Ahead of the Open | March 17, 2022
GRAIN CALLS
Corn: 8 to 10 cents higher.
Soybeans: 8 to 12 cents higher.
Wheat: 7 to 17 cents lower in nearby contracts.
USDA reported a daily corn sale of 136,000 MT for delivery to “unknown destinations” during the 2021-22 marketing year.
Talks between Russian and Ukraine continue via video link, with the Kremlin saying it was putting “colossal energy” into the negotiations. Ukrainian President Volodymyr Zelenskyy urged Germany to take the lead in efforts to end the war in a video address to lawmakers in Berlin. Despite Ukraine’s pleas, Preside Joe Biden and NATO leaders have refused to set up a no-fly zone, which would draw the military alliance directly into a conflict with Russia.
The parched U.S. HRW belt is expected to receive “extremely important” rain over the next week, according to World Weather Inc. Rain and snow across the region today and a follow up storm early next week “promise to provide a better environment for improving crop conditions,” the forecaster said today. “Frequent bouts of rain and mild weather must continue in the region over the next few weeks if crops are going to recover and restore some of the lost production potential and that makes weather in the balance of March and April of critical importance.”
Strategie Grains cut its forecast for 2021-22 wheat exports out of Ukraine by almost 6 MMT and from Russia by 5 MMT due to the war. To partially offset those losses, the consultancy raised its estimate for wheat shipments from the 27-member European Union this season by 2 MMT to 32.5 MMT. Strategie Grains lowered its outlook for this year’s EU wheat crop by 1.1 MMT from last month to 126.9 MMT, which would be down 2.5 MMT from last year.
Ukraine winter grain crop are in “good” condition throughout the country, Deputy Agriculture Minister Taras Dzoba said in a statement. “And, despite the difficulties in which field work has to be carried out, Ukraine will have bread,” he said, adding that export potential is “significantly undermined” by war.
Argentina is weighing raising taxes on soybean oil and meal exports as part of a plan to tamp down sky-high inflation, a government source told Reuters. A hike to soy product export taxes was widely speculated immediately after the country shut off export registrations for soymeal and soyoil on Sunday. A two-point hike to those export taxes would move them to 33% and on par with the soybean export levy, though some believe the soybean rate will also be raised by two points.
Argentina’s government warned beef processors to do their part to help bring down domestic inflation or risk export bans on beef.
USDA’s Animal and Plant Health Inspection Service (APHIS) confirmed highly pathogenic avian influenza (HPAI) in a non-commercial backyard flock (non-poultry) in Merrick County, Nebraska, and in a backyard mixed species (non-poultry) flock. This bring total confirmed HPAI cases to 37 with 16 of those being in non-commercial backyard flocks.
South Korea purchased 65,000 MT of optional origin corn and tendered to buy 45,000 MT of U.S. milling wheat. Jordan tendered to buy 120,000 MT of optional origin milling wheat.
CORN: USDA reported net weekly U.S. corn sales of 1.836 MMT for 2021-22, down 14% from the previous week but up 64% from the average for the previous four weeks. Top buyers included Japan (538,400 MT, including 94,500 MT switched from unknown destinations), “unknown destinations” (303,000 MT) and Mexico (235,100 MT, including decreases of 35,400 MT). For 2022-23, net sales totaled 204,000 MT.
Traders expected net U.S. corn sales of 700,000 to 1.4 million MT for 2021-22 and zero to 200,000 MT for 2022-23.
SOYBEANS: Net weekly U.S. soybean sales totaled 1.253 MMT for 2021-22, down 43% from the previous week and down 11 percent from the prior four-week average. Top buyers included China, at 395,500 MT, including 66,000 MT switched from “unknown destinations” and decreases of 66,700 MT. For 2022-23, net sales totaled 477,000 MT, with lead buyers including China (406,000 MT) and unknown destinations (71,000 MT).
Expectations for 2021-22 ranged from 900,000 MT to 1.8 MMT and expectations for 2022-23 ranged from 500,000 MT to 1.2 MMT.
WHEAT: Net U.S. weekly wheat sales totaled 145,900 MT for 2021-22, down 53% from the previous week. For 2022-23, net sales totaled 325,600 MT. Traders expected net sales of 250,000 to 600,000 MT for 2021-22 and sales of zero to 100,000 MT for 2022-23. May SRW wheat fell as low as $10.31 3/4 overnight, the lowest intraday price since March 2, after dropping the 85-cent daily limit yesterday. Daily trading limits expand to $1.30 for SRW and HRW wheat contracts today.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-weak
CATTLE: Live cattle faded in late trading yesterday but any further downside today may be limited by expectations for stronger cash trade. Cash trade so far this week has been light and at prices roughly steady with last week’s live steer average of $138.30, but with insufficient volume to establish a true test. Continued strength in wholesale beef should underpin futures. Choice beef cutout values rose 18 cents to $258.08, the highest daily average in nearly three weeks. Movement totaled 123 loads. Corn futures are expected to climb today, which may burden the feeder market.
USDA reported net weekly U.S. beef sales of 19,700 MT for 2022, down 28% from the previous week and down 11% from the prior four-week average. China was the lead buyer, at 6,600 MT, followed by Japan, at 5,200 MT.
June live cattle fell $1.275 yesterday to $135.525, after earlier rising to a two-week high at $137.60.
Net weekly U.S. pork sales of 38,300 MT for 2022 were up 51% from the previous week and up 36% from the prior four-week average, with Mexico the lead buyer at 21,700 MT.
April lean hogs fell 2.5 cents yesterday to $102.375.
