Highlights
Corn and beans made highs last Wednesday. Everyone knew then that the USDA would issue one of the most important crop reports tomorrow. That meant the market would be headed lower no later than Monday on profit taking, classic "evening-up" of futures positions. It also meant the market would overdue the sell-off to the downside and, therefore, recover some of the losses before the report was released mid-day Thursday. While it is entirely possible news from Ukraine and Russia could upset the traditional market action, so far everything the markets have done since Wednesday have been predictable and, believe it or not, pretty routine for late March. The USDA Intended Planted Acreage and Quarterly Grain Stocks reports are always issued the last business day of March. ten minutes after the report on Thursday and the we will be back to weather and demand.
Global shipping giant Maersk says the COVID lockdown of Shanghai, China will cause delays and drive up transport costs, making shipping containers more difficult to access. The oceans carry more than 80% of the world’s traded goods, most of which sail inside 40-foot-long steel containers.
Poland banned coal imports from Russia.
The world’s largest beer producer is Ab Inbev with a global market share of ~28%. They produce the Anheuser-Busch family of beers as well as Stella Artois, Corona, Castle, Beck's, Leffe and Hoegaarden beers. Ab Inbev announced no more beer to Russia. Does Putin drink beer?
US Secretary of State Blinken believes that Russia's announcement of reduction in hostilities around Kyiv could be a "means by which Russia is again trying to divert attention and deceive people into thinking that it is not doing what it is doing." The leaders of the USA do not want this war to end. Even if Russia is lying, it does not help negotiations when the President of Ukraine and the lead US diplomat kick sand in the face of the Russian negotiators when they say something that indicates they are willing to slow down their war effort.
JP Morgan Chase, Goldman Sachs, Morgan Stanley, and Deutsche Bank announced they were curtailing their business in Russia.
France’s President Macron told Putin yesterday that paying for natural gas in rubles was not possible. After the gas gets shut off in France, he may change his mind. Will Putin do that? A French economist responded, We are suffering the full force of inflation. We are not in a position to refuse Russia's request. It won't be long before we agree to pay in rubles...
Wheat buyers for Egypt will visit India next week to make a wheat deal because Black sea wheat is unavailable and North American wheat is too expensive.
Diesel fuel shortages in Argentina has resulted in rationing. Corn and bean harvest gets hot and heavy in April.
After near perfect weather from the beginning of Brazil’s second crop corn planting in January, some extended weather models predict a lack of significant rain for the main corn area of Brazil from about April 10th for several weeks at least. The 20% of the crop in late February and early March will be in deep trouble in May when it needs to be pollinating.
China will offer to sell 500,000 mts of imported soybeans in government reserves. That is 18.375 million bushels and it will all need to be replaced. Here is the kicker: The Chinese soybean crusher, Rizhao & Tianjin, which bought 270,000 mt at the last government auction of imported soybeans on March 14th, has not been able to get the soybeans from the local reserve warehouse. Does that situation make crushers want to buy more or step back?
HPAI avian flu update as of March 27 (through Sunday). All data from USDA APHIS:
Market Data
This morning:
Crude oil is at $105.95, up $1.71
The dollar index is at 98.15, down 0.25
July palm oil is at 5,736 MYR, down 98. 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 $111.94, up $0.90 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 $5.407, down 0.031 The contract high was made March, 28th at $5.796. Natural gas is the primary cost to manufacture nitrogen fertilizer.
July ULSD is at $3.1622 per gallon, up 0.0138. 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 92°F with 0 inches rain. Cordoba high temperature 90°F with 0 inches rain. Salto high temperature 73°F with 0.1 inches rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 4.85 inches, 68 to 78°F. Cordoba 0.26 inches, 65 to 83°F. Salto 0.09 inches, 63 to 78°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.
Explanation of Rain Days