We do not see any reasonable possibility that corn, wheat and bean prices will not continue their up-trending prices until the Eastern European struggle is resolved. I do expect wicked price corrections, but look for good buying on all the price breaks, just like last week.
Ukraine and Russian negotiators met yesterday in Gomel, Belarus. They were in session perhaps four plus hours, but no statement was issued by either side other than they planned meet again in a few days.
More and more people who have followed Putin’s career are opening expressing concern that his head is not working like it used to. Everything about this Ukraine incursion is unlike Russia’s well executed incursions into Georgia in August 2008 and Donbass, Ukraine and Crimea in 2014. There are more and more senior officials thinking Putin, if successful in Ukraine, will just keep moving west, deeper into Europe. Putin’s warning last Thursday that his nuclear weapons team was put on full alert caught even his closest allies off-guard.
Moscow’s stock exchange remained closed all day Monday. Switzerland said it will freeze Russian assets, setting aside Switzerland’s centuries’ tradition of neutrality.
No doubt, time is on the side of the Ukrainians, but Putin has the military men and hardware on the borders to put Ukraine away if he decides to do so. So what is he waiting on? Some think it is a lack of supplies, especially fuel. That makes no sense given Russia provides western Europe with natural gas and crude oil.
Back in the 50’s and 60’s, the USDA was heavily criticized for paying some farmers to not plant corn and wheat while subsidizing other farmers’ investment in surface, sub-surface drainage and lime application to increase yields (systematic drainage and fertilizer were new technologies in those days). Now the US Government is giving at least $350 million worth of military hardware to Ukraine to fight Russia while buying about $700 million of Russian exports, mostly crude oil, every day. A lot of people are getting kick-back money from both ends.
USDA announced yesterday morning the sales of:
136,000 mts of new crop soybeans to China
120,000 mts of old crop soybeans to unknown
CBOT daily trading limits today are back to normal:
Chicago and KC wheat: 50 cents
Mpls spring wheat 60 cents
Corn 35 cents
Soybeans at 90 cents.
Yesterday, basis levels at the Gulf were firmer for corn. Mar up 4 cents, Apr up 2 cents, May up 2 cents and June up 1 cent. Soybean basis was up 8 cents for March, whereas April and May basis were up 1 cent, and June up 3 cents.
Ukraine is said to have nearly 7 million mt of wheat and 14 million mt of corn booked for export that is not going to get loaded any time soon. Half of the corn is booked for China where corn prices are an all-time high. Egypt wanted to buy wheat this week, but cancelled this week's wheat tender because they did not want to pay the extra freight to source wheat from some location other than the Black Sea.
The first urea trades this week were:
Egypt futures up $60 from Friday
Egypt physical urea up $30
NOLA urea physical up $50
A major coop in Illinois pulled all fertilizer prices yesterday.
ABARES (Australia USDA equivalent) increased their country's recently harvested wheat crop to 36.3 million mt. USDA is at 34 million mt
The February preliminary crop insurance base prices are:
Export Inspections Update
Weekly inspections for export were released yesterday late morning. Below are the numbers and the pace tracker.
Market Data
This morning: Crude oil is at $98.31, up 2.58 cents. The dollar index is at 96.97, down 0.04 July palm oil is at 5,891 MYR, up 217. The contract high was made February, 24th at 5,938 MYR. Palm oil owns 32% and soybean oil owns 28% world market share. December cotton is at $100.90, up 54 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 $4.550, up 0.039. The contract high was $5.121 at February, 2nd. Natural gas is the primary cost to manufacture nitrogen fertilizer. July ULSD is at $2.7888 per gallon, up 0.0595. The contract high was made February, 24th at $2.8475. ULSD stands for Ultra Low Sulfur Diesel.
Rain Days Update
Yesterday, in the dry areas of South America: Santa Maria high temperature 77°F with 0.6 inches rain. Cordoba high temperature 88°F with 0.1 inches rain. Salto high temperature 84°F with 0 inches rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 1.67 inches, 83 to 95°F. Cordoba 2.09 inches, 75 to 89°F. Salto 2.49 inches, 77 to 89°F. The Western Corn Belt has 1 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 2 more rain days than yesterday.
Explanation of Rain Days