Written Commentary
SOYBEANS
USDA offered some interesting numbers today. Trade was looking for more US 2022 soybean acres but not record high. Numbers imply that high fertilizer cost had more of an impact to acres mixture than expected. US spring wheat farmer also switched from wheat to beans. USDA est US 2022 soybean acres at a new record high and 91.0 million acres versus average guess of 88.7 and last year 87.2. IL, IA and IN farmers switched from corn to soybeans. If realized US 2022/23 carryout could increase 100 mil bu. USDA also estimated US March 1 soybean stocks near 1,931 mil bu versus average guess of 1,902 and 1,562 last year. Key to 2021/22 US soybean carryout will be final export demand. Weekly US soybean export sales were 48 mil bu. Total commit is near 2,033 vs 2,232 last year.
CORN
USDA estimated US 2022 corn acres at 89.5 million acres versus average guess of 92.0 and last year 93.4. If realized US 2022/23 carryout could drop 450 mil bu. IL, IA and IN farmers reduced corn acres from last year and switched to beans. Over the last few days CZ has rallied from a low near 6.31 to today’s high near 6.91.Rally in corn prices and todays drop in soybeans could shift some final acres from soybeans to corn. USDA also est US March 1 corn stocks near 7,850 mil bu versus average guess of 7,877 and 7,696 last year. Key to 2021/22 US corn carryout will be final export demand. Weekly US corn export sales were only 25 mil bu. Total commit is near 2,112 vs 2,587 last year. Corn market still has to price in the continued Ukraine war. Ukraine farmers are planting their 2022 crops. All Ukraine people should be people of the year. USDA will have a tough time reconciling in May US 2022/23 corn Supply and Demand given the lower acres. Adding to their difficulty will be impact Ukraine war will have on Ukraine corn exports. USDA will also have to reduce EU corn imports. EU looking at cold and wet weather that could slow corn plantings. Like the US, EU farmers could switch corn acres to oilseed. Rains in US east Midwest and Delta could slow spring planting there.
WHEAT
There is a saying in Chicago that if you don’t like the weather wait a few days and it will change. Same could be said about the extreme volatility in wheat futures. USDA est US 2022 all wheat acres at 47.35 million acres versus average guess of 47.77 and last year 46.7. Spring wheat acres were 11.2 vs 11.8 expected and 11.4 ly. WK ended down 21 cents. Managed funds were net sellers of 12,000 Chicago Wheat and bought 17,000 corn. KWK is ended down 12 cents and near 10.32. MWK ended up 21 cents and near 10.79. WK was near 8.10 on Feb 22. Ukraine War rallied WK to a high on March 8 near 13.63.Futures the dropped to 9.72. Today, WK tested 10.75 before ending near 10.06. USDA also estimated US March 1 wheat stocks near 1,025 mil bu versus average guess of 1,045 and 1,311 last year. Key to 2022/23 US wheat carryout and prices will be weather. Weekly US wheat export sales were only 3 mil bu. Total commit is near 697 vs 922 last year. USDA will need to reconcile drop in EU and Black Sea wheat exports and increase in India and Australia. China announced they will spend $315 million to grow their winter wheat crop. USDA est China wheat stocks at 142 mmt vs World total of 281.
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