Marketing

Grain Outlook Corn crop future is up in the air

The following marketing analysis is for the week ending May 13. CORN — Corn extended the previous week’s losses as traders returned from the weekend and then spent the balance of the week trying to work out of the hole. On May 9, July corn traded to its lowest point since April 11 — along with equity and energy markets. It’s not unusual for corn prices to see a pullback in early May when planters begin to roll across the Midwest. Troublesome planting weather, ongoing events in Ukraine, dryness in Brazil, and positioning for the May 12 World Agriculture Supply and Demand Estimates report contributed to PHYLLIS NYSTROM the recovery. The big news this CHS Hedging inC. week was the WASDE report and St. Paul planting delays, so we’ll dig into those first.

The 2021-22 balance sheet was unchanged with the carryout at 1.44 billion bushels. The average farm price increased 10 cents to $5.90 per bushel. The trade was anticipating stocks to fall to 1.403 billion bushels. World ending stocks climbed to 309.4 million metric tons from 305.5 mmt previously, and 303.2 mmt estimated. China’s corn imports were unchanged at 23 mmt. Brazil’s corn crop was left at 116 mmt and Argentina’s production was unchanged at 53 mmt. Ukraine’s corn exports were left unchanged at 23 mmt.

The 2022-23 U.S. corn balance sheet held one of the biggest surprises when the U.S. Department of Agriculture slashed the yield 4 bushels per acre to 177 bu./acre! The average estimate was 179.6 bu./ acre. This is only the sixth time they have lowered the yield from trendline on the May report. Acreage was as expected at 89.5 million acres. Production was 14.46 billion vs. 14.77 billion estimated. The year-onyear cut to feed and residual of 275 million bushels to 5.35 billion bushels caught traders’ attention. There is skepticism that a decline as aggressive as this (nearly 5 percent) is warranted this early. Ending stocks were 1.36 billion bushels compared with 1.335 billion estimated.

For 2022-23, world ending stocks were pegged at 305.1 mmt vs. 296.1 mmt estimated. This would be down from the projected 309.4 mmt this year. China’s corn imports showed a year-on-year decline to 18 mmt vs. 23 mmt in 2021-22. Brazil’s corn crop is fore-

Cash Grain Markets

corn/change* soybeans/change*

St. Cloud $7.76 +.08 $16.53 +.52 Madison $7.87 +.09 $16.23 +.47 Redwood Falls $7.91 +.15 $16.33 +.57 Fergus Falls $7.71 +.08 $16.28 +.47 Morris $7.91 +.18 $16.33 +.53 Tracy

$7.88 +.18 $16.28 +.58 Average: $7.84 $16.33 Year Ago Average: $6.97 $15.36

Grain prices are effective cash close on May 17. *Cash grain price change represents a two-week period.

cast to jump to 126 mmt and Argentina’s to 55 mmt. Ukraine’s crop was estimated at 19.5 mmt with exports at less than half of this year at just 9 mmt.

U.S. corn planting as of May 8 was only 22 percent complete compared to 50 percent on average and 25 percent expected. This was the second-slowest planting pace since 1993. Iowa was 14 percent planted vs. 63 percent average; Illinois 15 percent planted vs. 58 percent average; and Minnesota 9 percent planted vs. 48 percent average.

The fastest week-on-week corn planting progress in the United States was the week of May 19, 2013, when we planted 43 percent of the crop. The average planting for May 15 is 67 percent complete which means we’d have to make record progress of 45 percent in a week marred by heavy damaging storms in the upper Midwest throughout the week. In Minnesota, the most we’ve planted in a week is 65 percent; 64 percent in Iowa; and 57 percent in Illinois (data is courtesy of the Senate Ag committee).

According to a study, corn yields can decline by 0.3 percent per day when planting is delayed in early May and rises to 1 percent per day by the end of May. Corn emergence on May 8 was only 5 percent vs. 15 percent on average. There is talk we may lose corn acres to another crop, or not get planted at all, in parts of the Dakotas and Minnesota. Will the lure of high prices make growers more willing to plant later, or will input costs/availability and insurance dates limit that choice?

Weekly export inspections (what is shipped) were as expected this week at 54.8 million bushels. Total inspections for the marketing year are 1.495 billion bushels of the 2.6 billion bushel export forecast. Weekly export sales for old crop were a marketing year low at 7.6 million bushels. Cumulative old crop sales are 2.3 billion bushels. Weekly sales need to average 10.2 million bushels per week to reach the USDA target at 2.5 billion bushels. China has purchased approximately 561 million bushels of old crop U.S. corn so far. New crop sales were 1.8 million bushels to bring cumulative sales to 196.5 million bushels. China has purchased 86.6 million bushels of new crop U.S. corn vs. zero last year. We finally saw our first daily export sales flash this week since April 28 when China bought 2.7 million bushels of old crop corn and 21.4 million bushels for new crop.

