Tidbits & Rain Days, NOPA Crush, Lower SA Production 02/16/2022

March options expire this Friday, February 18.

Radio reports here in the US yesterday afternoon were “a massive cyberattack has hit Ukraine.” Multiple websites in Ukraine are unreachable, including the Ministry of Defense, the Armed Forces, Privatbank, and Oschadbank.

Corn was probably hurt most yesterday by a University of Wisconsin study in conjunction with the National Academy of Sciences reported ethanol is likely a much bigger contributor to global warming than straight gasoline. Historically, the National Academy of Sciences is a very liberal organization that back in the ‘50’s and ‘60’s was classified by the FBI as a communist organization.

The bird flu in four states is not helping corn or bean meal.

USDA reported yesterday the export sales of:

53,500 mts of old crop soybean oil to Mexico

47,500 mts of new crop soybeans to Mexico

NOPA January soybean crush was 182.216 mil bushels, well below the market’s expectation of 186.677 mil bushels and down 1.3% from a year ago. I realize NOPA has one less member now than a year ago, so perhaps the market forgot that little tidbit when it estimated the size of the January crush. The soybean crush margin in January 2021 averaged $1.57 per bushel; January 2022 the soybean crush margin was $3.71. Who truly believes the remaining NOPA members crushed fewer beans than a year ago?

The September to January NOPA soybean crush is 886 million bushels, down 1.1% from a year ago, but a year ago they had 13 members; now only 12.

Dr. Cordonnier lowered his Brazilian soybean production estimate by 6 million mt to 124 million (USDA at 134) and lowered his Argentine soybean estimate by 2 million to 40 million mt (USDA at 45).

AgroConsult cut their 2021/22 Brazil soybean crop estimate by 8.4 million mt to 125.8 million.

Paraguay’s Ag Minister said their soybean crop could be as low as 5.0 million mt compared to 9.9 million mt last year (USDA is at 6.3).

SovEcon (Andrey Sizov) raised their 2022 Russian wheat production estimate by 3.6 million mt to 84.8 million.

Big snows and severe thunder storms are expected for the Southern Plains into the east today and Thursday. Heavy snow band expected from North Central Oklahoma and Eastern Kansas across Missouri and into the Great Lakes States. Good moisture for maybe 30% of the Hard Red Winter wheat area.

The Producer Price Index (PPI) is the measure of inflation the wholesale level. The January PPI was up 9.76% from a year ago and rose 1% in January; that would be an annual rate of 12%.

CF Industries (huge nitrogen fertilizer manufacturer) fourth quarter earnings were up 700% at $859 million from $119 million a year ago. Earnings per share were $3.27, 40 cents below expectations! Their revenue more than doubled from a year ago to $2.54 billion, which was as expected. The average cost of natural gas for CF Industries was $6.00 per MMBtu compared to the year-ago cost of $2.60 per MMBtu.

CF said it "expects the global nitrogen supply and demand balance to remain tight for the foreseeable future.” CF Industries shares were up 61% in 2021.

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Market Data

This morning: Crude oil is at $92.53, up 0.46 The dollar index is at 95.88, down 0.11 March palm oil is at 5891 MYR, up 22. The contract high was made yesterday, at 5,965 MYR. Palm oil owns 32% and soybean oil owns 28% world market share. March cotton is at $122.86, down 0.18. The contract high was made February, 1st at $129.37 per cwt. Cotton competes with soybeans and corn for acres. March natural gas is at $4.445, up 0.139. The contract high was $6.132 at October, 6th, 2021. Natural gas is the primary cost to manufacture nitrogen fertilizer. March ULSD is at $2.8790 per gallon, up 0.0195. The contract high was made February, 14th at $2.9666.

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Rain Days Update

Rondonópolis, Mato Grosso, in the heart of Brazil's most productive soybean area, received 0.6 inches of rain yesterday; 0.4 inches a year ago and 0.7 inches two years ago (one inch = 24.5 mm). Yesterday's high temperature was 85°F. Day time highs the next ten days will range from 84 to 90°F (100°F = 38°C). Yesterday, in the dry areas of South America: Santa Maria high temperature 99°F with 0 inches rain. Cordoba high temperature 103°F with 0 inches rain. Salto high temperature 108°F with 0 inches rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 0.99 inches, 87 to 95°F. Cordoba 0.81 inches, 77 to 93°F. Salto 0.85 inches, 80 to 95°F. The Western Corn Belt has 3 more 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