Weekly Crop Commentary - 2/18/2022
Feb 18, 2022
Director of Grain Purchasing
Hello once again. This sure was another week of some wild weather, we sure have a lot of ponds to look at for a while now. The nice weather at the beginning of the week did allow the farmers to once again move grain. We had some big receipts through the first 3 days of the week, but rain and a farm show in Kentucky seemed to draw the interest to finish the week. The export market continues to chug along as we continue to see sales from the USDA almost daily. Premiums this week have really risen in Brazil, and not just because of the drought. They have a currency that has really come under fire and the farmers there are holding onto bean inventories as the price they receive is dropping. This coupled with some better movement in the barge market has made our products competitively priced once again in the international market. We are still seeing a lot of uncertainty surrounding Ukraine. One has to feel that this is also adding a bit of premium allowing wheat to rally back to the top end of the trading range. It will be interesting to see how the markets close to the end of the week. We have March options expiring today and no markets on Monday due to President's day. On the crop insurance price discovery we stood at $5.84 ¾ on December corn futures and 14.22 ½ on November soybean futures on the close last night. Thanks and have a great weekend.
Lou Baughman
Grain Origination, Kenton (Region 1)
New crop beans reached last week's highs today, it will be interesting to see if they hold at the close. Monday is a holiday so markets will be closed. Traders will be apprehensive with today’s market because of the long weekend and seeing what the headlines will bring each day on the Russia vs. Ukraine saga and South American weather.
Parts of the US are having their own problems with drought, 32% of the corn planting area, 72% of the wheat area, and 46% spring wheat area still are stricken with drought at this time.
High volatility in the markets remain, call your local elevator to put targets in place.
Lisa Warne
Grain Origination, Mechanicsburg (Region 3)
Welcome to the last half of February already. It’s been a volatile week in all markets with on-again, off-again tensions of a Russian invasion of Ukraine. Grains are in the green to end the week and we are higher than we were a week ago, even if only a nickel on corn. Soybeans are up 15+ cents on the week. There are no markets on Monday due to Presidents’ Day. They will resume with the overnight trade at 8 pm Monday evening.
Export sales for this time of year are remaining strong. US Gulf soybean bids continue to be cheaper than Brazil for April forward, an unusual occurrence as they will be finishing harvest in South America then. Yesterday’s export sales report showed 50 million bushels of old crop soybeans sold last week, compared to the five-year average for the same week of 20.5 million.
We’ve seen a good bit of grain movement to our elevators with the warmer temps and clearer roads, but the rain halted that yesterday. There’s more rain in the forecast for the first of next week, with some measurable snow possible at the end of the week.
Many of you in regions 3 and 4 (Logan, Champaign, Clark, Madison, Union, Delaware counties) should have recently received a postcard invitation to a Grain Market Outlook Meeting on March 1st in Plain City. Please RSVP to your local elevator or email me at lwarne@heritagecooperative.com by Wednesday, February 23rd. Have a great weekend!
Haylee VanScoyGrain Merchandiser, Upper Sandusky (Region 2)
It sure was nice to get a glimpse of 50-degree weather this week! These weather swings are about as volatile as the grain markets lately. It was close to single digits this morning when I left for work. Hope you all are staying warm today! First off, I want to thank all of my customers that came out and joined us for our 2022 Grain Market Outlook Meeting on Wednesday, February 16th. It was a great evening filled with fellowship and learning! Bailey Elchinger of StoneX Financial was our keynote speaker and gave us some very insightful input on these wild grain markets. If you are interested in discussing your current grain marketing plan or would like to look at alternative contracting options, don’t hesitate to reach out!
A lot of factors affecting the markets this week as we continue to see new highs being made. One of the top headlines is Russia and Ukraine. According to Arlan Suderman of StoneX, we are still within the “window of opportunity” for something to happen as Russia still has 150k troops sitting around 70% of Ukraine’s border. The world continues to wait and see what Putin’s next move will be. Hold onto your hats next week, could be a wild ride in either direction depending on whether tensions ease and troops retreat or if we see more shots fired. Aside from that, we’ve also continued to see dry weather in Argentina, confirmation of low bean yields in Brazil, and increased US export demand all of which continue to keep beans elevated. If you need to increase your new crop sales, I would recommend putting in offers for both beans and corn as the next month or two will have a lot happening with March planting intentions around the corner. In addition, if you still have old crop on dp or in the bin, I would recommend adding to your sales and ensuring you have enough sold to cover your input expenses at these profitable levels.
A reminder that markets are closed on Monday for President’s Day, but Heritage will still be open for receiving grain. Hope you all have a wonderful weekend!