Weekly Crop Commentary - 3/25/2022
Mar 25, 2022
Ed Nienaber
Vice President, Grain Division
The USDA will be releasing its spring planting intentions report along with grain stocks usage numbers on Thursday, March 31. Private forecasters have been releasing their ideas on prospective plantings in the past few days. It appears that the market is looking for 91.0-92.0 corn and 88.0-89.0 million bean acres to be planted this spring. This compares to last year's planted acres of 93.4 corn and 87.2 beans that were planted in the US. Geopolitical news continues to be the focus of most if not all commodity markets since late last month. The major concern will be just how much grain gets planted in Eastern Europe this spring and how will the world deal with potential supply issues. The local basis continues to struggle as end-users seem to have plenty of bushels on hand to meet nearby needs. Futures markets continue to be greatly inverted and this will make price discovery interesting as we move into the summer months. We will be rolling out free delayed price at the end of the month on bushels delivered on or after Friday, April 1, 2022. Please check with your local Heritage Cooperative grain branch for details.
Wes Bahan
Director of Grain Purchasing
good afternoon and TGIF once again. This was a bit of a calmer week than we have become accustomed to. However, we did see the USDA announced 690,000 MT of old crop bean sales. We have not found the price rationing level of soybeans yet. We have committed 95% of our yearly estimate with 24 weeks remaining in the marketing year. We only need to sell 2.85 MMT of beans for the remainder of the year, I would expect their estimates to rise at some point. On the corn side, we have sold 83.5 % of our yearly estimate already. This leaves 10.5 MMT of corn to sell in 24 weeks, and we have averaged over 1 MMT of weekly sales since the beginning of the marketing year. The local corn market however is doing everything it can to make folks hold onto corn. Basis is still retreating, and most processors are having reduced receiving hours. The USDA next Thursday will give us the first look at planting intentions which are estimated to be 91-92 million corn acres, and 88-89 million soybean acres. The war in Ukraine is putting more importance on this as most estimate they will only be plating half the normal area this spring. There is a lot of displaced grain demand that is going to disrupt markets for quite some time.
Steve Bricher
Grain Operation Manager, Urbana (Region 3)
It has been a little quieter week for the grain markets. Yes, we are seeing some moves day to day, but at these price levels, that is to be expected.
We are less than 30 days from seeing corn or beans in the ground here in Champaign County. I have seen in some of my social media feeds, of some planting going on in the Southern Midwest. We will have to see what mother nature brings over the next 8 weeks to allow us to get this crop into the ground.
Corn and soybeans have held their values over the last couple of weeks. The war in Ukraine is still front and center, and I doubt has taken the path that Mr. Putin thought it would. We are going to have to deal with the supply issues caused by this action for a while, and we will need the rest of the world to have good crops to make sure we don’t have major issues for corn, soybeans, and wheat for the rest of the world.
We are still seeing new crop corn and soybean prices at nice levels to either start selling or to add to what we have already sold. The common thing I hear in talking to customers is that they would like to get something in the ground before they sell more, I can understand that thinking.
If you still have grain on the farm remember to check your bins as the temperatures warm-up, you don’t ever want to have an issue, especially at these price levels.
Ralph Wince
Grain Merchandiser, Canfield (Region 5)
Good Afternoon, the grain markets continue to move at a very erratic pace from day to day. But we also continue to stay in a range from a week to week here as of late. Next week on Thursday we will get the first set of numbers for our 2022 planting season on how many acres the farmer will plant for corn and beans. Once we get those numbers those will be what we plug into the 2022 balance sheet. That will be some good fundamental news that the market needs right now. But a very big piece of unknown fundamental news that will be missing, for now, will be the acres that the Ukraine farmer gets planted this spring. Almost every day I read about what someone believes will be planted in Ukraine this year. But the fact of the matter is that we just don’t know yet. And the bigger question becomes if they get some acres planted what will the yields be like? Many believe that the fertilizer and chemicals just won’t be there for them to plant the crop. There also appears to be a huge issue with the ports on the Black Sea. There has been a lot of damage to them and whose hands they will continue to be in going forward. As far as grain locally we continue to see the pipeline running at capacity and end-users not willing to buy anymore for now. That has forced basis levels to get weaker because the end-user just does not need any more corn nearby. At some point, you would think that would change. Have a great weekend!!!!!
