Marketing

The following marketing analysis is for the week ending April 8.

CORN — The week began with a bang when the U.S. Department of Agriculture announced the largest daily export flash sale since December! China bought 26.6 million bushels of old crop corn and 16 million bushels of new crop corn in their first significant purchase of old crop U.S. corn since May 2021! This may be the first sign that China needs to replace previous purchases Ukraine may not be able to execute.

During the week, new contract highs were set in corn contracts except for the nearby May contract. The April World Agriculture PHYLLIS NYSTROM Supply and Demand Estimates CHS Hedging inC. report was neutral; but prices St. Paul rallied in post-report trading into the weekend on cool, wet U.S. weather. The report didn’t give long position holders any reason to change their opinions.

The April WASDE report was for old crop only. The 2022-23 balance sheets won’t be released until the May report. The 2021-22 balance sheet had limited changes with feed usage lowered by 25 million and ethanol raised 25 million for no change in ending stocks at 1.44 billion bushels. The average trade estimate was 1.415 billion bushels. The average farm price was increased by 15 cents to $5.80 per bushel.

World ending stocks were higher than expected at 305.5 million metric tons compared to 300.9 mmt estimated and 292 mmt last year. China’s imports were slashed 3 mmt to 23 mmt. The USDA attaché in China expects corn imports at 24 mmt this year and 20 mmt next year. Ukraine’s corn production for 2021-22 was unchanged at 41.9 mmt; but exports declined 4.5 mmt to 23 mmt.

The USDA raised Brazil’s corn crop 2 mmt to 116 mmt and increased exports 1.5 mmt to 44.5 mmt. Safras and Mercado is forecasting Brazil’s corn crop at 118.15 mmt and Conab at 115.6 mmt. Conab raised its Brazilian export number by 2 mmt to 37 mmt. The USDA left Argentina’s corn crop at 53 mmt with exports unchanged at 39 mmt. The Buenos Aires Grain Exchange left their Argentine corn estimate at 49 mmt with 21 percent of the harvest complete compared to 23 percent on average and 17 percent last year. Their corn crop was rated 21 per-

corn/change* soybeans/change*

Stewartville $7.11 +.31 $15.81 -.20 Edgerton $7.55 +.66 $15.96 +.37 Jackson $7.57 +.67 $15.85 +.21 Hope $7.45 +.48 $15.92 +.07 Cannon Falls $7.19 +.57 $15.96 +.27 Sleepy Eye $7.49 +.64 $15.98 +.36 Average: $7.39 $15.91 Year Ago Average: $5.55 $13.58

Grain prices are effective cash close on April 12. *Cash grain price change represents a two-week period.

cent good/excellent and down 11 percent from the previous week.

Weekly export sales were within expectations at 30.8 million bushels for old crop and 5.7 million bushels for new crop. This brings total old crop commitments to 2.14 billion bushels which are down 18 percent from last year and fulfills 86 percent of the USDA export outlook. We need to average 15.2 million bushels of sales per week to achieve the USDA’s forecast. New crop sales are the highest for this date since 2013-14 at 101.2 million bushels.

Weekly ethanol production fell to its lowest in five weeks, down 33,000 barrels per day to 1 million bpd. Ethanol stocks saw their first decline in five weeks with a 626,000-barrel decrease to 25.9 million barrels. Both production and stocks fell more than expected. Net margins were down 7 cents to just a penny per gallon. Weekly gasoline demand rose 63,000 bpd to 8.6 million bpd. In the calendar year 2022, gasoline demand is up 5.2 percent vs. last year.

The West prepared this week to initiate more sanctions against Russia for the atrocities discovered when Russian troops pulled back to regroup and after they attacked storage facilities and ports in Odessa. Russian coal imports into Europe have been banned as well as Russian access to European ports. Germany said it will stop using Russian fuel “as quickly as possible.” APK-Inform estimated the cost of Ukraine shipping grain to Romania’s Constanta port at $133-$166 per ton vs. $40 per ton to deliver to Ukrainian ports before the invasion. Ukraine exported 1.1 mmt of corn in March vs. 4.1 mmt exported in February. Projections for declines in Ukrainian acreage this year range from 21 percent to 50 percent. Their ag ministry is on the low end and estimated 1.5 million acres of spring crops had been planted by April 1. Other countries in the International Energy Agency will release 60 million barrels of crude oil, following the U.S. announcement last week of 180 million barrels over the next six months. China is refraining from buying into new crude oil contracts with Russia despite deep price discounts. They are, however, honoring existing contracts. Shanghai went into total lockdown as Covid cases increased.

The USDA released its first crop report of the year. U.S. corn planting was 2 percent complete as of April 3 which was on par with the average. There was no planting done in the “I” states or Minnesota. By mid-April, U.S. corn planting is usually 5-10 percent complete. Brazil’s corn harvest is nearly complete and just slightly ahead of last year. CRP signup in the United States — which ended March 11 — showed only 1.8 million acres of the 4 million acres in expiring contracts were re-enrolled. New contracts of 800,000 acres were offered. The net effect would be 1.4 million fewer acres in CRP in this enrollment period, i.e., more acres into production. Agricultural Secretary Vilsack has stated opening CRP land to production is not a viable option; but did not rule out emergency haying and grazing. Seventy-five percent of the CRP acres are non-prime land and drought conditions are a factor this year.

