Morning report: Corn tops $8/bushel on Midwestern rains and Ukrainian concerns. (Comments are updated by 7:30 a.m. Central Time.)
Corn up 3-7 cents
Soybeans up 8-12 cents; Soymeal down $5.30/ton; Soyoil up $2.78/lb
Chicago wheat up 1-2 cents; Kansas City wheat up 6-7 cents; Minneapolis wheat up 2-7 cents
*Prices as of 6:50am CDT.
Feedback from the Field is back! Our Feedback from the Field series is live for the 2022 season! 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!
Corn
Corn prices rose $0.03-$0.07/bushel overnight, with the nearby contracts topping the $8/bushel benchmark on continued wetness in the Midwest and concerns about the future of Ukrainian corn exports. Warmer Midwestern temperatures this weekend somewhat offset forecasts for scattered showers in the region over the next couple days.
Some of corn’s price strength was supported by gains in the soybean market following overnight shakeups in the global edible oils complex. Yesterday, the International Grains Council forecasted global corn production for 2022/23 at 47.1 billion bushels – a 1% reduction from its previous estimates to account for shrinking crop sizes expected from the U.S. and Ukraine.
Somewhat unsurprisingly, Russia is recalibrating its invasion strategy in Ukraine to focus on controlling the South via Eastern Ukraine. This is significant for corn growers because Ukraine’s Odessa port – which once handled the majority of Ukraine’s corn exports – is in Southwestern Ukraine along the Black Sea.
Ukrainian export terminals in the Black remain closed amid Russian naval blockades and missile damage to grain loading and storage facilities. Control over Ukraine’s Black Sea exports is a critical military objective for Russian President Vladimir Putin, with the capture of Odessa being his primary objective. While Russian advances have faced steep roadblocks in Mariupol, it has come at a steep and tragic cost to Ukrainian civilians.
Mariupol is not a key corn exporting terminal for Ukraine in the Black Sea. But if Russian aggressions in Mariupol are any indication of how an attack on Odessa may be handled, it is possible that corn prices could continue higher if Russia does end up advancing to Odessa.
Soybeans
Soyoil is stealing the show in the soybean complex this morning, posting 4% gains overnight as top global palm oil producer Indonesia announces export bans next week. Soybean futures followed $0.07-$0.12/bushel higher on the news with gains also compounded by strike concerns in Argentina.
Easing demand for soymeal triggered losses in the soymeal market this morning, despite gains for the regular oilseed and its soyoil derivative.
Oil market news
Top global palm oil producer Indonesia announced overnight it would ban its palm oil exports to control domestic cooking oil prices. President Joko Widodo said overnight that Indonesian palm oil exports would halt beginning next Thursday, April 28.
“I will monitor and evaluate the implementation of this policy so availability of cooking oil in the domestic market becomes abundant and affordable,” Widodo said in a short video released overnight.
Meanwhile, second largest producer Malaysia will be keeping an export tax in place for its palm oil shipments and raised its reference price for the tax. The new prices will stand at the equivalent of $1,564.63/metric tonne (MT), according to the Malaysian Palm Oil Board’s website. Shipments above that price will be taxed at a rate of 8%.
Again, while the goal is to keep domestic prices stable, in doing so these policies further drive up the prices of global edible oils.
Palm oil is the largest produced edible oil in the world. Indonesia and Malaysia are the world’s top producers and exporters of this edible oil. Since the top four edible oils (palm, soy, canola, and sunflower) are already in tight supply, this news will likely boost prices in the soyoil complex as the four oils typically act as substitutions for one another, especially in high-price situations.
Another strike in Argentina
No, you’re not having deja vu. Less than a week after Argentina resolved its trucker strike, its Maritime, Port and Naval Industry Federation (Fempinra) union workers went on strike to protest delays in announcing river and port tenders.
The dock workers’ protest has not yet hindered grain flows as Fempinra is required to observe a 15-day conciliation period due to government mandates.
“The Fempinra strike has not affected absolutely anything. The entire area of Rosario is working normally,” Guillermo Wade, head of the CAPyM port and maritime chamber, told Reuters.
“As of the afternoon shift, they will work normally,” echoed Fempinra’s press secretary, Luis Rebollo.
Argentina is currently in its peak corn and soybean harvesting period right now, which typically translates to high export shipping volumes around the same time. Last week’s trucker strike halted grain flows around the country, albeit temporarily. This strike could further delay shipments if it is not resolved before the 15-day conciliatory period ends.
Argentina is the world’s third largest exporter of corn and soybeans and the top exporter of processed soy products.
Wheat
Wheat prices wobbled slightly this morning, though are slated to start the day mostly higher despite a strengthening dollar. And it was surprisingly good news – likely following soyoil and corn gains – following the barrage of bearish news the wheat market digested, especially in yesterday’s trading session.
