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Today’s Prices

Grain markets finished lower today as a little less concern regarding Ukraine and the possibility of getting some acres planted this spring combined with China putting a lockdown on Shanghai contributed to lower prices and selling today.

Grain Market News

Russia’s War Against Ukraine

Looking at a map of Ukraine, maroon areas where Russia has invaded the country and trying to make advancements. The larger the area that Russia tries to take over means the more their troops are dispersed.

There was talk today that maybe Russia will start to focus on the eastern areas like the Dnipro area where pro-Russian separatists had occupied that area prior to the invasion, also focusing on the southern areas along the Black Sea and Askov Sea.

The reason the markets look at this as negative, if Russia focuses its attention on those areas its possible that maybe central and western areas could see better planting opportunities if the war focuses on the south and east.

This doesn’t mean that this is a favorable development but at least the market is wondering if maybe it would allow for some better planting opportunities.

We mentioned that the markets will go up and down possibly a limit move on every little development as the trade tries to determine is it going to escalate or deescalate the war.

90-Day Precipitation vs. Normal

Here in the US focus will be on the planting season coming up in the month of April Keep in mind the month of April begins later this week.

Our trend for precipitation in the US over the last 90 days has been wetter than desired in the northern Delta, Ohio Valley, and pushing towards the lower Greta Lakes and dryer than desired in much of the plain states

Some of that dryness has also extended into the western and northwestern belt where precipitation has been less than normal over the last 90 days.

This 90-day precipitation vs normal would be for the most part the months of January-March.

14-Day Observed Precipitation

We see that dryness is continuing in the far northern plains, additional precipitation in the northern delta into portions of the eastern belt, but on the positive side we have seen any where from .5-1.5 inches of rain over portions of the central and western plains.

In fact, areas of southeast Nebraska and eastern Kansas have seen 2 inches of precipitation or more in yellow and where we see some tan is 3 inches or more over the last 2 weeks.

So certainly, some beneficial rains in portions of the US plains.

U.S. Drought Monitor Class Change

Anything in green is where drought has been improved and you can see some of the plain states have seen 1 to even 2 categories of improvement of the drought conditions.

We will see if a major pattern shift is in the making, but at least for the moment we have seen some beneficial rain in portions of the central and western plains.

7-Day Precipitation Forecast

On the 7-day forecast there was less precipitation than thought previously in the plains and mostly 1-3 tenths in the central and western plains, even lighter amounts in the far southern plains and generally 2-3 tenths in the northern plains.

Where planting is going to be beginning very soon in the delta into the Ohio Valley still looking at 1 to maybe 1.5 inches of precipitation.

This is not an exceptional amount of rain but keep in mind it is already falling on ground that is saturated along with cool temperatures.

It’s a littler early since we are only in March to be overly concerned but certainly, we want to monitor a couple of scenarios. The wetness in the northern Delta into the eastern belt and Ohio valley and dryness in areas of the plains.

Grain Market News

Corn: Weekly Export Inspections  

Corn hit a new marketing year high at 63 million bushels, that’s the highest-level going bac k to last June and its above the level needed to reach USDA export forecast.

This is evidence that, at least of right now, US export demand is not being rationed aby the higher prices.

Soybean: Weekly Export Inspections

Soybean exports have been declining seasonally but take a look at today’s export numbers which is well above last year and just slightly above the level needed to reach USDA export forecast.

We are not seeing any evidence of rationing in fact we would not be surprised to see our exports at or above the black line in the weeks and months to come.

Wheat: Weekly Export Inspections

 Wheat inspections were above last week, in fact above the last 2 weeks, but still quite disappointing.

Just 12.5 million bushels, that’s well above the level needed to reach USDA export forecast.

Despite Russia and Ukraine being limited as far as export opportunities, US export inspections have not yet responded in a significant way to Russia’s war against Ukraine. This will also need to be monitored in the weeks to come.

Cattle On Feed

Cattle on feed numbers were up 1.4% from last year and a record for the 1st of March.

This is good news for overall feed demand and again not indicating any reduced demand due to the current high prices.

But it will be important to monitor this if prices remain high or go higher.

July Corn Chart

Corn prices for the third day in a row did not post a new high, a lower high for the third day in a row is starting to hint at maybe a downtrend developing in the short term.

At this time, it just looks like somewhat of a correction because the long-term trend is up and in fact the intermediate term trend is up as well.

The slightly lower future market may be just indicating a correction, we will see if the 10 and 20 day moving average hold over the next few days.

July Soybean Chart

Soybeans are also seeing a lower trend with 3 days in a row of lower highs and today a very disappointing close. The long-term trend and the intermediate term trend are both up, while the short-term trend is chopping sideways and now indicating trying to turn lower.

If this is just a correction in the midst of an overall longer-term uptrend, we would want to find support as the market gets down towards the 16.25 level. That another 20-25 cents below where we closed today.

It’s worth noting that the lower prices today did extend the technical indicators to the downside, but they are still in a neutral range.

We have not been able to achieve over bought or oversold conditions over the last month in the soybean market.

July KC Wheat Chart

Wheat prices also seeing 3 and now 4 days in a row of lower highs. This is signaling that in the immediate term the very short term the market may have some additional downside risks with chart support at a double bottom of 10.27. That 40 cents below where we closed today.

Technical indicators are pointed downward and do still have room to move, so we can’t rule out the wheat market still seeing a little bit of downward pressure at least in the short term.

But we do want to make our listeners aware that these are chart and technical signals and a war and crop reports that come out Thursday can certainly overwhelm the chart or technical signals if we get a new surge of either bearish or bullish news.

Questions or Comments

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