Soy climbs to 10-month highs on LatAm supply concerns. (Comments are updated by 7:30 a.m. Central Time.)
Corn, soy drift lower after yesterday’s rally on the Russian-Ukrainian conflict
Corn down 1-3 cents
Soybeans up 4-16 cents; Soymeal up $4.50; Soyoil up $0.87 /lb
Chicago wheat up 2-3 cents; Kansas City wheat up 1-2 cents; Minneapolis wheat down 1-2 cents
*Prices as of 7:00am CST.
Corn
Corn prices drifted $0.01-$0.03/bushel lower as profit takers swooped in to take the tops off of yesterday’s rally. However, losses were capped by ongoing supply concerns about South America’s corn crop as drought continues to ravage the region as well as ongoing Ukraine-Russia conflicts in the Black Sea region.
Soybeans
Soybean prices notched a fifth straight day of gains, rising $0.02-$0.14/bushel overnight on strengthening soyoil fundamentals and supply shortfalls in South America. The gains propelled the complex to the highest price point since last May.
Soyoil prices continued to rally higher this morning after India booked 100,000 metric tonnes of soyoil purchases last week for the 2021/22 marketing season as soy stocks in Brazil and Argentina continue to tighten.
Ongoing conflicts in Ukraine continue to pressure sunflower oil prices higher as the Black Sea region controls 76% of global sunflower oil exports. Markets now expect that vessel loading for sunflower exports out of Ukraine have now been delayed by at least a week.
Global edible oil markets were already under pressure leading up to Russia’s invasion of Ukraine after top palm oil producer Indonesia restricted its exports after production shortfalls due to labor shortages and supply chain issues. Soyoil supplies are currently at the sixth-tightest level on record and continue to tighten further as soybean production estimates in South America continue to dwindle following a La Nina-induced drought.
In this order, palm oil, soyoil, rapeseed oil, and sunflower oil are the top four edible oils produced around the world. But the recent supply disruptions have reduced production and squeezed buyers’ margins as prices continue to climb higher, further elevating soaring global food inflation metrics.
“Sunoil is right now the cheapest edible oil, but buyers are sceptical about delivery. They are moving towards soyoil and palm,” said Sandeep Bajoria, president of the International Sunflower Oil Association.
China’s agriculture minister, Tang Renjian, announced overnight that China would be planting “soybeans on every patch of land possible this year,” as soaring global edible oil prices pressure food prices in China higher.
“”We will make great efforts … to expand the production of soybeans and oilseeds. Each extra mu (land area) planted counts, and every jin (weight) harvested counts,” Tang said, reinforcing China’s “No. 1 Document” issued nearly a year ago that outlined the country’s plans to ensure domestic food security for its citizens.
The country’s focus will now turn to domestic soyoil production to offset global crop shortfalls and supply disruptions. “A bottle of oil should contain as much Chinese oil as possible,” Tang told reporters overnight.
And while any near-term plans for soyoil production expansion may not make a significant dent in global soyoil trade flows, market watchers should take note that China’s recent shift in perspective means that the world’s top grain buyer is likely to begin searching for ways to become less reliant on global grain, meat, and dairy purchases in the coming years.
“Maybe we’ll see half a million tonnes or a million tonnes more in production but in the grand scheme of things, it won’t change much,” Darin Friedrichs, co-founder of Shanghai-based consultancy Sitonia Consulting, told Reuters overnight.
“Even in the past six months, there has been much more focus on self-sufficiency and not much talk of imports.”
Wheat
Wheat markets were mixed this morning as traders weighed dry weather in the U.S. Plains against potential supply chain disruptions to grain flows in the Black Sea region this morning. Plus, a weaker dollar helped propel Chicago and Kanas City futures higher. Profit takers enjoyed yesterday’s highs in the Minneapolis market.
Ongoing military conflicts in the Black Sea will likely force global grain buyers to seek alternative sources, as evidenced by yesterday’s export announcement from USDA that Nigeria would purchase two shipments of hard red winter wheat from the U.S.
