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THE LAND — APRIL 15/APRIL 22, 2022
www.thelandonline.com — “Where Farm and Family Meet”
MARKETING
Grain Outlook Corn moves ahead in short week The following marketing analysis is for the week ending April 14. CORN — Same song, second verse. After a slow start to the week, corn continued to set new contract highs throughout the curve as the week progressed with the money people not seeing any reason to purge their length. For the second Monday in a row, the U.S. Department of Agriculture reported a big corn sale to China of 26.7 million bushels for old crop and 13.4 million bushels for new crop. Winter storms across the upper Midwest and cool, wet conditions over much of the Corn Belt erased ideas of “early” planting, but it’s too early to say we’ll be PHYLLIS NYSTROM delayed. Drier weather was CHS Hedging Inc. returning to parts of Brazil and St. Paul Argentina which may put their production back in the spotlight. News on the war front was nothing new with talk of further sanctions against Russia by the West. The EU has not yet stopped all crude oil purchases from Russia and OPEC stated its production won’t make up for lost Russian barrels if a full embargo would be enacted. The Russian offensive is expected to intensify in the eastern regions at any time. Ukrainian grain and oilseed exports in March were a meager 300,000 metric tons compared to 6 million metric tons per month pre-invasion. Inflation concerns continue to attract money to commodities. In March, inflation was 8.5 percent and the highest in 41 years! The week was a short one with no markets on April 15 in observance of Good Friday. President Biden’s announcement that E15 would be allowed to be sold through Sept. 15 didn’t move the market. It’s estimated only 10-20 million bushels of additional corn grind may come from the extension. This seems like a band-aid in terms of prices at the pump. As of April 10, U.S. corn planting was unchanged from the previous week at 2 percent complete. This compares to 3 percent on average and 4 percent last year. Planting should slowly pick up speed; but the forecast for the next week still looks cool and wet for many areas. The heavy snow across parts of North and South Dakota and northern Minnesota will take time to dry enough to allow fieldwork. Brazil’s first corn harvest is estimated at 73 percent complete
Cash Grain Markets corn/change* St. Cloud $7.64 +.59 Madison $7.85 +.57 Redwood Falls $7.82 +.52 Fergus Falls $7.70 +.52 Morris $7.80 +.58 Tracy $7.76 +.54 Average:
soybeans/change* $16.66 $16.37 $16.32 $16.42 $16.42 $16.32
+1.15 +.78 +.83 +.78 +.78 +.78
$7.76
$16.42
Year Ago Average: $5.26
$13.76
Grain prices are effective cash close on April 19. *Cash grain price change represents a two-week period.
compared to 69 percent on average and 72 percent complete last year. Weekly export sales were within expectations at 52.5 million bushels. This brings total export commitments to 2.2 billion bushels compared to the USDA’s target of 2.5 billion bushels (88 percent). We need 13.4 million bushels of sales per week to reach the forecast. Total commitments are down 17 percent vs. last year when the USDA is forecasting a 9 percent year-on-year decline. New crop sales were 16 million bushels, and all bound for China. Total new crop commitments are 117 million bushels compared to just 82.8 million bushels last year and are the third-highest on record for this date. The Deputy Ag Minister of Ukraine estimates its corn export could fall to 17 mmt this year vs. 23.1 mmt last year. Weekly ethanol production fell 8,000 barrels per day to 995,000 bpd and was near expectations. Ethanol stocks finally declined, down 1.1 million barrels to 24.8 million barrels which was much larger than the estimate for a 250,000-barrel decline. This was the largest single-week stock decrease in 59 weeks, but stocks are the second-highest on record for this week. There is no way to verify if ethanol exports surged higher. Margins improved 16 cents to 17 cents per gallon. Gasoline demand rose slightly to 8.7 million bpd, but the four-week average is down 2.3 percent from the same period last year. The price of eggs in the United States and elsewhere is soaring due to bird flu and the Easter holiday demand. In the United States, 19 million egglaying chickens on commercial farms have been destroyed in the worst bird flu outbreak since 2015. Outlook: Without a substantial reason to reduce net length, funds will likely continue to add to long positions. U.S. weather is being traded as neutral until we see where planting is headed. If there are delays, it is more likely that we won’t see many acres switched from soybeans to corn. The announcement of more Chinese purchases suggests they are either replacing Ukrainian purchases or may be concerned with South American supplies. Weather in the United States and South America will take center
stage without a change in the war status in Ukraine. For the week, May corn surged 21.5 cents higher to $7.90.25, July gained 23 cents at $7.83.75, and December raced 19.25 cents higher to $7.35.25 per bushel. SOYBEANS — Soybeans began the short trading week on the defensive following energy markets lower and without any fresh export sales announcements. Soybeans and soyoil recovered the early week losses as energies rallied back with crude oil surpassing $100 a barrel once again. Old crop soybeans have returned to the middle of their March trading range and new crop soybeans to the upper end of that range. November soybeans were finally able to close above the “magic” $15.00 per bushel level.
South American conditions have turned slightly drier with traders on the outlook for any production changes. Brazil’s soybean harvest is estimated at 86 percent complete compared to 83 percent on average and 83 percent last year. Looking ahead, the USDA attaché in Brazil is predicting soybean acreage to increase from 40.7 million hectares this year to 42.5 million hectares in 2022-23. Its 2022-23 soybean production outlook is 139 mmt vs. their estimate for 124.8 mmt this year. Their export projection for 202223 is 87 mmt compared to 77 mmt this year. Argentina’s truckers went on strike April 11 for higher freight rates due to rising fuel costs. At this writing, export sales have not been affected since there were stocks at the ports. If the strike lasts another week, export shipments will either slow or be halted. Eighty-five percent of Argentina’s crops move to the ports by truck. Weekly export sales were within estimates at a meager 20.2 million bushels for new crop. Total old crop commitments are 2.1 billion bushels. This equates to 98.4 percent of the USDA’s 2.115 billion bushel projection. We only need to average 2.9 million bushels per week to hit the USDA’s number. Traders will be expecting a higher export number in the May World Agriculture Supply and Demand Estimates report. New crop sales were very good at 16.8 million bushels with total commitments at 328 million bushels vs. 216 million bushels last year. New crop sales are at a record level for early April. China’s soybean imports in March were down 18.3 percent from last year. Its soybean imports in the calendar year 2022 are down 4.2 percent from 2021. Outlook: Soybeans continue to be well supported on pullbacks. U.S. planting weather, South American weather and harvest, and the war in Ukraine will remain in the headlines. Dryness has been creeping into areas of Argentina and Brazil. U.S. weather will eventually dry out enough to begin planting but any corn planting delays will diminish ideas that soybean acres may be switched to corn. China was largely absent this week from the export scene with just one small sale announced but there See NYSTROM, pg. 17
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.
