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Today’s Prices
Grain prices rebounded today as there is less confidence in any sign of cease fire regarding the Russia/Ukraine conflict.
Grain Market News
Weekly Ethanol Production
Our chart that shows weekly ethanol production shows that its down slightly from last week at 1.036 million barrels per day.
But that’s still above the level needed that’s shown in the black line, so we are still on track to reach or exceed USDA’s current corn use estimate for the ethanol industry.
Year to date we are up 10.1% above the year ago level for ethanol production, USDA is estimating that corn use for ethanol production will be up 6.3% this year.
So, as we mentioned we are still ahead of pace to reach USDA’s target or even exceed their target.
Weekly Stocks of Fuel Ethanol
Stocks went up for the 4th week in a row to 26.54 million barrels. That isn’t a record high, that was set last year, but a record high for late March.
So certainly, ethanol stocks rising to these levels is some what of a concern.
One item we want to mention is that US ethanol is now cheaper than Brazilian ethanol. That was not the case 6-8 weeks ago so therefore we do believe that will result in better US exports of ethanol in the next few months.
That could promote lower stocks as we move forward and it’s also a seasonal trend where ethanol stocks decline in the April-May timeframe.
Grain Market News
Quarterly Stocks: March 30, 2022
Stocks of corn are expected to come in at 7.885bb, up nearly 200 million bushels from last year.
Bean stocks at 1.893bb, up 330 million bushels from last year.
An interesting observation is that if stocks are above the year ago level why are the prices significantly above the year ago as well? Typically, larger stocks would mean lower prices, but keep in mind South American crop losses have not been fully factored in and will result in larger demand and the Russia/Ukraine conflict could also result in stronger demand.
Therefore, it is expected widely by the trade that the demand will be well above the USDA target and our stocks will be lowered over time for both corn and bean.
Wheat stocks at 1.064, down about 250 million bushels from last year as wheat stocks are expected to be down for the 5th year in a row.
2022 Prospective Planting
The average trade guess was that corn acres would come in around 92 million acres, very close to the outlook meeting but up about 1.35 from last year.
Bean acres expected to come in at 88.8 million, that would be up about .8 million acres from the outlook meeting and up about 1.6 million acres from last year.
Wheat acres are expected to come in at 47.76 million acres, slightly below the outlook forum from February but still up about a million acres forma year ago.
Bottom line is the trade is expecting acres for corn, beans, and wheat at 228.56 that’s above the outlook forum of 228 and up about 1.3 million acres from last year.
If that’s the case and corn, bean, and wheat acres come in at 228.56 its going to leave many other crops short of available acres that are needed to keep stocks from falling further.
We would not be surprised if corn, bean, and wheat acres came in slightly below what the trade is expecting.
14-Day Observed Precipitation
Our recent weather pattern over the past 2 weeks shows moderate to heavy rains across the central US corn and bean belt.
Lighter to the northwest and southwest and fortunately portions of the Ohio river valley have seen less rain over the past 2 weeks.,
14-Day Observed Precipitation vs. Normal
This shows the 14-day precipitation compared to normal. As you can see the central US corn and bean belt has seen above normal rain.
The Ohio valley has dried out a little bit compared to average which is good news.
We continue to see less than normal rain in the northern plains and also the far southwestern plains.
If there is a piece of good news on this map, it’s that the rainfall in the far western belt, portions of southwest Minnesota, southeast South Dakota, eastern Nebraska, and Iowa have seen above normal rain. This is an are that has been dry, so these rains have been welcome.
7-Day Precipitation Forecast
Unfortunately portions of the central belt, eastern belt, down into the Delta and even the Ohio valley could see some heavy rains. 2-4 inchers of rain and isolated heavier over the next 7 days which could slow planting progress.
We mentioned yesterday that planting is already beginning in the deep south and planting will be beginning very soon in much of the central and northern Delta.
Normal High Temperatures for March 30th
We’ve already seen planting taking place in the deep south; Louisiana is 51% planted on the corn crop and they are just starting in southern Arkansas and portions of Mississippi.
Average temperatures are already in to the 60’s for portions of the Delta into the extreme southern Ohio valley. This is the next area that could get started over the next week or two.
Then the central and northern belt will be starting in mid to late April, again this is weather permitting.
If we look at the far north where you see high temperatures in the low 50s and even 40s, those are areas where average low temperatures are at or slightly below freezing, so it’s much too early to start in the far North.
March Corn Chart
Corn prices rallied sharply following the invasion of Russia into Ukraine and since that time the markets have now been chopping back and forth as the market consolidates waiting for additional input.
Last week we reached towards the upper ends of the range, yesterday we pushed down towards the lower end of the range, and today the close is almost exactly in the middle of the sideways range that’s been in pace for nearly a month.
That tells us that the marketplace is patiently waiting for additional input from tomorrow’s stock and acreage report before pushing prices too far in either direction.
That also evidence by the technical indicators where the statistics are dead center in the middle of a neutral range. The market clearly waiting for additional information before making a big move.
March Soybean Chart
Soybean prices were pushing towards the upper end of the range last week, pushing down towards chart support yesterday, and we did rebound today but still somewhat closer to the low range.
We are still within the same range that has encompassed the trade in the last month.
Technical indicators rallied last week and then fell this week and now we are still in somewhat of a neutral range where we spent most of the time over the past month.
Again, the market is waiting for fresh input to drive direction.
March KC Wheat Chart
Wheat prices are in a downtrend off of the highs posted about a month ago. Prices posted new lows last week did not quite come down to our 40-day or our uptrend line but nonetheless it was a new low for the move.
The chart still looks disappointing but today was an inside day, we did not take out yesterday high or low and closed somewhat towards the middle of that range.
We see that the wheat market is waiting for fresh input.
Questions or Comments
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