The markets, postal service and banks are closed Monday.
USDA reported yesterday the export sales of:
132,000 mts of new crop soybean to China
After Russia reported it was moving troops away from the Ukrainian border, the US State Department reported yesterday afternoon more Russian forces were moving to the Ukrainian border into “combat” positions. The US sent 500 soldiers from the 101st Airborne Division at Fort Campbell to Poland yesterday. That puts 4,200 hundred additional troops moved to Poland in the last two weeks.
A fire at the Louis Dreyfus Company (LDC), Claypool, Indiana soybean processing and biodiesel plant supported meal and soyoil while a sharp rise in Brazilian basis supported beans yesterday. The Claypool plant's daily capacity is 175,000 bushels of beans. It has been running at 95% of capacity. LDC says Claypool is the largest soybean integrated processing plant in the USA.
Soybean oil prices in Brazil hit an all-time high yesterday afternoon and crush margins are popping higher.
Brazil’s soybean basis at the ports jumped 20 cents for nearby shipment and 10 to 12 cents in the deferred months.
Paraguay’s oilseed crushers association has asked the government for import tariffs be removed so they can import soybeans to sustain their crushing operations. They can crush 470,000 bushels per day. Most official estimates have Paraguay’s bean crop at 5 to 6 million mt. The crushers say 4 million mt is more accurate.
China is trying to break the soybean market... again. They are saying soybean imports will be reduced 30% (30 million mt) over the next three years.
Meanwhile, China has booked 1.7 million mt of new crop US soybeans so far in 2022, very close to last year’s record large pace.
Average futures closing price in February on November beans is $14.19½. It is record high for February revenue insurance setting period. The 5-year average for February is $10.14¾.
The average futures closing price on December corn to date is $5.83¾, the 2nd highest since the 2011 crop year when December corn averaged $6.01¼. The 5-year average is $4.07½.
Minneapolis September futures are averaging $9.00¾ with 2008 at $11.10 and 2011 at $9.88¾ and
well above current levels.
Belaruskali is a Belarusian potash company has declared force majeure on potash shipments following Ukraine’s stoppage of rail traffic yesterday. Belaruskali produces 20% of the world’s potash, much of which is loaded on ships at the Ukrainian Black Sea Ports, which have been blockaded by the Russian Navy as it conducts “missile tests” all across the Ukrainian Black Sea costal region.
March options expire on Friday and the big specs look like their target for a settlement on Friday is $16.00 March beans, $6.50 March corn and $8.00 in Chicago wheat. They always target a strike price that cause the largest number of call and put options to expire worthless.
The Tech Guy provides a little education:
March Wheat had an ID/NR7 day. It stands for inside/narrow range day - smallest range of the previous 7 days. The day or two after this occurrence, we normally see the market have an expanded day - break up or down, because of the energy built-up in this small trading range.
Thirty-year fixed mortgage rates hit 4% yesterday. A lot of people less than 45 years of age will learn the hard way that higher mortgage rates depress real estate values, and that goes for farm land also.
Summary of this week’s Bullish Consensus Survey by Grainstats (left) and Wright on the Market (right):
Market Data
This morning:
Crude oil is at $92.44, down 1.22
The dollar index is at 95.88, up 0.18
March palm oil is at 5961 MYR, up 131. The contract high was made February, 15th at 5,965 MYR. Palm oil owns 32% and soybean oil owns 28% world market share.
March cotton is at $122.45, up 0.54. 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 $4.669, down 0.048. The contract high was $6.132 at October, 6th, 2021. Natural gas is the primary cost to manufacture nitrogen fertilizer.
March ULSD is at $2.8323 per gallon, down 0.0252. The contract high was made February, 14th at $2.9666.
Broilers and Ethanol
Last week:
Broiler egg set was up 1% than the same week a year ago.
Broiler egg hatch was down slightly than the same week a year ago.
Average daily ethanol production:
1,009,000 barrels last week.
994,000 barrels the previous week.
911,000 barrels the same week a year ago.
1,040,000 barrels the same week two years ago.
Ethanol inventory was 25.483 million barrels compared to 24.799 million barrels the previous week.
Rain Days Update
Rondonópolis, Mato Grosso, in the heart of Brazil's most productive soybean area, received 0.1 inches of rain yesterday; 1.2 inches a year ago and 0.6 inches two years ago (one inch = 24.5 mm). Yesterday's high temperature was 89°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 104°F with 0 inches rain. Cordoba high temperature 92°F with 0.7 inches rain. Salto high temperature 105°F with 0 inches rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 1.04 inches, 85 to 96°F. Cordoba 0.59 inches, 79 to 89°F. Salto 1.07 inches, 82 to 88°F.
The Western Corn Belt has 3 less rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 3 less rain days than yesterday.
Explanation of Rain Days