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THE LAND — APRIL 1/APRIL 8, 2022
www.thelandonline.com — “Where Farm and Family Meet”
MARKETING
Grain Outlook Projections slash Ukranian corn crop The following marketing analysis is for the week ending March 25. CORN — Corn was very sideways this week in the May contract while the July contract edged its recent trading range slightly higher. Many of the nearby cash bids are based on the July contract due to the big inverses on the board of trade. The December contract set a new contract high this week, as did the September 2022 forward contracts. The old crop contracts of May and July were unable to set new contract highs. Fresh news was sparse during the week with the war in Ukraine holding its place as front-page news. Conversations abound PHYLLIS NYSTROM CHS Hedging Inc. over if and how many acres will St. Paul get planted in the war-torn area and to which crops. Earlier maturing crops are being encouraged rather than corn. The most current predictions slash Ukraine’s corn production by up to 55 percent this year with the lack of fuel and labor to put in the crop, as well as dodging missiles. Ukraine’s ag ministry estimates that 321,000 acres have been planted. Ukraine is shipping grain by rail out of the western part of the country as ports remained closed. President Biden warned of “real” food shortages around the world. Brazil’s safrinha corn crop is off to a good start. Safras and Mercado are pegging Brazil’s corn crop at 115.7 million metric tons, slightly higher than the U.S. Department of Agriculture’s 114 mmt estimate with exports up 66 percent from last year at 34.5 mmt. Brazil has removed the import tax on ethanol, soyoil, sugar, coffee, cheese and pasta through the end of this year to fight food inflation. The Buenos Aires Grain Exchange in Argentina cut its corn estimate 2 mmt to 49 mmt vs. USDA at 53 mmt. The corn was rated 31 percent good/excellent, up 2 percent from last week. Harvest is estimated at 10 percent complete vs. 12.8 percent on average. Weekly export sales were disappointing for both old and new crop this week. Old crop sales were 38.6 million bushels and fell to 18 percent behind last year. The USDA is expecting a 9 percent decline in year-on-year exports this year. Total commitments are 2.09 billion bushels or 83.5 percent of the USDA’s 2.5 billion bushel export projection. We need 15.8
Cash Grain Markets corn/change* Stewartville Edgerton Jackson Hope Cannon Falls Sleepy Eye
$6.80 +.26 $6.89 -.14 $6.90 -.09 $6.97 +.07 $6.62 -.13 $6.85 -.18
soybeans/change* $16.01 +.29 $15.59 -.07 $15.64 -.12 $15.85 +.17 $15.69 -.04 $15.62 -.16
Financial Focus Try this 6-step budget check-up
Every year, about 150 million households file their federal tax returns. For many, the process involves digging through shoe boxes or manila folders full of Average: $6.84 $15.73 receipts; gathering mortgage, retirement, and investment account statements; and relying on computer Year Ago Average: $5.16 $13.32 software to take advantage of every tax break the Grain prices are effective cash close on March 29. code permits. (IRS.gov, 2021) *Cash grain price change represents a two-week period. It seems a shame not to make the most of all that effort. million bushels of sales per week to hit the target. China has an estimated 228.3 million bushels of Tax preparation may be the unshipped corn on the books compared to 594.4 mil- only time of year many houselion last year at this time. Traders are expecting holds gather all their financial China to source corn bushels from the United States information in one place. That to replace what they are still owed by Ukraine; but makes it a perfect time to take a that hasn’t happened yet. New crop sales were negli- critical look at how much money MARISSA gible at just 200,000 bushels. New crop commitments is coming in and where it’s all JOHNSON are 84.2 million bushels vs. 76.4 million bushels last going. In other words, this is a Profinium year on this date. great time to give the household Wealth Management Weekly ethanol production was increased 16,000 budget a checkup. Advisor barrels per day to 1.042 million bpd to a nine-week A thorough budget checkup high. Ethanol stocks hit a 99-week high at 26.1 mil- involves six steps. lion barrels. Net margins were a nickel better at 16 Creating some categories — Start by dividing cents per gallon. expenses into useful categories. Some possibilities: Food prices are expected to continue to increase home, auto, food, household, debt, clothes, pets, this year due to the Ukrainian situation. Some farm entertainment, and charity. Don’t forget savings and groups are asking the USDA to allow growers to investments. It may also be helpful to create subcatplant on Conservation Reserve Program acres to egories. Housing, for example, can be divided into help fill the crop void. They are targeting 4 million mortgage, taxes, insurance, utilities, and mainteacres of “prime farmland” that’s currently under nance. CRP. The European Union is proposing crops to be Following the money — Go through all the planted on set-aside areas which could increase acre- receipts and statements gathered to prepare taxes age 9.9 million acres. and get a better understanding of where the money The average trade estimate for the March went last year. Track everything. Be as specific as 31 Prospective Planting report is 92 million acres. possible, and don’t forget to account for the cost of a This is down 1.4 million acres from last year’s 93.357 latte on the way to the office each day. million planted acres, but is spot-on what the USDA Projecting expenses forward — Knowing how forecasted at their February Outlook Conference. much was spent per budget category can provide a Corn stocks as of March 1 are estimated at 7.877 bil- useful template for projecting future expenses. Go lion bushels vs. 7.696 billion bushels last year. through each category. Are expenses likely to rise in Outlook: July corn has moved its trading range up the coming year? If so, by how much? The results of to approximately $7.20 to $7.50 per bushel. Its con- this projection will form the basis of a budget for the tract high is $7.47 per bushel. December corn coming year. reached a new contract high of $6.80.5 per bushel at Determining expected income — Add together mid-week with support at $6.50 per bushel. The all sources of income. Make sure to use net income. March 31 report will give us our next leg up or down. Doing the math — It’s time for the moment of The same news surrounding Ukraine may be getting truth. Subtract projected expenses from expected stale. income. If expenses exceed income, it may be necesFor the week, May corn was 12.25 cents higher at sary to consider changes. Prioritize categories and $7.54, July rallied 22.25 cents to $7.34.75, and See JOHNSON, pg. 15 See NYSTROM, pg. 15
Information in the above columns is the writer’s opinion. It is no way guaranteed and should not be interpreted as buy/sell advice. Futures trading always involves a certain degree of risk.