So far, the only shipment delays reported from the Black Sea have come from the sunflower oil market.
“We expect the main importers to return to active purchasing soon, as Ukraine has a significant share of the global agricultural market, with grain and vegoil supplies of a good quality and reasonable prices,” Ukrainian consultancy UkrAgroConsult wrote in an overnight note.
Weather
More bitter cold weather is in store for the Plains and Upper Midwest today, according to NOAA’s short-range forecasts. Snow showers are on the way for the Central and Southern Plains over the next 24 hours, with a chance of ice and rain likely to precede the system as it moves across the American Southeast.
Financials
Sanctions on Russia levied by the U.S. and other allies yesterday are not likely severe enough to deter Russia’s ongoing military action against Ukraine, even though Russian oligarchs have already lost $32 billion this year as Russia has moved to invade Ukraine.
At this point, a diplomatic solution to keep Russia out of Ukraine seems highly unlikely.
Earlier this morning, Ukraine declared a state of emergency as President Volodymyr Zelenskyy issued orders for military reservists to mobilize under threats of a potential war with Russia. Zelenskyy also urged Ukrainian citizens living in Russia to flee the country.
However, the “soft” sanctions lifted stock prices this morning as bargain buyers returned to markets after yesterday’s selloff that pushed S&P 500 futures into correction territory. S&P 500 futures traded 3.75 points higher (0.78%) at last glance to $4,333.75 on the sanctions fallout.
What else I’m reading this morning
Goldman Sachs is seeking ways to claw back lucrative bonuses paid to executives who leave the company. To quote Jamey Johnson, “the high cost of living ain’t nothing like the cost of living high.”
Also worth a read on our website, FarmFutures.com
Bryce Knorr offers farmers five ways to market new crop corn and soybeans.
Advance Trading’s J.D. Schuerman helps farmers reframe price prediction into risk management in a recent Ag Marketing IQ column.
Wintery weather may prevail this week, but spring is just around the corner. Water Street Solutions CEO Darren Frye recommends making sure your team is on the same page going into planting season and offers tips to help in the latest Finance First column.
Roger Wright explains why prices change after a hedge-to-arrive contract rolls.
Darren Frye explains how elevators make money in the latest Finance First column.
Morning Ag Commodity Prices – 2/23/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAR ’22 CORN
$ / BSH
6.7425
6.6925
6.7175
-0.03
-0.44%
MAY ’22 CORN
$ / BSH
6.72
6.675
6.6975
-0.0275
-0.41%
JUL ’22 CORN
$ / BSH
6.65
6.6075
6.6325
-0.02
-0.30%
SEP ’22 CORN
$ / BSH
6.2125
6.1775
6.205
-0.005
-0.08%
DEC ’22 CORN
$ / BSH
6.0675
6.0125
6.0575
0
0.00%
MAR ’23 CORN
$ / BSH
