Exports, Harvest, Broilers & Ethanol, Markets Update & Rain Days 03/10/2022
The price outlook we have remains lower wheat into August with old and new corn and beans to make new highs in the May June time frame.
Yesterday’s USDA numbers were mildly bearish for both domestic and world wheat markets and friendly for both corn and beans.
Brazil’s soybean crop was reduced 7 million mt to 127 million and the Argentine crop was reduced 2 million mt to 43 million. All private estimates are less for both countries and the market fully expects USDA to be lower in the coming months. It is just the way USDA does things. By the way, Paraguay’s soybean crop was reduced a million mt to 5.3 million, about half a crop for those folks. Brazil’s bean exports were reduced by 5 and Argentina’s bean exports were reduced by 1 million mt while US soybean exports were increased 1.1 million mt (40 million bushels). China’s soybean imports were reduced from 97 to 94 million mt.
Ukrainian corn exports were reduced 6 million mt to 27.5 million, while Russia’s corn exports were left unchanged at 4.5 million mt as were Argentina’s at 39 million and Brazil’s at 43 million mt. China’s corn imports were left unchanged at 26 million mt.
Who do you think will supply those 6 million mt of corn exports Ukraine will not be shipping? USDA thinks the USA will do some because US corn exports were increased by 100 million bushels or about 3 million mt. USDA also increased corn for ethanol use by 25 million bushels, taking the US corn carryover down 3 days to a 35 day supply.
With a 40 million bushel increase in soybean exports, the US soy carryover was also reduced by 3 days to a very tight 24 day supply.
The Aussies' recently harvested wheat crop was increased by 2.5 million mt and their exports were increased by 2 million mt. Canada’s wheat exports were increased by 300,000 mt; Russia’s wheat exports were reduced by 3 million and Ukraine’s wheat exports were reduced by 4 million mt.
India was quick to announce they will fill the wheat export gap. India does have wheat to export about 50% of the years and India did have a great weather for wheat, so this is one of the year’s they will have wheat to export and it looks like about 7 to 9 million mt.
Attached is the translated version of the USDA S&D for wheat, corn and soybeans. Of all the numbers on that sheet, the important ones are just the three numbers on the far right column, namely the change in carryover in terms of days’ use for wheat, corn and beans.
0322 S&D
.xlsx
Download XLSX • 18KB
The national average price expected to be paid to farmers for the 2021 crops was increased for wheat (20 cents to $7.50), corn (20 cents to $5.65) and beans (25 cents to $13.25). Yesterday morning USDA announced sales of: 100,000 mts of old crop corn to Colombia 20,000 mts of old crop soybean oil to unknown
Supposedly, the crash in crude oil prices yesterday was triggered by the United Arab Emirates announcing it will increase crude oil sales to make up for the embargoed Russia oil.
Last evening, the basis for both corn and soybeans at the Gulf was 3 cents firmer for March and 2 cents firmer for April and May.
Canadian Pacific Railroad is planning to go on strike March 16. That will back up US corn sales to Canada.
Jordan cancelled its tender to buy 120,000 mts of wheat; the price is too high.
800+ MacDonald’s in Russia are being closed to protest the war. All employees will be paid 85% of their normal earnings.
Broilers & Ethanol Update
Last week: Broiler egg set was up slightly than the same week a year ago. Broiler egg hatch was down 1% than the same week a year ago. Average daily ethanol production: 1,028,000 barrels last week. 997,000 barrels the previous week. 938,000 barrels the same week a year ago. 1,044,000 barrels the same week two years ago. Ethanol inventory was 25.271 million barrels compared to 24.933 million barrels the previous week.
Market Data
This morning: Crude oil is at $112.93, up 4.21 The dollar index is at 98.24, up 0.27 July palm oil is at 6,248 MYR, down 134. The contract high was made yesterday at 6,531 MYR. Palm oil owns 36% and soybean oil owns 28% world market share. December cotton is at $101.86, up $0.17 per cwt. The contract high was made February, 10th at $106.36 per cwt. Cotton competes with soybeans and corn for acres. July natural gas is at $4.740, up 0.070. The contract high was made March, 7th at $5.270. Natural gas is the primary cost to manufacture nitrogen fertilizer. July ULSD is at $3.3121 per gallon, up 0.1865. The contract high was made yesterday at $3.7675. ULSD stands for Ultra Low Sulfur Diesel.
Rain Days Update
Yesterday, in the dry areas of South America: Santa Maria high temperature 94°F with 0.1 inches rain. Cordoba high temperature 80°F with 1 inch rain. Salto high temperature 71°F with 0.6 inches rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 2.21 inches, 74 to 84°F. Cordoba 0.33 inches, 76 to 87°F. Salto 0.28 inches, 77 to 88°F. The Western Corn Belt has 3 less rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 1 more rain days than yesterday.
