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Market Commentary 04/03/2022

Jon Scheve with weekly market commentary made on April, 01, 2022

In their spring plantings intention report, the USDA surprised the market with 2.5 million fewer corn acres and 2.5 million more bean acres than the market had anticipated. However, the total 180.44 million combined acres estimate between the two crops was very close to market expectations. It seems higher fertilizer prices and the potential future growth of soybean biofuels may have incentivized some farmers to adjust their rotations to plant more beans than usual. Now many market participants are left wondering if farmers will actually plant that many more bean acres at the expense of corn. It seems likely after this report, and the subsequent corn futures price rally and bean price pullback, that some planned bean acres could switch back to corn. Unfortunately, we will have to wait until the June 30th report to know how many acres that will be. Looking Forward The market will now turn its attention back to the war in Ukraine and whether the corn and wheat trapped in storage there can find its way to end users needing product throughout the world. Additionally, the market will be watching closely to see how many acres of new crop the farmers there can get planted over the next two months. If Ukraine grain remains trapped and spring plantings are down, South America and the US will have to fill a large void. Brazil’s weather over the next 45 days will be crucial for their second corn crop development. While rain there has been timely, it has been below normal. Corn has not reached the tassel stage, so limited moisture is not as critical as it will be moving forward. Spring planting will start throughout most of the Midwest in less than 2 weeks. This means the market will be impacted more by weather variability throughout the US very soon. The market will be counting on normal yields, so any hint of a yield reduction could send a nervous market much higher. Market Action After the report was released, I made my second 2022 corn crop sale when an order to sell at $6.90 was triggered. I’m now 20% sold with futures on my anticipated new crop production.

Jon Scheve Superior Feed Ingredients, LLC

9358 Oak Ave Waconia, MN 55387

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