6.13
6.0875
6.125
-0.0025
-0.04%
MAY ’23 CORN
$ / BSH
6.16
6.1275
6.16
-0.0025
-0.04%
MAR ’22 SOYBEANS
$ / BSH
16.55
16.365
16.48
0.13
0.80%
MAY ’22 SOYBEANS
$ / BSH
16.535
16.36
16.4525
0.1025
0.63%
JUL ’22 SOYBEANS
$ / BSH
16.4875
16.31
16.405
0.1025
0.63%
AUG ’22 SOYBEANS
$ / BSH
16.0625
15.9
15.995
0.095
0.60%
SEP ’22 SOYBEANS
$ / BSH
15.2875
15.1475
15.2375
0.0775
0.51%
NOV ’22 SOYBEANS
$ / BSH
14.85
14.6925
14.7875
0.055
0.37%
JAN ’23 SOYBEANS
$ / BSH
14.8325
14.685
14.7675
0.045
0.31%
MAR ’23 SOYBEANS
$ / BSH
14.55
14.4375
14.4925
0.0325
0.22%
MAY ’23 SOYBEANS
$ / BSH
14.4375
14.385
14.385
0.0225
0.16%
MAR ’22 SOYBEAN OIL
$ / LB
71.33
70.11
70.89
0.74
1.05%
MAY ’22 SOYBEAN OIL
$ / LB
71.2
70
70.76
0.7
1.00%
MAR ’22 SOY MEAL
$ / TON
459.6
453.8
458.3
4.6
1.01%
MAY ’22 SOY MEAL
$ / TON
455.9
450.5
454.4
3.6
0.80%
JUL ’22 SOY MEAL
$ / TON
454.2
449
452.6
3
0.67%
AUG ’22 SOY MEAL
$ / TON
444.1
440.7
442.6
1.9
0.43%
SEP ’22 SOY MEAL
$ / TON
431.6
427.3
430.5
1.8
0.42%
MAR ’22 Chicago SRW
$ / BSH
8.47
8.34
8.4625
0.02
0.24%
MAY ’22 Chicago SRW
$ / BSH
8.56
8.4275
8.5475
0.0225
0.26%
JUL ’22 Chicago SRW
$ / BSH
8.5025
8.39
8.4925
0.0175
0.21%
SEP ’22 Chicago SRW
$ / BSH
8.4775
8.3875
8.47
0
0.00%
DEC ’22 Chicago SRW
$ / BSH
8.4975
8.4075
8.4875
-0.0075
-0.09%
MAR ’22 Kansas City HRW
$ / BSH
8.83
8.7125
8.83
0.0125
0.14%
MAY ’22 Kansas City HRW
$ / BSH
8.885
8.7675
8.88
0.01
0.11%
JUL ’22 Kansas City HRW
$ / BSH
8.8825
8.7675
8.865
0
0.00%
SEP ’22 Kansas City HRW
$ / BSH
8.8825
8.785
8.8725
-0.01
-0.11%
DEC ’22 Kansas City HRW
$ / BSH
8.92
8.845
8.9025
-0.035
-0.39%
MAR ’22 MLPS Spring Wheat
$ / BSH
9.85
9.76
9.85
-0.0075
-0.08%
MAY ’22 MLPS Spring Wheat
$ / BSH
9.87
9.765
9.8625
-0.015
-0.15%
JUL ’22 MLPS Spring Wheat
$ / BSH
9.8375
9.74
9.8375
0
0.00%
SEP ’22 MLPS Spring Wheat
$ / BSH
9.565
9.505
9.5625
-0.005
-0.05%
DEC ’22 MLPS Spring Wheat
$ / BSH
9.505
9.4625
9.4975
-0.02
-0.21%
MAR ’21 ICE Dollar Index
$
96.11
95.85
95.92
-0.091
-0.09%
AP ’21 Light Crude
$ / BBL
92.37
90.64
91.58
-0.33
-0.36%
MA ’21 Light Crude
$ / BBL
90.84
89.34
90.26
-0.13
-0.14%
MAR ’22 ULS Diesel
$ /U GAL
2.8209
2.7742
2.7988
-0.02
-0.71%
APR ’22 ULS Diesel
$ /U GAL
2.7984
2.7521
2.7775
-0.013
-0.47%
MAR ’22 Gasoline
$ /U GAL
2.7362
2.6942
2.7185
0.0077
0.28%
APR ’22 Gasoline
$ /U GAL
2.882
2.8374
2.8631
0.0088
0.31%
MAR ’22 Feeder Cattle
$ / CWT
0
#N/A
164.225
0
0.00%
APR ’22 Feeder Cattle
$ / CWT
0
#N/A
169.125
0
0.00%
FE ’21 Live Cattle
$ / CWT
0
#N/A
143.75
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
146.025
0
0.00%
APR ’22 Live Hogs
$ / CWT
0
#N/A
112.075
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
115.65
0
0.00%
FEB ’22 Class III Milk
$ / CWT
20.88
#N/A
20.89
0
0.00%
MAR ’22 Class III Milk
$ / CWT
22.46
22.46
22.46
0
0.00%
APR ’22 Class III Milk
$ / CWT
22.86
22.86
22.86
0
0.00%
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