Mark's Market Talk

Apr 04, 2022

The USDA released their 2022 March intended planting and stocks report last Thursday. The stocks portion of the report came close to the projections. Corn stocks were 30 million less while bean stocks were 22 million larger than the average guess. However, both were a lot higher than one year ago which was expected. That amount was 155 million more for corn and 368 million bushels more beans than March of 21. That shows how far behind we are in exporting beans this year. It will take a large second half bean sale season this year to even things up a bit. It may still happen. China has been more interested in new crop beans due to the inverse in the market. If July and November board prices come together, they may switch to buying old crop. It appears today old crop prices may be inflated; this coming week will give us a better insight to what may be in our immediate future. The specs may continue to liquidate, or they may start supporting their investments. The big news in this report was the acre numbers. The trade was predicting US farmers would plant 92 million acres of corn compared to the 93.4 that was planted in 21. The report predicted 89.5 million acres of corn would be planted. This was a major shift and was not expected. The same report predicted a record 91 million acres of beans would be planted compared to the trade estimate of 88.9 million acres. In 21 we planted 87.2. So, at the end of the day those that had been predicting an acre switch had a grin on their face while others were left scratching their heads. For reference wheat acres were estimated to be 500,000 acres less than the trade guess but were still 700,000 acres more than 21. If we add all 3 crops together farmers will plant 600,000 more acres to these 3 crops than last year so there was not acres lost to other crops such as cotton. It was surprising that the 3 I states each are predicted to plant 300,000 less acre of corn. Minnesota will plant 600K less while North Dakota is down 500,000. The seven main mid-west corn states will plant about 2 million less acres of corn. Not sure anyone saw this coming. Normally the switch is in the fringe areas, not in the heart of corn country. Even though new crop prices were more favorable to corn, the high fertilizer cost has people’s attention. In some cases, it is not only the cost of these inputs, but it may also be the availability of inputs. For the week July corn was 13 cents lower while Dec was 19 higher as risk values shift to new crop. July beans lost 1.22 last week while the Nov was down 90 cents. Meanwhile Chicago wheat was down 1.08. This coming week may show us what direction we head for now. The specs are nervous the bean market while they do not seem ready to overload the Dec corn market either. The war in Ukraine is becoming old news for the grain markets. The next mover will be our weather and that story won’t develop for a few weeks. As far as Russia having trouble selling commodities, they are money poor and will probably start discounting prices and countries who don’t care about sanctions will buy their oil and crops. Poor and hungry countries will do what they must in order to survive.