Prices updated as of 6:50am CDT.
Feedback from the Field
Were you able to dodge showers over the weekend and keep your planter rolling?! Share your insights with us in our ongoing Feedback from the Field survey!
Feedback from the Field is an open-sourced, ongoing farmer survey of current crop and weather conditions across the Heartland. If you would like to participate at any time throughout the growing season, click this link to take the survey and share updates about your farm’s spring progress. I review and upload results daily to the FFTF Google™ MyMap, so farmers can see others’ responses from across the country – or even across the county!
Corn
Corn and soybean prices fed off yesterday’s gains in the overnight trading session, with corn also deriving some extra spillover strength from a rally in the wheat market this morning. Corn prices rose $0.03-$0.06/bushel, sending nearby Jul24 prices to $4.5725/bushel and lifting new crop Dec24 prices to $4.7775/bushel at last glance.
After a selloff yesterday, energy prices edged up in a round of profit-taking, which also contributed to overnight gains for the corn and soybean complexes. A softer dollar and some jitters about rainy forecasts for the Midwest that may disrupt planting progress also lent strength to corn and soybean prices this morning.
The “war effect” on Ukraine’s agricultural shipments is about to make its mark, over two years after Russia’s invasion began in February 2022. Ukraine’s agriculture minister told Reuters in an overnight interview that its key commodity exports – particularly corn and wheat – are going to shrink by almost a quarter in the upcoming 2024/25 marketing year.
It marked the first forecast for 2024/25 production that Ukraine’s ag ministry has published and cited smaller acreage due to the war as its primary cause. Ukrainian ag minister Taras Vysotskiy told Reuters the government expects only 787 million – 827 million bushels (20-21 million metric tonnes) of Ukrainian corn will be harvested this fall, down from 1.063 billion bushels last year.
Ukraine’s 2024 wheat harvest will drop by 22% from last year’s haul to 514 million bushels (14MMT). Vysotskiy expects that 10% fewer Ukrainian grain acres will be harvested this year due to the war. While crops are currently in good condition, dry weather remains a risk in Eastern Ukraine and frost is always a threat in May.
Ukrainian agricultural production has remained remarkably resilient in the two years following Russia’s invasion. I think most of us in the commodity markets expected the drop-off in production to occur more quickly in the invasion’s aftermath. However, we are finally starting to see the impacts of the war take its toll on not only Ukrainian grain production, but also the global wheat and corn balance sheets.
Soybeans
There was plenty of bullish news available to lift up soybean prices this morning. Indeed, a weaker dollar, rain delays in the Midwest, stronger energy prices, and worries about smaller Ukrainian grain and oilseed production contributed to soy’s gains this morning.
Soybean prices rose $0.10-$0.15/bushel on the sentiments, boosting nearby Jul24 prices to $11.835/bushel and new crop Nov24 futures to $11.7575/bushel. But the edible oil market also provided some bullish tailwinds for the soybean complex early this morning.
Top global edible oil importer India reported a notable monthly increase in import volumes during the month of April. Total import volumes increased 13% from the previous month to 1.3 million metric tonnes (MMT), according to import dealers.
The surge in import volumes was driven by a staggering 79% monthly increase in India’s soyoil imports, which rose to a 10-month high of 391,000MMT in April 2024. Palm oil import volumes increased 41% on the month to 682,000MMT.
Palm and soybean oil traded at three-year lows over the past month, allowing India to capitalize on low prices. Palm oil prices have also fallen nearly $50MMT in the past month, providing India with ample buying opportunities for their edible oil supplies.
This development may not directly impact U.S. farmers – India imports its soybean oil supplies from Brazil and Argentina – but it will have a global pricing impact that is shaping U.S. oilseed pricing this morning.
Wheat
Overnight, Russia launched a missile strike on the key Ukrainian agricultural port of Odesa, reviving fears about Black Sea supplies. It marked the third Russian missile strike on Odesa over the past three days. As mentioned earlier, Ukrainian grain harvests are already expected to be nearly a quarter smaller than last year’s due to the war’s impacts.
Recent rains in Russia were not likely enough to revive soil moisture levels and upcoming forecasts are trending warm and dry for the next two weeks – risking further drought stress to wheat crops in the world’s largest wheat exporting country.
