Ahead of the Open | February 24, 2022
GRAIN CALLS
Corn: 27 to 35 cents (limit up) higher.
Soybeans: 28 to 50 cents higher.
Wheat: Winter wheat 50 cent higher (limit up); spring wheat 50 to 60 cents higher (limit up).
GENERAL COMMENTS: Grain and soybean futures soared overnight, with most corn and wheat contracts locking limit up, after Russia launched an invasion of Ukraine, exacerbating fears of disruptions to grain trade and the global economy. Malaysian palm oil futures rose as much as 8% to a record high, while Nymex crude oil futures surged more than $7 to top $100 a barrel. U.S. stock index futures project a sharply lower open this morning and the U.S. dollar index jumped to near a four-week high.
Russian forces invaded Ukraine in what Russian President Vladimir Putin declared as a “special military operation.” Ukrainian President Volodymyr Zelenskiy said his country has severed diplomatic relations with Russia, tweeting “Russia treacherously attacked our state in the morning, as Nazi Germany did in the WW2 years. As of today, our countries are on different sides of world history. Russia has embarked on a path of evil, but Ukraine is defending itself & won’t give up its freedom no matter what Moscow thinks.” The U.S. and its allies will impose “severe sanctions” on Russia for its military actions against Ukraine, President Joe Biden said, without giving specifics.
U.S. farmers will increase soybean planting this spring while reducing corn acreage, USDA said today at its annual Outlook Forum. Soybean acreage will rise to 88.0 million from 87.2 million last year, while corn plantings will decline to 92.0 million acres from 93.4 million in 2021. Soybean plantings should expand as U.S. farmers respond to a drought that has curbed South American production and lifted soy prices, USDA said. High prices for crop inputs may favor production of the oilseed over corn, which requires more fertilizer
China’s soymeal prices rallied to a record high today amid worries over tight supplies in the market even as the government plans to release soybeans from state-owned reserves. Dalian soymeal futures rose 5% to hit 4,064 yuan ($643) per MT. Crushers did not build up much inventory before the Lunar New Year holiday because of poor margins and came back from the holiday short-bought on supplies, an analyst with the agriculture division of Mysteel in China told Reuters. Chinese soybean inventories last Friday were 3.017 MMT, down 14.4% from the previous week, and down 33.3% from last year.
Due to Monday’s government holiday, USDA’s export sales data for the week ended Feb. 17 will be released Friday morning.
Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), cancelled an international purchase tender for wheat.
CORN: May corn futures overnight rallied to a contract high at $7.16 1/4, while March futures reached $7.18 3/4, the first time a nearby contract traded above $7.00 since July of last year.
SOYBEANS: May soybeans reached $17.59 1/4, a contract high for the third straight day, while March futures hit $17.65, the highest for a nearby contract since September 2012.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-weaker
CATTLE: Live cattle futures may face followthrough pressure from yesterday’s weak close and technical topping signs. Russia’s invasion of Ukraine will be closely followed amid concerns over disruptions to global ag trade. Soaring corn prices pressure feeder cattle. Cash cattle have traded around $2 higher than last week, though volume has been light ahead of Friday’s USDA Cattle on Feed Report. With relatively tight market-ready cattle supplies, feedlots remain optimistic about even stronger cash prices, though packers may be reluctant to raise bids from current levels. Choice beef cutout values fell 76 cents yesterday to $260.88, the lowest daily average since mid-December, though movement was strong at 196 loads. Live steers averaged $143.66 through yesterday morning, up from last week's average of $142.36.
