Ahead of the Open | March 10, 2022

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Corn: 7 to 15 cents higher.

Soybeans: 18 to 30 cents higher.

Wheat: Higher; extreme volatile trade continues.

GENERAL COMMENTS: The wheat market remained extremely volatile overnight. Wheat futures gapped lower after limit-down closes on Wednesday and sharply extended losses. But wheat filled the gaps and finished higher in all but the May SRW contract. Corn and soybeans posted strong gains overnight. Front-month crude oil futures are nearly $6 higher this morning, while the U.S. dollar index is near unchanged.

The war between Russia and Ukraine is starting its third week with no signs of a ceasefire. Ukrainian Foreign Minister Dmytro Kuleba says talks between top diplomats of Moscow and Kyiv produced no breakthrough on ending the war. Kuleba said there are “other decision-makers” in Russia who need to be consulted, adding that he agreed with Russian Foreign Minister Sergey Lavrov to continue to seek a solution to humanitarian issues caused by the war. He said “They [Russians] seek Ukraine’s surrender. This is not going to happen.” Meanwhile, Lavrov said he did not believe the conflict in Ukraine would spiral into a nuclear war but cautioned the U.S. and Europe that Moscow never again wanted to be dependent on the West.

Earlier this week Russia said it would ban some exports of commodities/products to certain countries through the end of the year, without giving details. Russian media reports telecom, medical, agricultural, electrical and technology equipment, among other items, will be affected by the ban which runs until the end of 2022. Russia may also temporarily ban grain exports to some former Soviet countries from March 15 to Aug. 31 and sugar shipments outside the Eurasian economic union.

Conab cut its Brazilian soybean crop estimate by 2.7 MMT from last month to 122.8 MMT. Despite the smaller production forecast, the Brazilian government’s forecasting agency kept its 2021-22 soybean export forecast at 80.2 MMT. Conab left its Brazilian corn crop estimate at 112.3 MMT. It still expects the country to export 35 MMT of corn and import 1.7 MMT during 2021-22. On Wednesday, USDA forecast Brazilian production at 127 MMT for soybeans (down 7 MMT from February) and 114 MMT for corn (unchanged).

The Rosario Grain Exchange cut its Argentine soybean and corn crop estimates due to impacts from drought. The exchange lowered its soybean crop estimate by 500,000 MT to 40 MMT and cut its corn production forecast by 300,000 MT to 47.7 MMT. Yesterday, USDA reduced its Argentine crop estimates by 1.5 MMT for soybeans to 43.5 MMT and 1 MMT for corn to 53 MMT.

Weekly export sales:

Old-crop corn sales for the week ended March 3 topped 2.1 MMT, which was a marketing-year high and far greater than expectations for 500,000 MT to 1.2 MMT. “Unknown destinations” was the lead buyer at 800,600 MT. Sales for 2022-23 of 22,900 MT were lower than expected. Weekly exports at nearly 1.8 MMT increased 14% from the previous week.

Old-crop soybean sales totaled 2.2 MMT, which topped expectations of 900,000 MT to 1.7 MMT. China at nearly 1.1 MMT and “unknown” at 334,000 MT were the lead buyers. Sales of 895,000 MT for 2022-2023 were reported for China (797,000 MT), unknown destinations (66,000 MT) and Mexico (32,000 MT). Exports of 834,900 MT were up 11% from the previous week, but down 26% from the prior 4-week average.

Wheat export sales of 307,200 MT for 2021-22 were in line with expectations. Sales of 63,000 MT were reported for 2022-23. Exports of 384,500 MT were up 5% from the previous week, but down 10% from the prior 4-week average.

U.S. consumer prices rose more than expected in February. The consumer price index (CPI) increased 0.8% from January and 7.9% from year-ago. Excluding food and energy, the CPI rose 0.5% for the month and 6.4% annually.


CORN: Corn futures failed to find seller interest under this week’s lows overnight and rebounded. The market finished overnight trade near session highs and futures will be boosted by strong weekly export sales this morning. But the path corn futures take will be dependent on wheat.  

SOYBEANS: Soybeans ended near session highs overnight and will be supported by huge weekly export sales that featured China as the primary buyer. The soy complex will also get a boost from crude oil, which is sharply higher, though weaker Malaysian palm oil prices overnight could limit buying in soyoil.  

WHEAT: The wheat market is expected to open higher after a volatile session that saw futures gap lower and later fill the gaps. Winter wheat contracts have an expanded $1.30 trading limit today, so there could be extreme volatility.




HOGS: Mixed to mostly lower

CATTLE: Live cattle futures are expected to face followthrough selling after sharp losses and a low-range close on Wednesday. Fundamental pressure will come from a weakening cash market. Cash cattle so far this week traded mostly around $2 lower. While April cattle are trading below the cash market, it’s difficult to drum up buyer interest in futures when cash fundamentals are weakening. Additional pressure is coming from concerns about beef demand given the Russia/Ukraine war and potential negative impacts that will have on the U.S. and global economies. While beef demand concerns persist, retailer buying has picked up as they begin purchases for post-Lent features. Feeder cattle will be pressured if corn extends its overnight prices. Some of the selling pressure could be alleviated by strong weekly beef export sales. For the week ended March 3, USDA reported beef sales of 27,500 MT – a marketing-year high. China (10,400 MT), Japan (6,400 MT) and South Korea (3,700 MT) were the lead buyers.

HOGS: April lean hog futures are expected to face followthrough selling after sharp losses and a low-range close on Wednesday. April hogs finished yesterday $1.89 above today’s cash index quote, which is up 26 cents following four straight days of declines. Deferred lean hog futures are likely to favor the downside, though some buying may develop if outside markets are supportive. The pork cutout value snapped a two-day decline by firming $2.34 on Wednesday, though all of the strength was in hams, which firmed nearly $14, while all other cuts dropped. Pork movement also slowed to just 239.74 loads. Weekly pork exports sales at 25,400 MT declined 40% from the previous week and 4% from the four-week average. Mexico was the primary buyer at 12,800 MT.


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