Dry weather is affecting Brazil’s safrinha corn crop and now there’s the possibility of a frost as early as next week. Conab cut its Brazilian corn estimate this week to 114.6 mmt. The USDA left its outlook unchanged on the May report at 116 mmt. Brazil’s first corn harvest as of May 9 was right on the average at 89 percent complete.

President Biden, in his speech from an Illinois farm the intention to double funding for domestic fertilizer production to $500 million, provide more access to farm management tools for plant and soil needs, and increase the number of counties eligible for double cropping insurance. Will this help add production?

Outlook: December corn posted a reversal higher on the weekly technical chart after setting a new contract high at $7.58.5 per bushel. For the week, July corn fell 3.5 cents to $7.81.25 and December rallied 28 cents to close at $7.48.75 per bushel.

Planting weather and progress in the United States will be watched closely over the next two weeks. Brazil’s safrinha corn crop status will also be monitored. The market will be wanting to see continued demand both domestically and on the export side. Historically, corn bounces after its early May setback.

Developments in Ukraine will also demand attention. President Biden said in his speech this week the United States is seeking ways to help Ukraine export 20 mmt of grain through alternative channels. Ukrainian President Zelenskyy predicts world food shortages will get worse if Ukraine can’t export its grain. Russia continues to attack and block the port of Odesa.

We need favorable crop conditions to avoid ending stocks falling below 1 billion bushels and we haven’t started with them. Outside macroeconomic factors will likely spillover to influence commodity prices as well. Buckle up, the ride hasn’t come to a complete stop. SOYBEANS — Soybeans followed the same pattern as corn with big losses on May 9 followed by four straight higher closes. Soybean planting was 12 percent complete as of May 8 compared to 24 percent on average and 16 percent expected. Illinois was 11 percent planted vs. 30 percent on average and Iowa was 7 percent planted vs. 34 percent on average. Emergence was 3 percent vs. 4 percent on average.

Covid lockdowns continue to be enforced in China as they pursue a zero-tolerance policy. This is hurting demand for commodity imports as well as causing big delays throughout the world supply chain. We saw China buy 4.85 million bushels of old crop soybeans late in the week. This was the first announced sale in

See NYSTROM, pg. 17

NYSTROM, from pg. 16

over two weeks. It was rumored China bought up all the Brazilian soybeans offered for the June time slot this week. Is the United States next in line for additional business?

The 2021-22 soybean carryout is the lowest in six years at 235 million bushels but was slightly larger than the 221 million bushel estimate. This was arrived at by increasing exports by 25 million bushels to 2.14 billion bushels. This cut the ending stocksto-use ratio to 5.3 percent. The average farm price was unchanged at $13.25 per bushel. World ending stocks were projected at 85.2 mmt, below the 88.8 mmt estimate. China’s imports were forecast at 91 mmt vs. 91 mmt expected. Brazil’s soybean crop was unchanged at 125 mmt and Argentina’s was lowered by 1.5 mmt to 42 mmt.

In our first official look at the U.S. 2022-23 balance sheet, acreage and yield were unchanged from the March Prospective Planting report at a record 91 million acres and 51.5 bu./acre. Production would come in at a record 4.64 billion bushels. Year-on-year crush showed a 1.8 percent increase to 2.255 billion bushels and exports up 2.8 percent to 2.2 billion bushels. Ending stocks are expected to grow to 310 million bushels and ending stocks-to-use ratio to 6.8 percent. The average farm price is forecasted at $14.40 per bushel.

The world soybean ending stocks for 2022-23 came in at 99.6 mmt compared to the 97 mmt estimated. China’s imports are expected to grow to 99 mmt. They just don’t seem to be able to push through 100 mmt. Have they plateaued? Brazil’s 2022-23 soybean crop was projected at 149 mmt! Keep in mind last fall before La Niña kicked in their crop was originally estimated in the 145 mmt area. Argentina’s soybean crop next year was forecasted at 51 mmt.

