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Today’s Prices
Grain prices finished mostly lower today although new crop corn was higher on smaller acreage numbers from yesterday’s USDA report.
Weekly Price Summary
Grain Market News
Corn Supply & Demand
With USDA estimates for the current crop year 2021-2022, which goes through August 31 of this year for corn and bean. On the right side is the trad ides, what most of the trade is likely thinking for new crop ending stock including the crop that will be planted this spring.
Corn acres at 89.49 million acres with a normal amount of abandonment and silage, that would give us 89.1 million acres harvested and a trend line yield of 181 bushels per acres this year.
We are projecting beginning stocks next year at 1.2 billion, that is below this years ending stock, we do believe that a combination of lower than expected quarterly grain stocks combined with larger exports than USDA is currently projecting will result in the 1.44 shrinking to 1.2.
Therefore that is what we are using for beginning stock next year.
When we look at our largest demand category, we believe that feed and residual will likely be similar to what we are looking at this year. Ethanol we are looking at something similar, granted these numbers could change, but at this time we believe both ethanol and exports could be similar in the next crop year.
We do believe because of losses in South America combined with challenges due to the Russia/Ukraine war, that our exports will be larger next year at 2.7 and that’s similar to what we saw a year ago at 2.75.
When we combine all the supply items with all the demand items it results in ending stocks at 909 million bushels, that would be a 6% stock use ratio, that’s tighter than what is currently being projected for this year and tighter than where we ended up last year.
Therefore, current prices are higher than they were a year ago at this time and its due to the markets idea that next years ending stock will be even tighter than the past couple of years.
Soybean Supply & Demand
USDA’s acreage estimate for soybeans was 90.955 million acres, a normal harvest % of about 99.1% giving the harvested acres a 90.128.
We are using a trend line yield of 51.5 bushels per acre which would give us a crop of 4.642 billion bushels.
Our stocks estimate at 215 is below this year, even though our quarterly grain stock came in above the trade expectation, we believe that export demand and likely crush demand as well could be above what USDA is currently projecting. That will more than offset the larger stock that was projected yesterday giving us ending stocks this year at 215 and that would carry over into the beginning stock for next year.
Turning to our demand numbers, we believe that crush could be up next year and exports due to massive crop losses in South America.
Bottom line is that ending stocks at 197, stock use of 4.2% are tighter than this year and tighter than last year and in fact getting back towards the 2013-2014 timeframe when stocks were extremely tight.
Wheat Supply & Demand
Beginning with acreage at 47.351 released in yesterday’s perspective planning report, harvest % of 82.3% which may end up being high if we have more abandonment in the US western plains and a yield of 49.1.
That 49.1 per acre yield is below what we saw in 2019 and 2020 but above last year. Keep in mind last year we had dramatic losses due to drought in the Dakotas and Pacific Northwest.
We do believe that this yield is somewhat optimistic and its likely this number could come down, but for today we will use 49.1 with an idea that may slip lower.
We are projecting Carryin at 628, that’s below USDA 653 due to the smaller than expected quarterly grain stock.
Turning to demand numbers, we are going to use food demand up just fractionally next year, feed demand down a little bit due to tight stocks and high prices, but exports likely going to rebound.
Similar to what we saw in the previous 3 years prior to this year’s very disappointing export.
Due to the problems in Russia and Ukraine and tight stocks globally we do anticipate that US exports could increase next year. That would bring ending stocks down to 585, tighter than this year and in fact the tightest we’ve seen going back to the 2013-2014 crop year.
What’s worth noting is that stocks of corn, soybeans, and wheat are expected to be tighter than what they were the previous couple of years.
December Corn
The red line is December corn for 2022, you can se today we are up trending very close to 6.90 per bushel. Last year the high price was up around 6.50, so we are well above where we were last year at this time when we were trading just below $5. Also, above last year’s marketing year high that took place around the 1st of May.
It’s because the marketplace is anticipating significantly smaller stocks than what USDA is currently projecting.
November Soybeans
Our current price is down from the highs, we took new crop beans over 15.50 back in February and today we closed at 14.06.
Down about a $1.50 from the high, but still well above the 12.75 tight number that we were at a year ago at this time. Last year’s marketing year high came in around 14.80 on November beans.
We are above where we were last year at this time, and we did trade previously above last year’s high given the idea that we could have smaller stocks for the year ago.
But our current prices that are down and actually below last year’s high is due to the larger acreage number that USDA produced in yesterday’s prospective planting report.
Grain Market News
High Temperatures: Thursday 3-31-22
The cool temperatures in the Northern and central portions of the US are being monitored.
High temperatures yesterday in the 30’s in Missouri and central Illinois. Normally those highs would be at or just above the 60-degree level.
Therefore, much below normal temperatures in the central US including areas where many of the farmers would like to be planting going forward if they could see some warmer, dryer conditions
7-Day Precipitation Forecast
Unfortunately, there is more rain for the central US, again farmers would like to be starting in the southern portion all the way up to Missouri would be typical for this time of the year.
An inch or two of rain is possible throughout the Delta, with anywhere from .5-1 inch in the eastern belt. Its very possibly that early planting could be delayed until we see warmer and dryer conditions.
Out in the west it’s a whole different story, they’ve seen rain recently but much more rain will be needed and there are still larger areas of dryness in portions of central and western Nebraska as well as the far southwestern plains.
March Corn Chart
Corn prices posted a new high yesterday keeping our long-term uptrend intact. We did pull back today, but the long-term trend is still an uptrend, the intermediate term trend is an uptrend, and the short-term trend, although we were lower today, is also appearing to turn upward.
Technical indicators are stuck in a neutral range with no clear direction. It will be weather items and Russia’s war against Ukraine that will determine price direction next week.
March Soybean Chart
Soybeans prices are in a long-term uptrend, the intermediate trend is also pointed upward, but the short-term trend has turned downward.
Today we made a new low for the move at 15.65, which is at or slightly below the spike lows we had seen on a big correction back in February.
Although the short-term trend has turned downward, technical indicators are getting into the oversold region for the first time going back into the October-November timeframe.
SO, this is no time to be making sales in soybeans we do expect the market will see significant bounces in the weeks and months to come.
Also, it’s worth noting that today’s prices at 15.55 are a $1.75 below the highs that were posted following Russia’s invasion of Ukraine.
March KC Wheat Chart
Wheat prices are in a long-term trend uptrend, the intermediate trend is also an uptrend, while the short-term trend has been down since the highs were posted in March.
It’s worth noting that price shave fallen about $2.600 from the highs early in the month at 12.59 to the lows that were posted early this week at 9.93.
Following a $2.60 break with technical indicators approaching the oversold level, the charts do look negative, but this is no place to be making sales.
We would expect wheat will find solid support at the 40-day moving average, the uptrend line, and also the spike lows form earlier this week. All coming into play between $9.90-$10.00.
Questions or Comments
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