Additional cases of bird flu were reported in the United States this week. It was estimated that 72 commercial and 48 backyard flocks across 24 states were found to be infected affecting 3 million birds. JPMorgan said commodities could surge as much as 40 percent if investors shift allocations to raw materials at a time of rising inflation.

Outlook: Now that the April WASDE is behind us, our attention will be increasingly focused on the U.S. weather and developments in Ukraine. The forecast through the first half of April looks cool and wet for the Midwest. If these conditions prove accurate it doesn’t bode well for additional corn acres to be planted. However, if the weather turns drier and warmer we could see prices retreat slightly.

The downside for corn should be limited by the USDA’s projected decline in U.S. acres, strong demand for U.S. corn, uncertainty in Ukraine, and the lack of “early” U.S. corn planting. December corn continued to make fresh new contract highs during the week and ahead of the WASDE report. December 2023 corn has closed higher for 15 consecutive sessions! A rising tide raises all boats and farmer selling has slowed down as prices have climbed higher. Until an event changes the money flow out of commodities, the downside looks limited for now. Keep an eye on planting progress and any signs of a ceasefire in Ukraine.

For the week, May corn rallied 33.75 cents to $7.68.75, July jumped 39 cents to $7.60.75, and December 2022 was 28 cents higher at $7.16 per bushel. The new contract high in July corn is $7.64 and $7.17.75 in the December contract. The new high in December 2023 is $6.44.25 per bushel.

The markets will be closed on April 15 in observance of Good Friday and will reopen on April 17 at

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Corn      Soybeans      Alfalfa      Wheat      Sugar Beets      TOTAL ACRES     

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Data will NOT be sold.

truckers are threatening a strike on April 11 unless demands for an increase their usual time. in grain freight rates are met. SOYBEANS — Soybeans found buyers MARKETING The National Sunflower Association this week after the believes U.S. acres will $1.27.5 sell-off in the previous week be up 20 percent this year vs. the and the prospect of a prolonged war in USDA’s forecast for a 10 percent Ukraine. Soybeans recovered approxi- increase. Ukraine was the leading mately 83 percent of those losses and exporter of sunflower oil which won’t have made their way back into the be the case this year. trading range we traded in for most of March. Weekly export sales were neutral with 29.4 million bushels for old crop

The April WASDE report was viewed and 11 million bushels for new crop. as neutral overall; but underlying Old crop total commitments are 2.06 demand, questionable U.S. weather, billion bushels and running just 7 perand uncertainty surrounding Ukraine cent behind last year. We need only 2.4 combined to attract buyers back to the million bushels of sales per week to hit market for the week. The November the 2.09 billion bushel target (pre-April 2023 contract traded to a new contract WASDE estimate). New crop sales comhigh at $13.90.75 per bushel in post- mitments of 311 million bushels are a report trading. record for this date.

The WASDE report for the 2021-22 Outlook: Demand for U.S. soybeans crop year increased exports by 25 mil- remains strong, and more export sales lion bushels, seed 4 higher, and residu- are expected to be announced next al 3 million bushels lower. After round- week after rumors of more business ing, ending stocks at 260 million bush- getting done this week. Possible frost els are down 25 million bushels from losses in Argentina, a smaller Brazilian last month and 2 million bushels lower crop, good Chinese demand, money than the average trade estimate. The guys buying commodities, and higher average farm price was steady from U.S. exports should keep soybeans suplast month at $13.25 per bushel. World ported. Many traders will be looking ending stocks came in at 89.6 mmt vs. for further cuts to ending stocks on 88.8 estimated, 90 mmt last month, next month’s balance sheet. We will and 103.1 mmt last year. China’s also get our first look at the 2022-23 exports were cut 3 mmt to 91 mmt. supply/demand sheet on the May The USDA cut Brazil’s soybean crop 2 mmt to 125 mmt and their export from 85.5 mmt to 82.8 mmt. Conab low12 WASDE report. Wide swings and ranges have become the norm, so buckle up and manage your risk. ered its Brazilian soybean production For the week, May soybeans rallied forecast by .4 mmt to 122.4 mmt. They $1.06.25 to $16.89, July surged $1.01.25 cut exports by 3 mmt to 77 mmt. to $16.68, and November 2022 was Brazil’s soybean harvest is 80 percent 88.75 cents higher at $14.95.5 per complete vs. 76 percent last year and bushel. November 2023 soybeans last week. It’s estimated Brazilian reached a new contract high this week farmers have sold 55 percent of this at $13.90.75 per bushel. year’s soybeans vs. 72 percent sold by this time last year. Strength in the Brazilian real and high inflation have kept their sales limited. Weekly price changes in July wheat for the week ended April 8: Chicago wheat jumped 74 cents to $10.58.25, Kansas City was up 96.25 cents at

The USDA kept Argentina’s soybean $11.10, and Minneapolis ran 57.25 crop at 43.5 mmt and exports at 2.8 cents higher to $11.22.5 per bushel. mmt. The BAGE sent a warning that The wheat balance sheet saw a decline recent frosts may result in a smaller in feed of 10 million, exports down 25 than estimated Argentine soybean crop million, and ending stocks up 25 milwhich they are forecasting at 42 mmt lion at 678 million bushels. The averwith 9 percent of the harvest complete age farm price was a dime higher at vs. 13.6 percent on average. Argentina’s $7.60 per bushel. v