Yesterday morning, the USDA reported the following sales:
198,000 mts of old crop soybeans to unknown
66,000 mts of new crop soybeans to unknown
198,000 mts of old crop soybeans to China
68,000 mts of new crop soybeans to China
The Ukraine/Russia meeting that was scheduled to be in Belarus yesterday was canceled. Ukraine reportedly decided they were not willing to enter Belarus again. No date or location was announced at the time of the cancellation notice. Much later yesterday, it was reported a meeting between Russia and Ukraine will be held this morning on the Belarus/Ukraine border.
Russian forces have captured the Black Sea Port city of Kherson, an important port on the Black Sea at the mouth of the Dnieper River. It is home to about 280,000 people and a major ship-building industry. It is the first city of Ukraine to fall to the Russians.
There are nine Russian and Ukrainian Black Sea ports which load 29% of world’s wheat exports. They are all closed this week and will most likely stay that way for the duration of the conflict.
StoneX Brazil left their corn production estimate unchanged at 116.1 million mt and reduced their soybean estimate by 5.3 million mt 121.2 million. That is another 194 million bushels fewer soybeans Brazil will have to export this summer. Certainly, the US will replace most of those beans, if not all. How many the US will replace depends on how high the price goes this spring and summer, but 194 million bushels off the current carryover projection by USDA would take the US carryover to an 11 day supply. On the February S&D, the USDA projected the US carryover would be a 27 day supply on August 31st. The next USDA revision will be March 9th.
The futures contracts of old crop corn and beans have exceeded the highs for old crop corn and beans last year. Likewise, the futures for December corn and November beans have exceeded last year’s highs for the same new crop months
Expanding drought conditions in the US is becoming a more bullish factor every day, especially for Hard Red Winter Wheat.
The chart below tracks for 12 months the deviation from normal of the Equatorial Pacific surface temperature. When the temperature has been at least a half degree C below normal for 60 consecutive days, the world will have a La Niña episode. When the temperature has been a half degree C above normal for 60 consecutive days, the world will have an El Niño episode.
The box outlines the half degree variation range. The water temperature returned to within a half degree C of normal the first part of January. That means world weather will return to normal in the first part of March. This is the most reliable 30 to 60 day weather forecast available and it predicts a spring with normal weather, which can still be too wet or too dry and stay within “normal” parameters.
To learn more about La Niña and El Niño episodes, go to:
Broilers and Ethanol
Broiler egg set was down 1% than the same week a year ago.
Broiler egg hatch was down 1% than the same week a year ago.
Average daily ethanol production:
997,000 barrels last week.
1,024,000 barrels the previous week.
849,000 barrels the same week a year ago.
1,079,000 barrels the same week two years ago.
Ethanol inventory was 24.933 million barrels compared to 25.507 million barrels the previous week.
This morning: Crude oil is at $115.37, up $4.77 The dollar index is at 97.50, up 0.11 July palm oil is at 6,291 MYR, up 359. The contract high was made today at 6,337 MYR. Palm oil owns 36% and soybean oil owns 28% world market share. December cotton is at $101.48, up 67 cents 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 $5.002, up 0.128. The contract high was made February, 2nd at $5.121. Natural gas is the primary cost to manufacture nitrogen fertilizer. July ULSD is at $3.1533 per gallon, up 0.1226. The contract high was made today at $3.1912. ULSD stands for Ultra Low Sulfur Diesel.
Rain Days Update
Yesterday, in the dry areas of South America: Santa Maria high temperature 84°F with 0.2 inches rain. Cordoba high temperature 98°F with 0 inches rain. Salto high temperature 91°F with 0 inches rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 3.05 inches, 81 to 96°F. Cordoba 1.70 inches, 74 to 88°F. Salto 1.33 inches, 78 to 89°F. The Western Corn Belt has 3 less rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 1 less 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.