On The Money Grain Commentary 3-10-22

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Corn Outlook:

As the conflict between Ukraine and Russia rages, so have the stress levels and emotions of grain traders which has increased market volatility. This is not going away anytime soon and will continue to impact the bottom line of producers, end users, and consumers. Because of the conflict, the USDA has lowered Ukraine’s exports 6.0 million tons. Meanwhile, export inspections for U.S corn last week were a marketing year high at 62.2 MB. USDA has raised their forecast 75 MB to 2.5 BB. Shipments to China continue to grow and were the highest of the season at 555,170 tons. Although corn values are at astronomical levels, they will likely be underpinned from shrinking global stocks, strong exports, possible additional cuts in Ukraine’s exports, and uncertainty of the growing season that lies ahead in the Corn Belt.

Bean Outlook:

Because of the drought in South America, the USDA has lowered Brazil’s production forecast 7.0 million tons. Meanwhile, their exports have also been reduced 5.0 million tons. Currently, weather is now less of a factor as harvest is well underway at 55 percent complete. Looking at U.S. exports, they are projected to rise 40 MB to 2.090 BB. Last week, inspections were just nominal at 28.1 MB with China taking 8.9 MB, their lowest since mid-September. Shipments to them peaked in early November and have since fallen 77 percent. As a result, USDA has lowered their import forecast 3.0 million tons.

Wheat Outlook:

Everyone has their eye glued on wheat. The Ukraine-Russia conflict casts a big question on Black Sea shipments which comprises 28.5 percent of world exports. In this month’s report, the USDA cut their exports 7.0 million tons. This will most likely impact shipments to northern Africa. Other concerns in wheat are the drought in the southern Plains, and China reported to have their worst crop in history. Although there is a cloud surrounding shipments from the Black Sea Region, increased business to the U.S. has not developed with the export outlook being lowered 10 MB to 800 MB. Inspections last week were only nominal at 12.6 MB.

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