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Fertilizers, Ukranian Grain, Export Sales, Markets & Rain Days Update 04/15/2022

Highlights


USDA announced yesterday morning the sale of 132,000 mt of old crop soybeans to China.

Yesterday’s mid-day weather updates predicted rain next week to move north from Texas into Oklahoma, Central Kansas, and Eastern Colorado.

The US Producer Price Index (PPI) is the measure of inflation at the wholesale level of an economy. In March, the US PPI was up 11.2% from a year ago. That is getting close to the 13.9% CPI gain in 1979.

CF Industries is one of the world’s big three fertilizer manufacturers and probably the largest nitrogen producer. Union Pacific told CF to reduce its shipments by nearly 20% effective immediately as UP was mandating certain shippers reduce the volume of their privately owned rail cars on its railroad. Apparently UP wants their cars to haul the fertilizer. The problem is UP does not have enough cars.

Affected products include urea, urea ammonium nitrate, and DEF. CF's top dog CF Industries will ask the US government to prioritize fertilizer shipments so that spring planting is not harmed.

December 2023 corn futures have gained 97¾ cents and settled higher 21 consecutive days. Nobody alive has ever seen any commodity contract do that before. Soybeans settled higher 14 consecutive days in late 2020. Before that, Roger can remember 9 consecutive up days with copper and silver the past 40 years.

 

Russian Navy flagship Moskva was confirmed sunk off the coast of Ukraine where it was maintaining a blockade of two grain ports, Odessa (by far most important grain terminal) and Nykolaev in southwest Ukraine. Maybe some grain will be shipped from Odessa after all.

Jordan announced it will divert water from cities to irrigation to expand its wheat and barley acreage. Over the last 25 years, the oil rich Mideast countries all shut down wheat production to send water to the cities and industries. That is why the Middle East is the destination for the vast majority of wheat exports.

Latvia is ready to help Ukraine with grain exports through Latvian ports. But Ukraine cannot get the rail cars flowing across the border into Poland to get to Latvia.

The world’s largest shipping company, Maersk, has stopped accepting new bookings on all of its services to and from Russia and will sell all of its assets in Russia following its annual meeting of shareholders.

There are nine oil seeds which compete for market share. Palm oil has 36% share, followed by soy oil at 28% share. At the bottom of the market share list is olive oil at 2 to 3% of world market share. Olive oil consumption has exceeded world production each of the last three crop years and the carryout is just about gone so says International Olive Council (IOC).

Sri Lanka said it will default on its foreign debts. Mass protests over major power cuts and the soaring cost of food and fuel, government officials are urging Sri Lankans working abroad to send money home.

Gulf corn and bean basis levels were mostly steady yesterday.


 

Export Sales Update


Below is yesterday’s Weekly Export Sales Tracker.


 

Market Data


This morning: Crude oil is at $106.54, up $2.29 The dollar index is at 100.52, up 0.20 July palm oil is at 6,260 MYR, up 137. 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 settled at $122.48, up $0.30 per cwt. The contract high was made yesterday at $124.36 per cwt. Cotton competes with soybeans and corn for acres. July natural gas settled at $7.501, up 0.328. The contract high was made yesterday at $7.548. Natural gas is the primary cost to manufacture nitrogen fertilizer. July ULSD settled at $3.5024 per gallon, up 0.0951. The contract high was made March, 9th at $3.7675. ULSD stands for Ultra Low Sulfur Diesel.


 

Rain Days Update


The Western Corn Belt has 3 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 3 more rain days than yesterday.


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