Now read this and take it to heart: US farmers are going to plant at least 1.5 million more acres of corn and at least 1.5 million fewer acres of beans this spring than reported by USDA yesterday. Not only does the acreage always switch from March to June every year the USDA throws shocking acreage numbers March, the numbers justify the switch! A few days ago, we mentioned the corn price to soybean price ratio was the lowest (2.2:1) since 2009! That screams to plant more corn and less beans. Farmers who do the cost numbers have been saying for months they can make a ridiculous amount of money with corn even with nitrogen at current prices. We had already stated the corn situation looked like you will need to be pricing corn in early spring and beans quite a bit later. Now it looks like perhaps the bean sales as late as the first week of July, which would be a few days after the USDA Actual Planted Acres Report the last business day of June. World-wide respected wheat market analyst, Andrey Sizov, said last evening he is becoming more bearish wheat.
Crude oil took a $9 hit yesterday because the Biden administration authorized the release of one million barrels a day from the nation’s strategic oil reserve for the next six months. Biden said this will be enough to fill the fuel shortage along with an increase of US domestic oil production before the end of this year. Biden added this action will be coordinated with allies and partners around the world. Biden said:
We have already received promises from various countries that they will release tens of millions of barrels of oil to the market. Thus, the total amount of oil released will significantly exceed a million barrels per day.
This action is already priced into the market, Folks. If you need to get some more fuel locked-in, this is the break you need to buy futures or contact your fuel supplier and see if cash prices come down in a few days as they usually do after crude prices decline. The Biden administration is considering temporarily removing summer restriction for E15 gasoline (contains 15% ethanol) as a way to reduce US fuel costs for consumers. E10 is the standard for road use gasoline. You may recall we suggested using more biofuels to reduce the use of expensive petro products when Big Oil was suggesting using less biofuels to keep food prices down.
Political pressure is building to remove economic sanctions on Russia. The UN Human Rights Council (HRC) at its 49th session in Geneva called on its members to stop adopting unilateral sanctions, condemning sanctions as a means of political and economic pressure. Of the 47 committee members, 27 voted for the measure condemning the sanctions.
Among the 27 members voting for the measure of condemnation of the sanctions were China, India, and, believe it or not, Russia while 14 member nations, including the US, EU, UK and, believe it or not, Ukraine, voted against the measure. Six delegations abstained from voting, including Brazil (which desperately needs Russian fertilizer) and Mexico.
In Shanghai, where the COVID locked-down 26 million people, residents are fighting each other like starving wolves over the few remaining packages of food in the barren grocery stores. The potential is great for really ugly things to happen in China. Is that bullish for beans or bearish?
The Russian military removed millions of dollars’ worth of John Deere equipment from a very large farm in Ukraine. The equipment made it out of the country to the Russian state of Chechnya before the Deere installed GPS tracking system found its location. Now, the question is: Who will go get it?
Export Sales Update
The numbers chart below is the Weekly Export Sales and our Tracker from USDA yesterday morning.
This morning: Crude oil is at $97.90, down $2.38 The dollar index is at 98.54, up 0.23 July palm oil is at 5,322 MYR, down 205. The contract high was made March, 9th at 6,531 MYR. Palm oil owns 36% and soybean oil owns 28% world market share. December cotton is at $110.74, down $0.54 per cwt. The contract high was made March, 28th at $114.15 per cwt. Cotton competes with soybeans and corn for acres. July natural gas is at $5.712, down 0.044 The contract high was made yesterday at $5.943. Natural gas is the primary cost to manufacture nitrogen fertilizer. July ULSD is at $3.0549 per gallon, down 0.0542. The contract high was made March, 9th at $3.7675. ULSD stands for Ultra Low Sulfur Diesel.
Rain Days Update
It is April first. Corn and soybean harvest has already begun in the drought areas of Southern Brazil and Argentina. Therefore, we no longer report the daily weather specifics the previous day nor the next ten days for Santa Maria, Cordoba and Salto. You can maintain a good handle of the weather in those locations by checking the predicted rainfall in our Rain Days chart.
The Western Corn Belt has 3 less rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 6 less rain days than yesterday.