Weekly export inspections at 18.5 million bushels were on the low end of expectations and brought total shipments to 1.75 billion bushels. Weekly export sales for old crop were at a marketing year low at 5.3 million bushels, bringing cumulative sales to 2.15 billion bushels. The new export forecast is 2.14 billion bushels with slightly less than four months left in the marketing year. New crop sales were 2.9 million bushels with cumulative sales of 412.5 million bushels. This is a record for new crop sales for this time of year.

Soyoil continues to provide support to the soybeans. Malaysia is considering cutting its export tax on palm by as much as half from the current 8 percent tax. Malaysia is the second-largest palm oil producer in the world. Outlook: For the week, July soybeans rallied 24.5 cents to $16.46.5 and November soybeans gained 27.5 cents at $14.98.25 per bushel. The rally came this week despite the U.S. dollar running to a 20-year high. Planting weather will be monitored closely in the next week to see if planting can progress significantly. The same factors mentioned in the corn comments apply to the soybean market, but later corn planting may push additional acres to soybeans. We’ll continue to expect elevated volatility in the weeks ahead. Manage your risk!

Weekly price changes in July wheat for the week ended May 13: Chicago wheat was 69 cents higher at $11.77.5, Kansas City soared $1.11.5 to $12.82, and Minneapolis rocketed $1.16.25 to $13.25 per bushel. Minneapolis and Kansas City wheat raced to new contract highs through the week on rain delayed planting in the upper Midwest. India and Pakistan are facing extreme heat, and the EU dryness, which will hurt wheat production. Chicago wheat made new highs in the deferred months. U.S. winter wheat ratings as of May 8 were up 2 percent from the previous week at 29 percent good/excellent. Winter wheat ratings have been below 30 percent good/excellent only twice before for this week in 1996 and 1989. v

www.TheLandOnline.com Applications open for organic programs

Certified organic and transitioning to organic agricultural producers and handlers can now apply for the Organic and Transitional Education and Certification Program and the Organic Certification Cost Share Program. These U.S. Department of Agriculture programs help producers and handlers cover organic certification cost and other related expenses. Applications are open now and due Oct. 31. The two USDA programs cover costs incurred from Oct. 1, 2021, to Sept. 30, 2022. Organic and transitioning agricultural producers should contact their local Farm Service Agency office and/or participating State agency to apply.

“If someone is considering getting certified, they should definitely look into the program as it can reduce some of the financial burden,” says organic farmer and OFRF Board Chair Bryan Hager.

More information is available at https://www.farmers.gov/pandemic-assistance/.

This article was submitted by the Organic Farming Research Foundation. v

‘I encourage young women to get involved in agriculture’

CYPHERS, from pg. 12

I was born and raised in Fairmont, Minn. and lived two different lifestyles. When with my mom, I did things in town such as visit family, go on walks, or watch her tend to house plants. With my dad, I did things around his farm rental such as dirt bike, hop in a tractor, or ride with him as he hauled grain. So, I understood an agriculture lifestyle, but I wasn’t immersed in it, and would rarely see someone like me, a female, in an agriculture career.

Fast forward to a few years after High School, I saw many females excel in or enter agriculture careers. My view quickly changed, but I still didn’t think agriculture was a career for me as I wasn’t immersed in it. During this time, I stayed in the Bacon Capital, but moved to Truman, Minn. where I enjoy the rural lifestyle.

After my dad retired, we worked with a non-profit that would ship donated, restored farm equipment to Africa. My dad would go to the community to teach sustainable farming. Being involved with this as an adult taught me how agriculture impacts our region and the world — and showed me the fun you can have in agriculture.

In 2018, I went back to South Central College full-time and learned about a new Business Transfer Pathway to Minnesota State University, Mankato. I had a background in marketing and was encouraged to pursue accounting, so I took the Pathway to MNSU majoring in marketing and minoring in accounting.

While at MNSU, I spotted GreenSeam promoting the Agribusiness and Food Innovation minor. I contemplated switching my minor, but I could only imagine working for a non-profit such as the one I had volunteered at, which is in a large city, and I did not want to leave my rural lifestyle. Boy, was I wrong! There are many options for everyone in agriculture no matter where you grew up, the amount of education you have completed, the educational program you are in, or what gender you identify as.

Inclusivity in the ag industry is growing rapidly and I can’t wait to help spread the news and encourage those interested, especially young women, to get involved in agriculture. If I can pass one bit of advice, it would be to keep an open mind and never stop searching for a dream career, you will find it!

Michalia Cyphers is a Program Manager at GreenSeam and the GreenSeam Talent Committee Staff Lead. She can be reached at mcyphers@greenseam.org. v