Ahead of the Open | March 18, 2022

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Corn: 3 to 5 cents lower.

Soybeans: 4 to 8 cents higher in old-crop contracts.

Wheat: 12 to 22 cents lower.

GENERAL COMMENTS: Wheat futures fell overnight, with HRW and SRW contracts on track for a second weekly decline, as the market watched developments surrounding the Russia/Ukraine war. Corn also fell in narrow-range trade while soybeans rose. Malaysian palm oil posted a 16% weekly decline, its largest since 1986, after Indonesia abandoned export volume curbs. Nymex crude oil is slightly higher. U.S. stock index futures signal a weaker open, while the U.S. dollar index is up more than 500 points this morning.

German Chancellor Olaf Scholz called for a ceasefire in Ukraine and intensified diplomatic efforts during a call with Russian President Vladimir Putin today. Putin told Scholz Ukraine was trying to stall the negotiations with “unrealistic proposals.” “Russian forces have made minimal progress this week,” Britain said as Ukrainian forces around Kyiv and Mykolaiv continue to push back Russian attempts to encircle the two cities. Heavy shelling in Kharkiv, Chernihiv, Sumy and Mariupol continued.

Ukraine warned the World Trade Organization (WTO) it may have to limit exports of agricultural products to ensure domestic food supplies, Geneva trade officials reported from the meeting this week of the WTO Committee on Agriculture. Ukrainian farmers are making their best effort not to miss the growing season, despite dangers they are facing. Countries also used the session to levy hefty criticism of the Russian action, with Russia pushing back, arguing its action is outside the scope of the WTO and countries should use diplomacy and other international organizations to address their concerns.

Indonesia significantly raised its maximum palm oil export levy, marking a new bid to control domestic cooking oil prices after previous measures failed. The world’s biggest exporter of the edible oil a day earlier announced a surprise policy U-turn to remove export volume restrictions on palm oil products and raise its export levy instead. The new regulation, which took effect immediately, introduced higher progressive rates when the reference price for the edible oil hit at least $1,050 per MT to a maximum levy of $375 per MT. Under previous rules, the maximum export levy was $175 per MT, which kicked in when the reference price hit at least $1,000 per MT.

The risk of major flooding in the Red River Valley and continued snow cover across Minnesota and North Dakota threaten to delay planting across the region for weeks, U.S. government forecasters said yesterday. Heavy snow and saturated soils mean the Red River will likely see the worst flooding this spring, the meteorologists said in a seasonal forecast Thursday. “In short, expect planting delays,” said Brad Rippey, a meteorologist with USDA. “There will be a few weeks of planting delays as we get into April.”

Russia’s wheat export tax for March 23-29 will be $86.40 per metric ton, based on an indicative price of $323.50 per metric ton, up 10 cents from the previous week. That halted a nine-week drop in the export tax. The wheat export tax is down from the peak rate of $98.20 per MT in mid-January but 207% higher than the initial rate of $28.10 per MT from last June when Russia started using the sliding scale.

Some 92% of French soft wheat crops were in good or excellent condition by March 14, unchanged from a week earlier and above a year-ago rating of 87%, farm office FranceAgriMer said today.


CORN: May corn traded in a tight, 6 1/4-cent range overnight, with some spillover pressure from weakness in wheat. The lead contract is down from $7.62 1/2 at the end of last week. Resistance is seen at this week’s high of $7.67 1/2 and support at this week’s low of $7.26 3/4.

SOYBEANS: May soybeans extended yesterday’s gains overnight but remains within the week’s range, from a March 14 high of $16.97 3/4 and a March 15 low of $16.38. The lead contract ended last week at $16.76 and rose 19 1/4 cents yesterday.

WHEAT: May SRW wheat fell as low as $10.73 overnight and is poised to end lower from last week’s close at $11.06 1/2. Wheat markets appear to have established major tops, but grain trade disruptions from the Russia/Ukraine war probably will keep prices elevated and generate volatility.



CATTLE: Steady-firmer

HOGS: Steady-weaker

CATTLE: Live cattle futures may extend yesterday’s gains behind strengthening cash prices and are on track for a second straight weekly gain. USDA-reported live steers averaged $139.96 through yesterday morning, up $1.66 from last week's average. Other sources reported moderate cash trade at $138 in the Southern Plains yesterday, and signaled most feedlots in the northern market continued to pass on steady prices in hopes packers would raise bids. Choice beef cutout values fell $1.03 yesterday to $257.05 but movement was strong at 148 loads.

June live cattle rose 40 cents yesterday to $135.925, up from $132.95 at the end of last week. May feeder cattle fell $1.40 to $165.875.

HOGS: Lean hog futures may start lower on followthrough weakness from yesterday’s weak close. April lean hogs tumbled $2.025 yesterday to $100.35, the lowest close in a week. Lead-month futures are now trading under the CME lean hog index, which is up 36 cents to $100.77. Futures’ discount to the cash benchmark, along with strength in wholesale pork, may limit selling interest. Pork cutout values rose 18 cents yesterday to $105.20, the highest since March 9. Movement totaled 293 loads. April lean hogs are down from $102.725 at the end of last week.


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