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Today’s Prices
Grain markets sharply lower today as the trade wonders if there will be some de-escalations in Russia’s war against Ukraine and that sent prices sharply lower.
Grain Market News
Russia’s War Against Ukraine
Looking at Russia’s comment that they may back off military action around Kyiv.
The Ukrainian military has done an impressive job of holding off the Russian invasion in that area.
Russia may just take a personnel armor from this area in the north central location and relocate it to areas in the east or even move it down into the southeast portion of the country.
We believe that it would not be a surprise that Russia wants to maintain control of its eastern border along Ukraine and then the entire Black Sea coast.
Even if fighting does back off in the northern regions, we believe that fighting could escalate in the southern region and therefore we look at the markets sharp break at potentially creating a buying opportunity.
Grain Market News
2022 Prospective Planting
The trade is expecting corn acres to come in around 92 million, that’s down 1.3 million from last year. But its right at the USDA outlook forum numbers that were published in February.
In soybeans the trade is expecting acreage at 88.8 million, that would be up 1.6 million from last year and up 800 thousand from USDA outlook forum number of 88 million.
In wheat the trade is expecting total wheat acres to come in at 47.76, that would be up about a million from last year and down fractionally from the USDA outlook forum.
Bottom line is that the trade is expecting corn, beans, and wheat acres to be up about 1.3 million from last years number and we think that is stretching it, if anything it could be slightly lower.
We are not expecting barrish acreage numbers when it comes to the total combined.
Now the acreage mix could be somewhat of a surprise, more corn, less corn, more beans, less beans, but total acreage is not likely to exceed the trade estimate.
U.S. Planted Acreage
The ag outlook forum from USDA projected corn acres at 92, that would be down slightly from last years and that’s the same estimate that the trade is expecting as well.
In soybeans the outlook forum had 88 million which is up from last year, the trade is looking for 88.8.
The outlook forum USDA had wheat acres at 48 million up for the second year in a row, the average trade guess is 47.75.
As you can see the trade is looking for corn acres to be down slightly from last year, bean acres to be up slightly from last year.
If there’s a surprise it may be in the acreage mix corn versus soybeans but not likely to come in the total amount of planted acreage.
U.S. Planted Acreage C-B-W
This chart shows USDA’s outlook forum at 228 million, the average trade guess is even a little higher at 228.8. That would be up from last years planted area and again that may be difficult to achieve if prevented plant is a little above last year, last year’s conditions were nearly ideal.
At least enrollment of CRP acres is up 1.3 million from last year and we probably had about a million to a million and a half of Irvin last year.
That’s why we believe it’s going to be difficult for total acres to exceed USDA outlook forum number and if there’s a surprise it may be that it comes in slightly lower.
Quarterly Stocks: March 1, 2022
Corn stocks are estimated to be 7.885bb, that would be up from March 1st of a year ago by about 200 million bushels.
Bean stocks at 1893 area expected to be up about 330 from last year and wheat stocks at 1054 down about 250 million from last year.
If stocks for corn and beans are up from last year at this time, why is it the prices are well above the year ago level? Well due to drought in South America and the war with Russia, the market believes that US demand will be much stronger in the second half of the marketing year so therefore our ending stock could be at or even lower than the year ago level.
7-Day Precipitation Forecast
The forecast shows more than yesterday but that’s because the market has added the 7th day, which is next week on Monday, and there is a second system coming through the central US early next week.
So, the forecast looks better but overall, the forecast has not changed much.
We have a system coming through the central US starting later today, tomorrow, and into early Thursday. Then another system coming through next week on Monday and Tuesday.
This should provide some addental moisture in the western and northwestern belt which would actually favorable, but it could also produce rain anywhere from the northern delta through the Ohio valley, into the southern great lakes where rain is not desired.
Speaking of planting, Louisiana is about 50% planted, Mississippi is 5%, and Arkansas is at 2%. So, the US planting is advancing northward from the gulf states and by next week we will hear more about planting in the Delta region if weather allows.
The persistent wetness in the Delta, Ohio valley, and portions of the southern Great lakes could result in higher prevented plant this year but it’s still early.
March Corn Chart
Corn prices down sharply, our low today was at 6.95 just 2 cents from the low posted 2 weeks ago at 6.93.
We have discussed that the war is the primary driver right now, that is the war in Russia against Ukraine, and its going to create some very volatile markets.
We’ve mentioned we may see limit up and limit down days, today we did touch limit down as the volatility continues.
The chart certainly looks negative with a large down day, and it’s turned the technical down as well.
As we mentioned often in the recent weeks its day-to-day headlines that will drive market prices. Even if the chart and technical look negative, if we get nay indication of war escalation tomorrow these markets could be sharply higher.
The bottom line is the market does look disappointing from a chart and technical perspective, but we now have prices down near some major chart support.
This is where our uptrend line and our 40-day as well as our previous low all coming into play in a level just below the $7 area.
March Soybean Chart
Soybean prices also seeing a big down day and has turned the chart downward as well. Technical now pointed down in the soybeans.
So, charts and technical do look negative, but bean prices like corn did come down to major chart support where our up-trend line and 40-day moving average come into play.
The only difference in beans is that the previous lows set around March 1st is still about 50 cents or so below where we closed today.
March KC Wheat Chart
Wheat prices actually took out the previous low at 10.27, made a low today at 9.93.
The wheat market has almost virtually erased all the post invasion rally and now we are getting very close to the prices where we were at just before Russia invaded Ukraine.
That should provide some tremendous support as we move forward.
Questions or Comments
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