Old crop values were down across the board Friday, with May corn down nearly 14 cents, May wheat down 21, and May soybeans down 35. New crop values were a touch better on the need for risk premiums to shift into the new crop production period as well as a need for spec longs to get out of the front month before delivery.
For the week we saw May corn lose 19 cents and December corn gain 19. May soybeans lost $1.77, and November beans were down 90.
The war in Ukraine took an ugly turn over the weekend as Russian troops leaving a battered suburb of Kyiv allowed outside forces to see the horrors of what happened under Russian control for the first time since the initial invasion. The extent of civilian casualties has prompted other world leaders to use the phrase “war crimes”, with a push for even more sanctions.
However, Russia remains unfazed, announcing over the weekend plans to provide “friendly nations” with energy and food supplies at a discount to global values.
Peace talks are expected to continue virtually at some point this week, with optimism we could soon see a meeting between Putin and Zelensky take place. In the meantime, however, it appears Russia is doing everything they can to destroy Ukrainian infrastructure, even as troops are withdrawing.
We continue to monitor what is taking place in China as well as the second half of Shanghai went into lockdown Friday. While portions of the east side of Shanghai have seen their lockdown lifted, reports of some apartment complexes on their third week of what appears to be an indefinite lockdown and running short on food continue to grow, as does anger and frustration.
Logistics inside the country are a mess as anyone crossing provinces must follow a stringent set of testing and quarantine rules. Commerce in many areas, especially agriculture, has ground to a halt in many regions with case numbers continuing to grow.
Here in the U.S., traders are working to wrap their minds around the potential implications from last week's USDA planting intentions report. Some analysts have questions surrounding the accuracy of the report, as returns continue to drop with less than half of the surveys sent out this year filled out and usable.
While questions surrounding the accuracy of the data mean nothing to the market, the potential for greater changes in subsequent data than seen historically grows, as does risk.
In addition to survey accuracy, the fact that market prices have shifted dramatically since the first of March will also likely prompt some farmers to look to switch back to corn, or simply not switch as many acres as first intended.
Weather-wise, we are looking at the continuation of a cooler, wetter Eastern Corn Belt with dryness and warmth throughout much of the far Western Belt and Southern Plains. A potential pattern flip is on the horizon however, with many meteorologists expecting warmer, drier conditions to spread throughout the Eastern Belt with a far more active pattern in the Western Belt after the 10th of April.
Looking ahead, we will get updated export inspection figures later this morning. As has been the case over the last several weeks, we will be looking at corn inspections closely. Logistics continue to hamper what we are actually able to move, limiting what we could see from growth in export potential as a whole.
China currently has 209 million bushels of corn on the books but not yet shipped, with unknown accounting for 134 million. We need to ship around 58 million bushels of corn each week to meet current USDA expectations.
Wheat shipments have been poor lately, a trend that is expected to continue, while soys are expected to continue to see a seasonal downturn in shipment amounts.
Now that the acreage report is out of the way, it's all about weather, money flow, and geopolitical developments. Volatility will remain and likely continue to grow.
Corn up 8 to 10
Beans up 8 to 10