- HEADLINES: Chicago recovers from morning lows as equity markets rally.
- Chicago ag markets are mixed at midday, with nearby corn and soy spreads continuing to perform and with wheat markets again digesting stagnation in Russian interior and fob prices. Russian wheat is still buyable at $290/mt, basis spot, while Russian interior prices this week are unmoved. Ukrainian ports are operational. Concern over Black Sea exports this summer is elevated, but grain is moving today.
- Crude oil markets in the US and London have pared losses, with spot WTI down $0.60/barrel, some $2.00 above morning lows. The Dow at midday is up 300 points as global Central Bank policies give stability to financial market liquidity, and as the US banking sector is likely to draw investments from riskier institutions in emerging markets. Macro markets’ reaction to the rescue of Credit Suisse overnight lean slightly positive but, overall, the macro landscape has become somewhat complex as governments must combat both inflation and liquidity. Risk aversion will be a theme for some time to come.
- US export inspections in the week ending March 16 were positive for corn and beans and uneventful for wheat. Corn shipments totalled 47 million bu, vs. 40 million the previous week, a new crop year high and 4 million bu above the pace needed to meet the USDA’s forecast. USDA’s forecast is now seen as 25-50 million bu too low if for no other reason than the gathering of Argentina’s crop won’t be completed until August. Soy shipments totalled 26 million bu, vs. 23 million the previous week and a three-week high. Soy exports since late Feb are near unchanged from last year despite record Brazilian production. Wheat shipments were 14 million bu, vs. 9 million the previous week.
- For their respective marketing years to date, the US has shipped 690 million bu of corn, down 36% year-on-year, 598 million bu of wheat, down 2%, and 1,619 million bu of soybeans, up 3% from the previous year. Corn inspections must average 43 million bu to meet USDA’s target. Soy shipments must average only 14 million bu.
- The Central US forecast at midday is colder and snowier in the Northern Plains and Upper Midwest than previously. Snowfall of 1-6” is offered to the Dakotas and MN in the next 72 hours. A second event is forecast Sat-Mon with similar accumulation probable. A needed warmer temperature profile evolves across the heart of the Midwest by late week, but the intensity of current and upcoming snowpack across the north will sustain abnormal cold there. Freezing temperatures linger in the Dakotas, MN, WI and parts of MI into April 2.
- Soaking Argentine rainfall is imminent, with the GFS projecting widespread totals of 1-4” in Cordoba, Santa Fe and Entre Rios Tues-Fri. Argentine rainfall at this point is less important for corn and soy yields, but a full replenishment of soil moisture is needed prior to wheat seeding in May. The Brazilian outlook remains largely favourable as the wet season persists across Central and Northern areas, and needed dryness impacts Parana and Mato Grosso do Sul. The duration of coming dryness in Southern Brazil does warrant attention as some 20% of safrinha corn in Parana remains unplanted. Weather there and in Mato Grosso matters until late April.
- Funds have shed sizable grain market length, while index funds’ net wheat long at 87,000 contracts is the smallest on record. It is clear risk-off has dominated strategy since mid-February. But normal seeding dates and favourable Central US weather this summer are needed to build global stocks in 2023. Volatility will continue.
- In the EU MARS, the EU’s Monitoring Agricultural Resources unit, reported this year’s average soft-wheat yield is seen at 5.99 mt/ha, up from 5.8 mt/ha last year, they added:-
- Winter-crops are in fair to good shape across most of Europe, after the mild winter.
- Still, there is a severe rain deficit in southern Spain and Portugal, with water reservoirs for irrigation very low.
- Soil moisture is also low in countries including Romania, Bulgaria and Hungary, necessitating spring rain to aid crops.
- Crop yield estimates as follows, in tons per hectare:
| Crop | March estimate | 2022 yield | 5-year average |
| Soft wheat | 5.99 | 5.8 | 5.81 |
| Durum wheat | 3.53 | 3.26 | 3.5 |
| Winter barley | 5.91 | 5.92 | 5.77 |
| Rapeseed | 3.29 | 3.33 | 3.1 |