likely follow suit. Energy futures climbed higher, with crude oil up 1.5% this afternoon to move back above $92 per barrel. Diesel also rose 1.5% higher, with gasoline up 1.75%. The U.S. Dollar firmed slightly.
On Friday, commodity funds were net buyers of corn (+5,000), soybeans (+3,000) and soyoil (+2,000), but funds were net sellers of soymeal (-1,000) and roughly even when trading CBOT wheat contracts.
Corn
Corn prices saw substantial upside on Tuesday as Ukraine (one of the world’s top exporters) continues to be embroiled in an escalating conflict with Russia. Prices have moved consistently higher (with a few exceptions along the way) since last September. Today, March futures climbed 22 cents to $6.7625, with May futures up 21.25 cents to $6.74.
Corn basis bids were steady to firm after tracking 1 to 5 cents higher across four Midwestern locations on Tuesday.
Corn export inspections made moderate improvements in the week through February 17, reaching 62.1 million bushels. That was toward the higher end of trade estimates, which ranged between 39.4 million and 68.9 million bushels. China was the No. 1 destination, with 21.9 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately trailing last year’s pace, with 852.0 million bushels.
Per the latest data from the European Commission, 2021/22 EU corn imports are at 415.3 million bushels through February 20, which is slightly below year-ago results of 424.8 million bushels.
Taiwan issued an international tender to purchase 2.6 million bushels of animal feed corn sourced from the United States, South America or South Africa. The deadline for offers is on Friday, and the grain is for shipment in May or early June.
It’s not too early to set up some meetings and get your team on the same page ahead of planting season, according to Darren Frye, CEO of Water Street Solutions. “The first that comes to mind is what the farm’s goals are for the upcoming crop year – and then to break it down further to the specific goals for planting season that will help make those bigger goals possible,” he says. “Then you can go to a level of further detail into what expectations will be like during planting season.” Frye offers more advice in his latest Finance First column – click here to learn more.
Preliminary volume estimates were for 444,168 contracts, tracking moderately above Friday’s final count of 342,595.
Soybeans
Soybean prices followed a broad range of commodities higher today – most notably corn, wheat and crude oil. Lingering questions about the true production potential of the South American crop this season continues to lend additional support. March futures jumped 39.25 cents to $16.4075, with May futures up 37.5 cents to $16.41.
Soybean basis bids were mostly steady across the central U.S. on Tuesday but did track 2 cents higher at an Ohio elevator and firm 3 cents at an Illinois river terminal today.
Private exporters announced to USDA the sale of 4.9 million bushels of soybeans for delivery to China during the 2022/23 marketing year, which begins September 1.
Soybean export inspections took a modest step lower from a week ago, sliding to 35.8 million bushels. That was also toward the lower end of analyst estimates, which ranged between 33.1 million and 45.9 million bushels. China was the No. 1 destination, with 11.2 million bushels. Cumulative totals for the 2021/22 marketing year are still noticeably behind last year’s pace, reaching 1.462 billion bushels.
Brazil’s Anec estimates that he country’s February soybean exports will total 264.6 million bushels, which is slightly above the projection it made a week ago. Anec also estimates that Brazilian corn exports will reach 72 million bushels this month.
European Union soybean imports during the 2021/22 marketing year have reached 318.2 million bushels, which is moderately below last year’s pace so far. EU soymeal imports are also down year-over-year, with 10.51 million metric tons.
Amid tightening supplies, China plans to auction some of its state soybean reserves, although it did not immediately provide exact timing and volume. “Soybean arrivals in February might be lower than previously estimated while arrivals won’t be big in March either. The situation could last until April,” according to agricultural analyst at Mysteel, Zhu Rongping.
Preliminary volume estimates were for 326,462 contracts, which was 38% higher than Friday’s final count of 236,545.
Wheat
Wheat prices trended significantly higher after escalating tensions in the Black Sea region could put export logistics in jeopardy for both Russia and Ukraine – two of the world’s top wheat exporters. March Chicago SRW futures rose 42.75 cents to $8.3975, March Kansas City HRW futures climbed 44 cents to $8.7925, and March MGEX spring wheat futures gained 18.5 cents to $9.7925.
Private exporters announced the sale of 4.4 million bushels of hard red winter wheat to Nigeria. Half of that total is for delivery during the 2021/22 marketing year, which began September 1, and the other half is for delivery in 2022/23.
Wheat export inspections improved moderately week-over-week, moving to 19.8 million bushels. That was also better than the entire range of trade guesses, which came in between 7.3 million and 17.5 million bushels. Japan was the No. 1 destination, with 3.3 million bushels. Cumulative totals for the 2021/22 marketing year are still running moderately behind last year’s pace, with 552.9 million bushels.
European Union soft wheat exports during the 2021/22 marketing year reached 649.6 million bushels through February 20, tracking slightly above the prior year’s pace so far. EU barley exports are also slightly higher year-over-year, with 237.5 million bushels.
Preliminary volume estimates were for 198,204 CBOT contracts, trending well above Friday’s final count of 117,551.
Settlement Prices for Key Commodities
High
Low
Last
Change
Corn $/bushel
22-Mar
676.75
657.75
674.75
22
22-May
674.5
656.25
672.5
21.25
Soybeans
22-Mar
1641.25
1602.25
1635
39.25
22-May
1641
1603.5
1635
37.5
Soymeal $/ton
22-May
452.3
443
450.8
6.4
Soyoil cents/lb
22-May
70.46
67.9
70.06
2.8
Wheat $/bushel
22-Mar
846.25
803
844.25
42.75
22-May
854
810.75
852.5
44.5
KC Wheat
22-Mar
884.5
845.75
881.75
44
22-May
889.75
850.5
887
44.5
MPLS Wheat
22-Mar
990.5
962.5
985.75
18.5
22-May
992.25
965
987.75
19.5
Live Cattle cents/lb
22-Feb
144.075
143
143.625
0.375
Feeder Cattle cents/lb
22-Apr
170.95
168.575
169.275
-1.575
Lean Hogs cents/lb
22-Apr
115.875
113.3
115.875
2.525
Crude Oil $/barrel
*Energy prices may not represent final settlements
22-Mar
96
90.35
92.27
1.2
Diesel
22-Mar
2.9098
2.76
2.808
0.0265
Unleaded Gasoline $/gallon
22-Mar
2.802
2.65
2.709
0.0394
Natural Gas
22-Apr
4.746
4.409
4.454
0.077
U.S. Dollar Index
22-Mar
96.25
95.83
96.01
-0.01
Gold $/ounce
22-Mar
1916.8
1888.7
1903.4
4.8
Copper
22-Feb
4.5195
4.5195
4.5195
0
Fertilizer Swaps
(as of 02/18)
DAP Tampa-index
835.0
25
DAP-New Orleans
837.8
33
Urea-New Orleans
584.2
-22
Urea-Middle East
600.0
-65
Urea-Black Sea
550.0
-110
UAN (32%) New Orleans
606.3
0
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