Haylee VanScoy
Grain Merchandiser, Upper Sandusky (Region 2)
Hope everyone’s March Madness brackets are doing well; I know I’m losing hope in mine after last night’s games. Unloads in Upper have been steady today finishing up March contracts. There’s been a mix of bearish and bullish news this week. US export sales were little to be desired yesterday, but we are still seeing some old crop bean demand from China. SA has received rains this week limiting any major concerns at the moment. This may have slowed bean harvest progress in a few areas but was welcomed by the safrinha corn crop. Related to the Russia-Ukraine front, the US has agreed to help the EU by exporting Liquified Natural Gas (LNG) to help reduce the EU’s reliance on Russian energy and it was announced that the Ukrainian Agricultural Minister resigned this week due to health problems. Prior to his resignation, the ag ministry had stated that Ukraine’s spring crop planting could be lowered by more than 50% from last year (7 mil hectares in 2022 vs 15 mil in 2021). Of the 6.5 mil hectares of winter wheat, it is likely that only 4 mil are in harvestable regions due to the ongoing war. With a lot of information to digest and still a lot of unknowns, the market appears to be content where they are until next week’s heavily anticipated USDA Planting Intentions and Quarterly Stocks report next Thursday on 3/31. Average estimates so far have been anywhere from 90.4 - 92.4 mil acres of corn (vs. 93.4 ly) and 87.8 - 92.2 mil acres of beans (vs. 87.2 ly). If this is the case, we could potentially see some risk premium taken off these elevated bean prices, however, corn may have a little strength left to ensure those acres get planted in the coming month. Nonetheless, it’s important to have a plan and be proactive. Whether it’s dp bushels or bin bushels, old crop cash corn and beans are still $7+ and $16.50+ and would suggest locking more in as the downside risk appears to be greater than the upside. If Russia and Ukraine were to have a ceasefire, we’d likely see nearby corn and beans drop off quicker than new crop. Speaking of new crop, I encourage you to continue chipping away on small increments, put target offers in, or look at opportunities that allow flexibility, such as a flex floor. If you have any questions, don’t hesitate to reach out. Hope you all have a great weekend!
Vice President, Grain Division
The USDA will be releasing its spring planting intentions report along with grain stocks usage numbers on Thursday, March 31. Private forecasters have been releasing their ideas on prospective plantings in the past few days. It appears that the market is looking for 91.0-92.0 corn and 88.0-89.0 million bean acres to be planted this spring. This compares to last year's planted acres of 93.4 corn and 87.2 beans that were planted in the US. Geopolitical news continues to be the focus of most if not all commodity markets since late last month. The major concern will be just how much grain gets planted in Eastern Europe this spring and how will the world deal with potential supply issues. The local basis continues to struggle as end-users seem to have plenty of bushels on hand to meet nearby needs. Futures markets continue to be greatly inverted and this will make price discovery interesting as we move into the summer months. We will be rolling out free delayed price at the end of the month on bushels delivered on or after Friday, April 1, 2022. Please check with your local Heritage Cooperative grain branch for details.
Wes Bahan
Director of Grain Purchasing
good afternoon and TGIF once again. This was a bit of a calmer week than we have become accustomed to. However, we did see the USDA announced 690,000 MT of old crop bean sales. We have not found the price rationing level of soybeans yet. We have committed 95% of our yearly estimate with 24 weeks remaining in the marketing year. We only need to sell 2.85 MMT of beans for the remainder of the year, I would expect their estimates to rise at some point. On the corn side, we have sold 83.5 % of our yearly estimate already. This leaves 10.5 MMT of corn to sell in 24 weeks, and we have averaged over 1 MMT of weekly sales since the beginning of the marketing year. The local corn market however is doing everything it can to make folks hold onto corn. Basis is still retreating, and most processors are having reduced receiving hours. The USDA next Thursday will give us the first look at planting intentions which are estimated to be 91-92 million corn acres, and 88-89 million soybean acres. The war in Ukraine is putting more importance on this as most estimate they will only be plating half the normal area this spring. There is a lot of displaced grain demand that is going to disrupt markets for quite some time.
Steve Bricher
Grain Operation Manager, Urbana (Region 3)
It has been a little quieter week for the grain markets. Yes, we are seeing some moves day to day, but at these price levels, that is to be expected.
