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Ag Market View for Feb 25.22

SOYBEANS

Soybean price volatility was unprecedented over the last 2 days. Russia invasion of Ukraine triggered a rally to near 17.59 SK. Talk today of China requesting Russia to seek peace talks with Ukraine and fact Funds were disappointed that US did not sanction Russia food and energy companies sent SK down to 15.79.  Crude oil range was 98.44 to 88.49. Weekly US soybean export sales were near 45.3 mil bu. Total commit is near 1,812 mil bu vs 2,195 last year (-383). USDA goal is 2,050 vs 2,261 ly (-211). Since November, USDA has lowered South America soybean crop 735 mil bu and increased US soybean exports only 10. USDA estimated US 2022/23 soybean carryout at 305 mil bu versus most private estimates near 100. This also triggered fund liquidation of long SX22 positions.

CORN

Corn futures ended sharply lower. Corn futures price volatility was unprecedented over the last 2 days. Russia invasion of Ukraine triggered a rally to near 7.16 CK. US farmer increased cash selling over 7.00. Talk today of China requesting Russia to seek peace talks with Ukraine and fact Funds were disappointed that US did not sanction Russia food and energy companies sent CK down to 6.55.  Crude oil range was 98.44 to 88.49. Weekly US corn export sales were near 41.0 mil bu. Total commit is near 1,873 mil bu vs 2,323 last year (-450). USDA goal is 2,425 vs 2,753 ly (-328). China corn export commit is near 12.1 mmt with 4.6 shipped. There were some rumors that China might cancel the unshipped open US corn sales. USDA estimated US 2022/23 corn carryout at 1,977 mil bu versus most private estimates near 1,100. This also triggered fund liquidation of long CZ22 positions. There was talk that if Russia takes over Ukraine quickly,The 2 countries could begin shipping corn and wheat as soon as next week. The combined counties would be 20 pct of World corn trade and some feel they could offer corn at a discount. Russia promised China that they would get the corn from Ukraine they need. USDA estimated US 2022 corn, soybean, wheat and cotton acres at 240.7 million acres up 1.3 million from 2021.

WHEAT

Wheat futures price volatility was unprecedented over the last 2 days WK tested 9.60 but ended down the 75 cent limit and near 8.59. KWK tested 9.81 but ended down the 75 cent limit and near 8.91. MWK was down the 60 cent limit and near 9.60. US Dollar was lower. Fact US did not impose sanctions on Russia food and energy companies was disappointing to the funds and they are liquidating long positions. Word that China asked Russia to have peace talks with Ukraine also triggered risk off trading. Russia though said talks would only happen if Ukraine stopped resisting Russia advance. Weekly US wheat export sales were near 19.0 mil bu. Total commit is near 661 mil bu vs 866 last year (-205). USDA goal is 810 vs 992 ly (-182). USDA estimated US 2022/23 wheat carryout at 731 mil bu versus most private estimates near 585. This also triggered fund liquidation. This week, USDA dropped KS wheat crop rating from 30 pct G/E last month to 26 and 40 ly. OK was 9 pct G/E vs 16 last month and 48 last year.  There was talk that if Russia takes over Ukraine quickly, the 2 countries could begin shipping wheat as soon as next week. The combined counties would be 30 pct of World wheat trade and some feel they could offer wheat at a discount. 

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