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 over if and how many acres will CHS Hedging inC. get planted in the war-torn area St. Paul 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* soybeans/change*

Stewartville $6.80 +.26 $16.01 +.29 Edgerton $6.89 -.14 $15.59 -.07 Jackson $6.90 -.09 $15.64 -.12 Hope $6.97 +.07 $15.85 +.17 Cannon Falls $6.62 -.13 $15.69 -.04 Sleepy Eye $6.85 -.18 $15.62 -.16 Average: $6.84 $15.73 Year Ago Average: $5.16 $13.32

Grain prices are effective cash close on March 29. *Cash grain price change represents a two-week period.

million bushels of sales per week to hit the target. China has an estimated 228.3 million bushels of unshipped corn on the books compared to 594.4 million last year at this time. Traders are expecting China to source corn bushels from the United States to replace what they are still owed by Ukraine; but that hasn’t happened yet. New crop sales were negligible at just 200,000 bushels. New crop commitments are 84.2 million bushels vs. 76.4 million bushels last year on this date.

Weekly ethanol production was increased 16,000 barrels per day to 1.042 million bpd to a nine-week high. Ethanol stocks hit a 99-week high at 26.1 million barrels. Net margins were a nickel better at 16 cents per gallon.

Food prices are expected to continue to increase this year due to the Ukrainian situation. Some farm groups are asking the USDA to allow growers to plant on Conservation Reserve Program acres to help fill the crop void. They are targeting 4 million acres of “prime farmland” that’s currently under CRP. The European Union is proposing crops to be planted on set-aside areas which could increase acreage 9.9 million acres.

The average trade estimate for the March 31 Prospective Planting report is 92 million acres. This is down 1.4 million acres from last year’s 93.357 million planted acres, but is spot-on what the USDA forecasted at their February Outlook Conference. Corn stocks as of March 1 are estimated at 7.877 billion bushels vs. 7.696 billion bushels last year.

Outlook: July corn has moved its trading range up to approximately $7.20 to $7.50 per bushel. Its contract high is $7.47 per bushel. December corn reached a new contract high of $6.80.5 per bushel at mid-week with support at $6.50 per bushel. The March 31 report will give us our next leg up or down. The same news surrounding Ukraine may be getting stale.

For the week, May corn was 12.25 cents higher at $7.54, July rallied 22.25 cents to $7.34.75, and

See NYSTROM, pg. 15

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 receipts; gathering mortgage, retirement, and investment account statements; and relying on computer software to take advantage of every tax break the code permits. (IRS.gov, 2021)

It seems a shame not to make the most of all that effort.

Tax preparation may be the only time of year many households gather all their financial information in one place. That makes it a perfect time to take a critical look at how much money is coming in and where it’s all going. In other words, this is a great time to give the household budget a checkup. MARISSA JOHNSON Profinium Wealth Management Advisor

A thorough budget checkup involves six steps.

Creating some categories — Start by dividing expenses into useful categories. Some possibilities: home, auto, food, household, debt, clothes, pets, entertainment, and charity. Don’t forget savings and investments. It may also be helpful to create subcategories. Housing, for example, can be divided into mortgage, taxes, insurance, utilities, and maintenance.

Following the money — Go through all the receipts and statements gathered to prepare taxes and get a better understanding of where the money went last year. Track everything. Be as specific as possible, and don’t forget to account for the cost of a latte on the way to the office each day.

Projecting expenses forward — Knowing how much was spent per budget category can provide a useful template for projecting future expenses. Go through each category. Are expenses likely to rise in the coming year? If so, by how much? The results of this projection will form the basis of a budget for the coming year.

Determining expected income — Add together all sources of income. Make sure to use net income.

Doing the math — It’s time for the moment of truth. Subtract projected expenses from expected income. If expenses exceed income, it may be necessary to consider changes. Prioritize categories and

See JOHNSON, pg. 15

NYSTROM, from pg. 14

December jumped 23.5 cents to $6.69 per bushel.

SOYBEANS — Soybeans trended slightly higher this week and the May contract was finally able to close above $17.00 and November above $15. The driving news for corn was mirrored in the soybeans. Demand for soybeans remains strong with three daily sales announcements this week.

