Market Moves, Export Inspections, Markets & Rain Days Update 03/29/2022
Highlights
Yesterday morning, the USDA announced the sale of:
132,000 mts of old crop soybeans to China
77,120 mts of old crop corn to unknown
50,800 mts of new crop corn to unknown
The two major factors CBOT prices were so weak Monday were:
1) China’s city of 28 million people, Shanghai, went to 100% COVID-19 lockdown. The market fears the infections will spread across the country and shut down most of China’s consumption of crude oil, as well as demand for all other raw materials. However, work or not, 1.4 billion people will still want to eat.
2) Peace talks were scheduled for Monday in Turkey. Yes, indeed, peace is at hand according to the media. The talks did not happen, but are scheduled for today.
However, news Monday was that the top negotiators for both sides were poisoned following peace talks in Kyiv earlier this month. They experienced peeling skin, red eyes, loss of eyesight and headaches. Do you suppose someone does not want the war to end?
Tampa, Florida is a major port for fertilizer. Anhydrous ammonia in Tampa surged to $1,625 per metric ton Friday, a record for the 29-year-old tracking history.
ABIOVE cut Brazil’s soybean production by 7.7% to 125.3 million mt; they lowered bean exports 9.2 million mt to 77.7 million. That is 338 million bushels. The US carryover is currently at 285 million bushels.
The new crop soybean to corn price ratio is at 2.21, the lowest since 2009. That indicates farmers will plant more corn and less beans. However, farmers we talk to indicate that will not be the case. While we do not expect a massive shift in acres this year, beans will be favored simply because the fear of not being able to get N even if paid for has spooked farmers to cotton, then beans, then spring wheat and then corn.
USA new crop wheat sales are at an 11 year high. No doubt because of the war between the world’s leading wheat exporters.
The wheat market seems to be suffering more from a lack of willing buyers rather than from heavy selling, which makes sense given the world’s biggest wheat buyers are well stocked. Last evening’s 6 to 10 day forecast finally has above to much above normal rainfall for the hard red winter wheat areas of the USA. Maybe they will have some wheat to cut after all.
Yesterday’s hard red winter wheat ratings for good to excellent:
KS +7% to 32%
OK -3% to 18%
TX +1% to 7%
CO -8% to 11%
Below is yesterday’s Weekly Inspections for Export Tracker:
Market Data
This morning:
Crude oil is at $105.21, down $0.75
The dollar index is at 99.04, down 0.05
July palm oil is at 5,777 MYR, down 31. 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 $111.52, up $0.22 per cwt. The contract high was made yesterday at $114.15 per cwt. Cotton competes with soybeans and corn for acres.
July natural gas is at $5.582, down 0.054 The contract high was made yesterday at $5.796. Natural gas is the primary cost to manufacture nitrogen fertilizer.
July ULSD is at $3.1804 per gallon, down 0.0004. The contract high was made March, 9th 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 89°F with 0 inches rain. Cordoba high temperature 96°F with 0 inches rain. Salto high temperature 88°F with 0 inches rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 4.57 inches, 66 to 89°F. Cordoba 0.29 inches, 66 to 87°F. Salto 0.15 inches, 65 to 79°F.
The Western Corn Belt has 3 less rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 6 more rain days than yesterday.
Explanation of Rain Days
Every day, every place in the world has a ten day weather forecast issued many weather services.
By a "place", we mean a Findlay, Ohio; Arcadia, Minnesota; Atlantic, Iowa; Fullerton, Nebraska; Cordoba, Argentina; Craig, Colorado, Saratov, Russia and ten million localities we have never heard of.
The ten day forecast predicts the high and low temperature for each day as well as whether or not rain is predicted for each of the ten days, likewise cloudy, partly cloudy, sunny, etc.
We look at the ten-day forecast and if we see rain is predicted for 4 of the next 10 days, we record a "4" for that location on the chart for the today. It does not matter whether it is one-hundredth of an inch or 5 inches. We realize about half the days expected to receive rain never get rain that day, but we must be consistent in what we report each day and every day because rain makes grain a few key weeks of the growing season. Of course, we scan the temperatures and the amounts of rain just to see if anything is getting way out of the norm.