Evening Report: March 18, 2022
Check our advice monitor on ProFarmer.com for updates to our marketing plan.
Your Pro Farmer newsletter is now available... The war between Russia and Ukraine moved into its fourth week. Commodity prices continue to swing with each new headline on the situation, though market volatility has decreased a little. While grain traders continue to closely monitor the Russia/Ukraine situation, spring planting is just around the corner. Our acreage survey surprisingly showed combined corn and soybean acres will be down from last year, despite high prices. Meanwhile, the spring weather outlook continues to offer no hope for HRW drought relief, though planting of spring-planted crops should be rapid in the western Corn Belt and South. On the economic front, the Fed raised interest rates for the first time since 2018 in an attempt to slow inflation, which is at a four-decade high. We take a look at the outlook for interest rates and inflation, and what it could mean to the U.S. economy and agriculture in our page 4 feature. We cover all these items and much more in this week's newsletter, which you can access here.
Pro Farmer/Doane planting survey: Combined corn/bean acres to drop... Results of the Pro Farmer/Doane planting intentions survey not surprisingly signaled corn acres will decline and soybean acres will increase this year. But our survey surprisingly showed combined corn and soybean acres would decline 900,000 acres from last year to 179.7 million acres, with soybean acres not expected to rise as much as we previously projected. We forecast total acres planted to the big four crops (corn, soybeans, wheat and cotton) will increase 1.7 million acres from last year to 240.2 million acres. We expect corn acres to be down 1.5 million acres from 2021 to 91.9 million acres. Soybean acres are predicted to increase 600,000 acres from last year to 87.8 million acres. We anticipate wheat to be planted on 48.5 million acres, up 1.8 million acres from last year. Up 800,000 acres from last year, cotton farmers are expected to plant 12.0 million acres. We foresee 7.0 million acres of sorghum to be planted, down 300,000 acres from 2021.
Russia/Ukraine update... Russian President Vladimir Putin praised his country’s troops at a massive flag-waving rally in Moscow as Russian forces strike Ukrainian cities from a distance again, pounding the capital of Kyiv and the country’s west. Ukraine said its troops had prevented their Russian adversaries from making any fresh advances on Friday and the Russians had problems with food, fuel and communications.
Both sides accused each other of dragging out ceasefire talks. In talks with Ukrainian officials, the head of the Russian delegation said the parties had come closer to an agreement on a neutral status for Ukraine. Vladimir Medinsky said the sides also had narrowed their differences on the issue of Ukraine dropping its bid to join NATO.
President Joe Biden and China’s Xi Jinping spoke for nearly two hours via video. Biden warned China from providing military or economic aid for Russia’s invasion. Chinese President Xi Jinping said the war must end as soon as possible and called on NATO nations to hold a dialogue with Moscow. However, Xi did not assign blame to Russia for the invasion.
U.S. barge rates surge... U.S. barge freight rates have skyrocketed as both immediate (spot) demand and April freight demand have surged, according to USDA data. Over the past three weeks, dry bulk barge rates on the Mississippi River at St. Louis jumped from $18.80 to $34.75 per ton. The Upper Ohio River freight rate jumped from $23.60 to $49.70 per ton. Several factors are pushing up rates. One is the increased demand with higher corn and soybean exports shipped down the Mississippi River. There is also increased demand for barges to haul coal to replace Russian natural gas and crude oil. Higher water levels on the river have reduced the amount of barge capacity on the Mississippi River by 15%. USDA said barge operators would also likely pass along higher fuel costs.
Texas battles wildfires... Multiple wildfires have started in Texas due to high winds and low humidity. Texas A&M Forest Service reported wildfires had burned 62.5 square miles. The largest fire is the Eastland complex, about 120 miles west of Dallas. It contains 39,883 acres between four fires. There are another 23,044 acres burned among five other fires throughout the state. Earlier this week, the Texas A&M Forest Service warned that conditions were favorable for wildfires. The National Drought Monitor noted fire risk remains a concern for central Texas and western Oklahoma.
La Niña might affect Argentina’s 2022-23 crop... The Rosario grains exchange is warning that La Niña might continue for the third straight year reducing yields for 2022-23. In a report, the exchange said there is a reasonable chance that La Niña will continue into the Southern Hemisphere winter. It would be the first time in twenty years the weather phenomenon has been present for three consecutive years. Argentine farmers will start planting their 2022-23 wheat crop in May.
Nebraska ag land values up 16%... Nebraska agricultural land values increased by an average of 16% over the prior year, to a statewide average of $3,360 per acre, according to the preliminary findings of the University of Nebraska–Lincoln’s 2022 Farm Real Estate Market Survey. This marks the largest increase in the market value of agricultural land in the state since 2014 and is the highest non-inflation-adjusted statewide land value in the survey’s history. Statewide, the preliminary report found that estimated values of center pivot-irrigated cropland rose by about 17%. Dryland cropland values rose between 15% and 19%. Grazing land and hayland market values ranged from 10% to 13% higher than the prior year. Cash rental rates for dryland and irrigated cropland also increased 10% to 15% than last year. The statewide average cash rents for grazing land and cow-calf pair rates increased about 6% to 8% over the prior year.
NASS to livestream agricultural data briefings... Starting on March 30, USDA’s National Agricultural Statistics Service (NASS) will livestream the Secretary of Agriculture’s data report briefing for the first time. This and future Secretary data briefings will stream on NASS’s YouTube channel five minutes after NASS reports are released to the public. This Hogs and Pigs briefing will be live at 3:05 p.m. ET. The next livestream is the Prospective Plantings and Grain Stocks briefing at 12:05 p.m. ET on March 31. In April, NASS will livestream the Crop Production briefing. Crop Production briefings will also include data presentations from the World Agricultural Supply and Demand Estimates report released by the Office of the Chief Economist’s World Agricultural Outlook Board (WAOB). NASS recently recorded several Secretary briefings to give data users an idea of what to expect from livestreams, and they are available on YouTube. Questions from viewers will not be taken during these official briefings. Viewers with questions are encouraged to contact NASS and WAOB staff directly.
JBS enters ag input market with organic fertilizer production... The world’s largest meat company, JBS, announced it would start with a $26.74 million investment to produce 150,000 metric tons of organic fertilizer from waste from its facilities in Sao Paulo, Brazil.
World Food Programme: Ukraine’s food supply chain “falling apart”... Destroyed bridges and trains are causing a collapse of Ukraine’s food supply chains, according to a World Food Programme (WFP) official.
The official explained that food movement has slowed down as some truck drivers refuse to drive into specific areas to deliver food. The program has already provided 12,000 metric tons of food sourced from within the country. WFP plans to deliver 8,000 metric tons from neighboring countries. The agency’s food costs have increased by $71 million per month this year. The official is also concerned about other hunger hot spots worldwide, including Yemen and Lebanon. They are switching to different suppliers, but costs are likely to increase.