We are less than 30 days from seeing corn or beans in the ground here in Champaign County. I have seen in some of my social media feeds, of some planting going on in the Southern Midwest. We will have to see what mother nature brings over the next 8 weeks to allow us to get this crop into the ground.
Corn and soybeans have held their values over the last couple of weeks. The war in Ukraine is still front and center, and I doubt has taken the path that Mr. Putin thought it would. We are going to have to deal with the supply issues caused by this action for a while, and we will need the rest of the world to have good crops to make sure we don’t have major issues for corn, soybeans, and wheat for the rest of the world.
We are still seeing new crop corn and soybean prices at nice levels to either start selling or to add to what we have already sold. The common thing I hear in talking to customers is that they would like to get something in the ground before they sell more, I can understand that thinking.
If you still have grain on the farm remember to check your bins as the temperatures warm-up, you don’t ever want to have an issue, especially at these price levels.
Ralph Wince
Grain Merchandiser, Canfield (Region 5)
Good Afternoon, the grain markets continue to move at a very erratic pace from day to day. But we also continue to stay in a range from a week to week here as of late. Next week on Thursday we will get the first set of numbers for our 2022 planting season on how many acres the farmer will plant for corn and beans. Once we get those numbers those will be what we plug into the 2022 balance sheet. That will be some good fundamental news that the market needs right now. But a very big piece of unknown fundamental news that will be missing, for now, will be the acres that the Ukraine farmer gets planted this spring. Almost every day I read about what someone believes will be planted in Ukraine this year. But the fact of the matter is that we just don’t know yet. And the bigger question becomes if they get some acres planted what will the yields be like? Many believe that the fertilizer and chemicals just won’t be there for them to plant the crop. There also appears to be a huge issue with the ports on the Black Sea. There has been a lot of damage to them and whose hands they will continue to be in going forward. As far as grain locally we continue to see the pipeline running at capacity and end-users not willing to buy anymore for now. That has forced basis levels to get weaker because the end-user just does not need any more corn nearby. At some point, you would think that would change. Have a great weekend!!!!!
Haylee VanScoy
Grain Merchandiser, Upper Sandusky (Region 2)
Hope everyone’s March Madness brackets are doing well; I know I’m losing hope in mine after last night’s games. Unloads in Upper have been steady today finishing up March contracts. There’s been a mix of bearish and bullish news this week. US export sales were little to be desired yesterday, but we are still seeing some old crop bean demand from China. SA has received rains this week limiting any major concerns at the moment. This may have slowed bean harvest progress in a few areas but was welcomed by the safrinha corn crop. Related to the Russia-Ukraine front, the US has agreed to help the EU by exporting Liquified Natural Gas (LNG) to help reduce the EU’s reliance on Russian energy and it was announced that the Ukrainian Agricultural Minister resigned this week due to health problems. Prior to his resignation, the ag ministry had stated that Ukraine’s spring crop planting could be lowered by more than 50% from last year (7 mil hectares in 2022 vs 15 mil in 2021). Of the 6.5 mil hectares of winter wheat, it is likely that only 4 mil are in harvestable regions due to the ongoing war. With a lot of information to digest and still a lot of unknowns, the market appears to be content where they are until next week’s heavily anticipated USDA Planting Intentions and Quarterly Stocks report next Thursday on 3/31. Average estimates so far have been anywhere from 90.4 - 92.4 mil acres of corn (vs. 93.4 ly) and 87.8 - 92.2 mil acres of beans (vs. 87.2 ly). If this is the case, we could potentially see some risk premium taken off these elevated bean prices, however, corn may have a little strength left to ensure those acres get planted in the coming month. Nonetheless, it’s important to have a plan and be proactive. Whether it’s dp bushels or bin bushels, old crop cash corn and beans are still $7+ and $16.50+ and would suggest locking more in as the downside risk appears to be greater than the upside. If Russia and Ukraine were to have a ceasefire, we’d likely see nearby corn and beans drop off quicker than new crop. Speaking of new crop, I encourage you to continue chipping away on small increments, put target offers in, or look at opportunities that allow flexibility, such as a flex floor. If you have any questions, don’t hesitate to reach out. Hope you all have a great weekend!