The dollar eased slightly this morning, but remains relatively strong. Regardless, the overarching worries about Black Sea supplies lifted U.S. wheat prices $0.05-$0.11/bushel this morning. Kansas City futures rose 2% higher on the Black Sea jitters.
"In wheat, changes in rainfall forecasting models are driving the market, with two areas in particular under scrutiny: southern Russia and the Plains of the American wheat belt," Agritel analysts said in a note, as reported by Reuters.
Extended forecasts for the U.S. Plains are also trending dry over the next week, though there is a chance for showers expected to pop up next weekend.
Early morning gains were limited by heavy export paces continued to be shipped into the international markets by Russia.
Weather
Another day, another round of showers for the Heartland. Today’s severe thunderstorms will move slightly east of yesterday’s storms, as heavy rains and severe move into the area between the Missouri and Mississippi River Valleys, according to NOAA’s short-range forecast. More showers and less severe thunderstorms are expected to reside between the Eastern Plains, Northern Plains, Upper Midwest, and Eastern Corn Belt all the way down to the Gulf Coast.
Over the next 24 hours, the Red River Valley, Eastern Iowa, Southern Wisconsin, Missouri, Eastern Kansas and Oklahoma, and East Texas will see up to an inch of rain – if not slightly more. Surrounding areas will see lighter accumulation during that time, with totals reaching up to a half inch.
Showers are expected to pop up and linger over the Heartland on and off over the next couple days. Temperatures will continue to run warm this week, with highs in the 50s in the Dakotas, Minnesota, and Pacific Northwest and into the 60s and 70s in the rest of the Heartland through Friday.
However, the key benefit to these late week showers is that it will provide winter wheat crops and pastures in the Southern Plains with more moisture, which is sorely needed as 30% of winter wheat acreage in the U.S. currently resides in D1-D4 drought conditions.
Temperatures will continue to run above average into the middle of next, according to NOAA's 6-10-day outlook, but only for the area east of the Southern Plains to the Upper Midwest. At that time, temperatures will trend below average for the Western Plains and Pacific Northwest, though they will continue to run warm further east. Above average chances for showers will continue to stretch across the upper two-thirds of the country, with the Northern Border and the Great Lakes region experiencing the highest chances of accumulation.
Warm temperatures will continue recede through late next week in NOAA’s 8-14-day forecast. During that time, the High Plains and Upper Plains will battle below average temperatures, while the Upper Midwest sees more seasonal norms with regard to temps. The Southern Plains through the Eastern Corn Belt will still be enjoying warmer than average temperatures next weekend. Moisture forecasts are once again projecting an above average chance for widespread showers across the Heartland during that time, with the Southern Plains and Southeast enjoying the highest chances for moisture.
It's not idyllic planting weather forecasted into next week, so farmers can expect to continue dodging showers as they race to complete planting activities.
Financials
S&P 500 futures rose 0.64% this morning to $5,078.50. Traders are breathing a sigh of relief after Federal Reserve Chairman Jerome Powell reassured markets yesterday that the Fed will keep interest rates unchanged, even following an uptick in inflation in March that had some market watchers worried that the Fed would increase interest rates.
“But a string of disappointing readings on price and wage pressures have led investors to put less weight on the central bank’s outlook and more attention on how the economic data unfold,” Nick Timiraos wrote for the Wall Street Journal yesterday.
“Powell can say whatever he wants, but ultimately the inflation numbers will dictate what happens,” Neil Dutta, head of economic research at Renaissance Macro Research, told the WSJ.
But Powell didn’t necessarily take the possibility of interest rate hikes off the table, either. Markets have been rattled at the recent surge in inflationary numbers, especially as they consider that wage increases aren’t keeping pace with price increases. Rate hikes are off the table for now, but if we continue to see increasing inflation, the Fed may be forced to increase interest rates.
What else I’m reading at www.FarmFutures.com this morning:
- Here are Naomi Blohm’s tips and tricks to capturing summer corn rallies.
- Policy editor Josh Baethge summarizes the recent policy updates to bovine influenza and sustainable aviation fuel.
- Analyst emeritus Bryce Knorr is watching these four marketing items as peak planting season ramps up.
- Just like in the NFL draft last week, AgMarket.Net hedging strategist Tyler Schau recommends farmers stick to their strategy when it comes to grain marketing plans.