U.S. export paces continued to be disappointing in yesterday’s report. Russian wheat exports are slated to rise in June and July as the state quota system expires and a record harvest is anticipated amid favorable growing conditions. Crop conditions in the U.S. continue to struggle while planting progress for spring wheat acreage in the Northern Plains will be hindered yet again this weekend by snow and rain in the forecast.
A cold snap across top European Union wheat producer France last week dropped the country’s stellar wheat condition ratings slightly, though the crop remains in overwhelmingly fantastic condition. As of last Sunday, 91% of France’s soft winter wheat crops were in good to excellent condition, down a mere 1% from the previous week.
French farm office FranceAgriMer expects that 32% of anticipated 2022 corn acres have already been planted in the country as of earlier this week, up 8% from the previous week but still lagging slightly behind last year’s rapid planting paces.
Weather
Even with early morning showers, the Upper Midwest – and much of the rest of the Heartland – will finally see warmer temperatures today, according to NOAA’s short-range forecasts. This morning’s showers will continue to linger over the Great Lakes Region overnight.
A storm system developing in the Northern Rockies will likely trail the system currently dousing the Midwest, bringing a chance of snow and rain to the Northern Plains over the weekend. Showers and thunderstorms will travel across the Plains over the next couple days which should help soil moisture readings along the way.
Yesterday’s weekly Drought Monitor update saw a sixth consecutive week of easing drought conditions across the country. Through the week ending April 19, 65.82% of U.S. land was categorized into abnormally dry to exceptional drought condition. That marked a 1.62% drop in weekly dryness ratings, sending the weekly drought categorization to the moistest reading since November 23, 2021.
The Upper Midwest will likely see more drought relief into next week’s report as showers over the past week have helped to replenish dry soil moisture levels. Drought continues to persist across the High Plains, with 86.33% of land in the region in abnormally dry to exceptional drought condition. And for the West, the drought is still a literal hot mess.
Soils are beginning to heat up in central regions of the Midwest. Planting activity will likely heat up quickly next week as soil moisture allows. And while areas of the Plains have been able to plant for a couple weeks now, low moisture levels in the region could stunt crop germination and emergence in the early days of spring.
It is still too early in the season to be throwing yields out with the bathwater at this point just because of drought. However, it is a La Nina year and with that typically follows a reduced chance of average precipitation accumulation in the Plains region.
The dry conditions of the U.S. Plains are likely to trigger long-term responses for cattle producers and row crop farmers alike. Time will ultimately tell how those results shake out, but at the minimum farmers should be bracing for volatile weather markets over the next couple months.
Financials
Equity markets edged lower overnight after Federal Reserve Chairman Jerome Powell suggested yesterday that the Fed will likely break with traditional 0.25% interest rate raises at the May 3-4, 2022 Federal Open Market Committee (FOMC) meeting and instead implement a 0.5% rate hike.
The aggressive Fed stance is necessary to combat inflation, but markets flinched overnight at the prospect of potential economic growth contraction due the higher rates.
Some stock market weakness was also due to growth concerns in China, especially amidst its government’s unwillingness to relent on the COVID Zero strategy.
Also worth a read on our website, FarmFutures.com:
Naomi Blohm expects grain prices will stay in a holding pattern over the next few weeks, supported by tight ending stocks but stalemated by a lack of fresh market news.
Mike Downey weighs the odds of farmland prices cooling off and the results could have challenging implications for future farmland buyers.
Advance Trading’s Josh Green has fresh insights for how to make a profitable year even more profitable.
Dave Kohl questions if food producers are losing touch with mainstream consumers.
Bryce Knorr has the latest insights into the fertilizer market and a few key reasons why high fertilizer prices are likely to stick around.
