Marketing

Editor’s Note: Joe Lardy, CHS Hedging research analyst, is sitting in this week for Phyllis Nystrom, the regular “Grain Outlook” columnist.

The following marketing analysis is for the week ending Feb. 11.

CORN — Wow! What a week! March corn futures close the week 30.5 cents higher. Lots of volatility in the market this week with the World Agriculture Supply and Demand Estimates report, Conab estimates, and Russia/Ukraine tensions.

The week started off with a good inspection number. It marked the seventh straight week with inspections over 40 million bushels. We are getting to the point in the year when inspections really start to jump higher. JOE LARDY

Export sales this week were CHS Hedging inC. sadly pretty terrible. At only 23 St. Paul million bushels, it was half of last week’s total. There was one flash sale announcement for corn to Japan for the 2021-22 crop year.

Ethanol production dropped off this week by 47,000 barrels per day to 994,000 bpd. Production continues to remain a bit sluggish, but is still in line with the U.S. Department of Agriculture’s number.

The WASDE was the feature this week; but the USDA did not make any changes to the U.S. corn balance sheet. Brazil corn was trimmed by 1 million tons; but the weather pattern still looks threatening so that will need to be closely watched as the Safrinha corn crop develops. The strength of the soybean market pulled the corn market along.

The Russian/Ukrainian tensions have supported the market all week. The Ukraine is the fourthlargest global corn exporter and the only other major North American exporter along with the United States. The potential of a military conflict along with the real possibility of declining south American production has the U.S. corn market positioned well.

Outlook: There is lot to digest that is front and center. But don’t forget that the USDA outlook conference is only two weeks away and we are going to get the first estimate on acreage. The corn market should stay very volatile until we get some certainty on the big issues, but that certainty is months away.

SOYBEANS — The soybean market had a good performance with March beans up 29.5 cents on the week.

Inspections were ok, but they were the lowest of the past month. We are right about the point in the marketing year where inspections transition away from beans as the corn program ramps up.

Combined export sales were outstanding with the second-highest total of the year. Both old crop and new crop sales were strong. We did see flash sales

corn/change* soybeans/change*

Stewartville $6.00 +.03 $15.09 +.30 Edgerton $6.18 -.02 $14.76 +.22 Jackson $6.28 +.07 $14.86 +.65 Hope $6.09 +.04 $14.78 +.18 Cannon Falls $5.97 -.11 $14.88 -.10 Sleepy Eye $6.20 .00 $14.86 +.23 Average: $6.12 $14.87 Year Ago Average: $5.12 $13.25

Grain prices are effective cash close on Feb. 15. *Cash grain price change represents a two-week period. announcement every day this week for soybeans.

The WASDE report was a strong catalyst for the upward price move. The USDA made only small revision to the U.S. balance sheet. The crush figure was increased by 25 million bushels. It was probably a little surprising to some that the export category was left unchanged given the big cuts to South American production. For South America, Brazil beans were cut by another 5 million metric tons to 134 mmt. Two months ago, the USDA had Brazil at 144 mmt and we’ve seen a 5 mmt cut in both the January and February reports. I’m expecting another big cut for the March report as well. Argentina soy was cut another 1.5 mmt this month as well. And we can’t ignore the production losses in Paraguay. They might be the hardest hit of all. Two months ago, their production was at 10 mmt, reduced to 8.5 in January, and now at 6.3 mmt. That’s a substantial 40 percent production cut in just two months … and there could be more cuts to come.

On Feb. 10, Conab projected the Brazilian soybean crop at 125 mmt. This is a number the market has whispered about; so to see it in print caused the market to rally sharply before profit taking kicked in — causing a massive reversal. The underlying support still remains though and Feb. 11’s trade recovered a bit.

Outlook: The market is fundamentally supportive, but demand will be key. Is the United States going to steal away some old crop business that normally would belong to Brazil? The USDA also cut China’s imports from 100 to 97 million tons. And just like the corn, the bean market is fighting for acres this year. In two short weeks the outlook forum will give us the first look.

It notable to see how the wheat market reacts to the Russian/Ukrainian tensions. The markets — but especially wheat — are going to be very reactive to both military action and to de-escalation. At a press conference late Feb. 11, the United States said military action could be days away; but sanctions could have a major impact. Russia is the world’s leading wheat exporter, so any sanctions could shift the balance of wheat trade. v

to further connect agriculture into the classroom

Agriculture education is also not limited to just the high school setting, but also within farm business management and at the post-secondary level. With these three sectors working together, the opportunities for students are endless.

Anything to show high school students there are good and rewarding jobs in agriculture is positive. MAAE finds that most of the career guidance websites make agriculture look like a low demand, low pay career field. In our experience, that is just not the case. We all need to fight that myth and push students into this viable career option. Careers in agriculture may provide the best job security of any industry because people will always have to eat.

Any partnerships formed between the ag community and higher education — whether it be high school recruiting, scholarships, tuition sponsorships, and general promotion — will help raise awareness and raise the bar for all of us.

There are several ways to develop successful partnerships. Get to know the local agriculture teacher to see what the program is doing. Communicate to help build upon their successes; but be willing to change in the ever-changing world of agriculture and technology. Be a guest speaker, line up a tour or be a resource for the teacher. Provide resources for the instructor to build their program and allow for their vision within the program to become a reality.

For more information on the MAAE, visit www. mnaged.org

Dr. Shane Bowyer is the Director of AgriBusiness and Food Innovation in the College of Business at Minnesota State University, Mankato and is on the GreenSeam Talent Committee. He can be reached at shane.bowyer@mnsu.edu. v