Weekly export sales were the second-lowest of the marketing year with old sales of 15.1 million bushels and new crop with net cancelations of 500,000 bushels. Old crop total commitments are 1.98 billion bushels and down 11 percent from last year. We need weekly sales of 4.5 million bushels to achieve the USDA’s 2.09 billion bushel forecast. China has 69.8 million bushels of unshipped purchases left to take this marketing year compared to 40.4 million left last year on this date. This week’s new crop sales were net cancelations of 500,000 bushels, but total commitments at 298 million bushels are a record for this date and the highest since 2013-14. China’s new crop total commitments are 69.8 million bushels vs. 40.4 million bushels last year on this date.

The BAGE rated Argentina’s soybean crop at 32 percent good/excellent, down 2 percent from last week. Brazil’s soybean harvest is estimated at 71 percent complete with the crop size predicted from 120 mmt to 127 mmt. Argentina reopened export registrations for meal and soyoil after raising the export tax from 31 to 33 percent. Argentina also extended the state of emergency for the Parana River for 90 days with the original 180-day declaration expiring at the end of March. The water level is at its lowest in 78 years!

The average trade estimate for the March 31 Prospective Planting report is 88.727 million acres. This is up 1.532 million acres from last year’s 87.195 million planted acres. The USDA forecasted soybean acres at 88.0 million acres at their February Outlook Conference. Soybean stocks as of March 1 are estimated at 1.902 billion bushels vs. 1.562 billion bushels last year.

Outlook: Soybeans sideways consolidation remains in place. Fresh news announcements have been scarce, but next week brings the Prospective Planting and Grain Stocks reports which may give us some action. In the last 21 years, the average soybean acreage number on March 31 has been higher than the actual figure 13 times and lower eight times.

For the week, May soybeans were up 42.25 cents at $17.10.25, July rallied 42.75 cents to $16.88.5, and November soybeans jumped 30 cents to close at $14.96.75 per bushel.

Weekly price changes in July wheat for the week ended March 25: Chicago wheat surged 47.75 cents higher at $10.92.5, Kansas City rallied 45 cents to $11.07, and Minneapolis improved 47.5 cents to close at $11.02.25 per bushel.

The average trade estimate for all wheat planted acreage is 47.771 million acres vs. 46.703 million acres last year. Wheat stocks are estimated at 1.045 billion bushels vs. 1.311 billion bushels last year on March 1. v

Ag students continue to experiment with various test plots

KERNZA, from pg. 12

actually Kernza pancakes that Chris Pancakes cooked for us using their own pancake formula mix. It was not all Kernza, but you can tell a difference.”

The Kernza came through the winter of 2020-21 … but so did the rye. “We did not have a harvest,” Posch said. “The rye that was there before we planted the Kernza overtook the Kernza and choked it out.”

Wagner-Lahr points out there was a drought during the 2021 growing season, so the recently-planted Kernza had to compete for water with the well-established rye.

“Our first year did not go as planned,” Berger admitted, “but we did come out with 15-and-a-half large round bales that went to supplement livestock feed.

Berger, the FFA chapter, and the community members are not giving up on Kernza — even though their first attempt didn’t go as planned. In August they were back in the field drilling oats.

“We will harvest the oats in the spring of 2022,” Berger said. “We are hoping that with the oats we can get rid of the rye and other weeds that are there and then start fresh by replanting Kernza in late summer of 2022. We hope to see what markets are available to us at that time, and there has even been discussion about using some of the Kernza flour in recipes for students to eat at ROCORI.”

The oats were planted with five different treatments ranging from tilled to no-tilled to control plots

where nothing was done to the rye. Berger says the variety of plot treatments will be educational for the community and club members. While everyone is waiting to see what will happen with the various small grain experiments, the gardening project will continue during the 2022 growing season. Posch says the gardeners hope to grow enough to freeze some of the harvest to eat during the colder months. The ROCORI school district serves three Minnesota towns whose names form the acronym ROCORI: Rockville, Cold Spring and Richmond. v If it’s not in the budget, don’t spend it

JOHNSON, from pg. 14

look to reduce those with the lowest importance until the budget is balanced.

Sticking to it — If it’s not in the budget, don’t spend it. If it’s an emergency, make adjustments elsewhere.

Tax time can provide an excellent opportunity. You have a chance to give your household budget a thorough checkup. In taking control of your money, you may find you are able to devote more of it to the pursuit of your financial goals.

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