PAGE 16
THE LAND — APRIL 1/APRIL 8, 2022
www.thelandonline.com — “Where Farm and Family Meet”
MARKETING
Grain Outlook Corn acres projected to drop 4 percent The following marketing analysis is for the week ending April 1. CORN — The market volatility continues as prices were swayed by headlines out of Ukraine and Russia and then we added in the surprisingly bullish corn acreage report. Corn dipped to the lower side of the monthly range early in the week when Russia said they were going to reduce attacks in Ukraine with May and July corn briefly locked down the daily 35-cent limit. When no deescalation was observed within 24 hours, prices rebounded to where they began the week. Then came the Prospective Planting and Grain Stocks reports on March 31 which shocked corn PHYLLIS NYSTROM traders with a significantly CHS Hedging Inc. friendlier corn acreage number St. Paul than was anticipated. The grain stocks report was a non-event. The Prospective Planting report showed a year-toyear slash of 3.86 million acres to 89.5 million acres (a 4 percent decline) expected to be planted to corn this year versus 92 million estimated and below even the lowest trade expectation. This would be the lowest U.S. corn acreage in five years and the fourth year in a row the U.S. Department of Agriculture’s number was outside the range of trade guesses. The February USDA Outlook Conference’s projection was 92 million acres. Last year U.S. farmers planted 93.4 million acres of corn. Minnesota’s corn acres will reportedly be down 600,000 this year to 7.8 million and soybean acres up 350,000 this spring. Iowa’s corn acreage is the lowest since 2005 with a 300,000 acre decline this year to 12.6 million acres. Illinois corn acres are expected to fall 300,000 acres to 10.7 million, and North Dakota is expected to plant 500,000 fewer corn acres this year. U.S. hay acres were pegged at their lowest since 1907! March 1 corn stocks were pegged at 7.85 billion bushels, up 2 percent from last year, with 52 percent on-farm (4 billion bushels) and 48 percent (3.77 billion bushels) held in off-farm storage. The on-farm stocks are up 1 percent from last year and off-farm stocks rose 3 percent from last year. This compares with the average trade estimate of 7.88 billion bushels and 7.7 billion bushels last year on March 1. The stocks number has not come in below the average trades guess for the last three years. This year’s stocks are the second lowest in six years.
Cash Grain Markets corn/change* St. Cloud $7.05 +.12 Madison $7.28 +.23 Redwood Falls $7.30 +.18 Fergus Falls $7.18 +.18 Morris $7.22 +.07 Tracy $7.22 +.12
soybeans/change* $15.51 $15.59 $15.49 $15.64 $15.64 $15.54
-.61 -.65 -.65 -.65 -.65 -.60
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: $7.21 $15.57 receipts; gathering mortgage, retirement, and investment account statements; and relying on computer Year Ago Average: $5.21 $13.54 software to take advantage of every tax break the Grain prices are effective cash close on April 5. 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. Ukraine did export its first corn train to the west Tax preparation may be the in the last week. Reports were circulating that only time of year many houseUkraine was in talks with Romania to use their Black Sea port to ship grain exports. I heard the holds gather all their financial rail gauge between the two countries is different information in one place. That which could make this shipping alternative more makes it a perfect time to take a difficult. Adding to Ukraine’s export troubles are critical look at how much money MARISSA reports that Russia mined areas of the Black Sea, is coming in and where it’s all JOHNSON and some had drifted into waters off Turkey and going. In other words, this is a Profinium Romania. Military diving teams from Turkey and great time to give the household Wealth Management Romania were disarming the mines. Russia is con- budget a checkup. Advisor sidering demanding payment terms for several A thorough budget checkup commodities, including grain and crude oil, to be involves six steps. made in rubles. Germany is making emergency Creating some categories — Start by dividing plans to ration natural gas supplies in case Russia expenses into useful categories. Some possibilities: shuts off or disrupts the supply chain. Russia home, auto, food, household, debt, clothes, pets, accounted for 55 percent of Germany’s natural gas entertainment, and charity. Don’t forget savings and imports last year. Ukraine’s president of the investments. It may also be helpful to create subcatUkrainian Agrarian Confederation expects their egories. Housing, for example, can be divided into spring planting of corn, soybeans and sunflowers mortgage, taxes, insurance, utilities, and maintewill fall at least 30 percent with production suffernance. ing at least a 40-45 percent decline. UkrAgroConsult Following the money — Go through all the says Ukraine has started planting on at least 15-20 percent of spring crop acres. Their Agricultural receipts and statements gathered to prepare taxes Minister estimated 11.9 million acres will be plant- and get a better understanding of where the money ed with sunflowers this year, down from 16.5 mil- went last year. Track everything. Be as specific as lion acres last year. It’s estimated that Russian possible, and don’t forget to account for the cost of a latte on the way to the office each day. troops have mined about 50,000 hectares. Projecting expenses forward — Knowing how The weekly ethanol report wasn’t what you want to see with slightly lower production but stocks that much was spent per budget category can provide a swelled to 101-week highs and near-record levels. useful template for projecting future expenses. Go Weekly production decreased 6,000 barrels per day through each category. Are expenses likely to rise in to 1.04 million bpd. Ethanol stocks jumped 381,000 the coming year? If so, by how much? The results of barrels to 26.5 million barrels. Gasoline demand fell this projection will form the basis of a budget for the to an eight-week low. Crush margins fell 8 cents to a coming year. positive 8 cents per gallon. This isn’t what you want Determining expected income — Add together to see at a time when gasoline demand usually all sources of income. Make sure to use net income. begins to climb through the summer. High gasoline Doing the math — It’s time for the moment of prices at the pump are affecting consumers’ demand. Production is still running slightly above what is truth. Subtract projected expenses from expected needed to hit the USDA’s corn for ethanol usage, but income. If expenses exceed income, it may be necesthe increasing stocks are concerning. News that sary to consider changes. Prioritize categories and See NYSTROM, pg. 17
See JOHNSON, pg. 18
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.