Morning Ag Commodity Prices – 4/22/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAY ’22 CORN
$ / BSH
8.075
7.915
8.045
0.0525
0.66%
JUL ’22 CORN
$ / BSH
8.04
7.88
8.01
0.0575
0.72%
SEP ’22 CORN
$ / BSH
7.625
7.455
7.6025
0.0475
0.63%
DEC ’22 CORN
$ / BSH
7.44
7.2725
7.4125
0.025
0.34%
MAR ’23 CORN
$ / BSH
7.4625
7.3025
7.44
0.025
0.34%
MAY ’23 CORN
$ / BSH
7.46
7.3125
7.4425
0.0275
0.37%
JUL ’23 CORN
$ / BSH
7.415
7.2625
7.4025
0.0325
0.44%
MAY ’22 SOYBEANS
$ / BSH
17.565
17.3
17.51
0.0275
0.16%
JUL ’22 SOYBEANS
$ / BSH
17.29
17.02
17.245
0.05
0.29%
AUG ’22 SOYBEANS
$ / BSH
16.745
16.48
16.7275
0.0825
0.50%
SEP ’22 SOYBEANS
$ / BSH
15.9025
15.6575
15.855
0.055
0.35%
NOV ’22 SOYBEANS
$ / BSH
15.4125
15.185
15.37
0.0525
0.34%
JAN ’23 SOYBEANS
$ / BSH
15.4225
15.19
15.385
0.065
0.42%
MAR ’23 SOYBEANS
$ / BSH
15.2775
15.02
15.24
0.0975
0.64%
MAY ’23 SOYBEANS
$ / BSH
15.2525
15
15.23
0.115
0.76%
JUL ’23 SOYBEANS
$ / BSH
15.225
15.0375
15.225
0.1075
0.71%
MAY ’22 SOYBEAN OIL
$ / LB
84.2
80.77
83.8
2.3
2.82%
JUL ’22 SOYBEAN OIL
$ / LB
82.58
79.02
82.25
2.61
3.28%
MAY ’22 SOY MEAL
$ / TON
470.2
463.8
464.6
-4.3
-0.92%
JUL ’22 SOY MEAL
$ / TON
465.1
458.3
459
-4.9
-1.06%
AUG ’22 SOY MEAL
$ / TON
454.6
447.1
448.2
-5.5
-1.21%
SEP ’22 SOY MEAL
$ / TON
442.5
435.4
436.9
-4.8
-1.09%
OCT ’22 SOY MEAL
$ / TON
427.6
422.5
423.7
-4.4
-1.03%
MAY ’22 Chicago SRW
$ / BSH
10.725
10.525
10.6375
-0.0425
-0.40%
JUL ’22 Chicago SRW
$ / BSH
10.8125
10.6075
10.7225
-0.0425
-0.39%
SEP ’22 Chicago SRW
$ / BSH
10.7975
10.59
10.695
-0.0575
-0.53%
DEC ’22 Chicago SRW
$ / BSH
10.765
10.555
10.6625
-0.065
-0.61%
MAR ’23 Chicago SRW
$ / BSH
10.7125
10.555
10.6625
-0.0575
-0.54%
MAY ’22 Kansas City HRW
$ / BSH
11.4675
11.2875
11.3975
0.02
0.18%
JUL ’22 Kansas City HRW
$ / BSH
11.54
11.3325
11.4425
0.0075
0.07%
SEP ’22 Kansas City HRW
$ / BSH
11.52
11.3175
11.4425
0.02
0.18%
DEC ’22 Kansas City HRW
$ / BSH
11.4625
11.3
11.4
0.01
0.09%
MAR ’23 Kansas City HRW
$ / BSH
11.365
11.31
11.365
-0.005
-0.04%
MAY ’22 MLPS Spring Wheat
$ / BSH
11.63
11.48
11.5675
0.0525
0.46%
JUL ’22 MLPS Spring Wheat
$ / BSH
11.665
11.4825
11.6
0.055
0.48%
SEP ’22 MLPS Spring Wheat
$ / BSH
11.505
11.345
11.505
0.095
0.83%
DEC ’22 MLPS Spring Wheat
$ / BSH
11.46
11.3325
11.46
0.0475
0.42%
MAR ’23 MLPS Spring Wheat
$ / BSH
11.41
#N/A
11.375
0
0.00%
JUN ’21 ICE Dollar Index
$
101.105
100.485
100.87
0.256
0.25%
JU ’21 Light Crude
$ / BBL
104.22
101.22
102.52
-1.27
-1.22%
JU ’21 Light Crude
$ / BBL
103.34
100.5
101.8
-1.16
-1.13%
MAY ’22 ULS Diesel
$ /U GAL
3.9318
3.8246
3.9165
0.0157
0.40%
JUN ’22 ULS Diesel
$ /U GAL
3.6598
3.5583
3.6404
0.0137
0.38%
MAY ’22 Gasoline
$ /U GAL
3.3333
3.2539
3.3023
-0.0363
-1.09%
JUN ’22 Gasoline
$ /U GAL
3.3118
3.2333
3.2848
-0.0327
-0.99%
APR ’22 Feeder Cattle
$ / CWT
0
#N/A
158.45
0
0.00%
MAY ’22 Feeder Cattle
$ / CWT
0
#N/A
164.85
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
144.1
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
139.9
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
110.85
0
0.00%
JUN ’22 Live Hogs
$ / CWT
0
#N/A
117.175
0
0.00%
APR ’22 Class III Milk
$ / CWT
24.31
#N/A
24.31
0
0.00%
MAY ’22 Class III Milk
$ / CWT
24.57
24.56
24.56
-0.01
-0.04%
JUN ’22 Class III Milk
$ / CWT
24.73
#N/A
24.82
0
0.00%
