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The reality is setting in that the Ukraine-Russia conflict will probably not be resolved very soon. This raises questions about their exports and ability to plant a crop. Some sources put their corn planting at 40 percent below a year ago. They are the world’s fourth largest exporter of corn accounting for 16.4 percent of global exports prior to the conflict. A shortfall would have to be made up from the U.S. or South America. This could create a dilemma as fewer acres of corn are expected to be planted in the Midwest this spring because of higher fertilizer costs, plus the western section of the Corn Belt is experiencing a drought. In other matters, export inspections last week were above the previous week at 57.7 MB. Up until this point, China has been an aggressive buyer of corn, but the pace of shipments to them has fallen the past two weeks which is a concern.
Soybeans are currently taking a backseat to corn and wheat because of the Ukraine-Russia conflict. News is mostly sparse with prices being supported from inflationary pressure. Harvest in Brazil is in its final stretch at 69 percent complete with disappointing yields being reported. Last month, USDA lowered Brazil’s production 7.0 million tons to 127.0 million, and it will likely be reduced again in April. Looking at exports, inspections last week were run of the mill at 20.0 MB with China taking 6.0 MB. Since early November, shipments to them have peaked and since fallen 80.8 percent. While not much is being said, the planting intentions report is next week with an increase in acres expected.
Wheat has become extremely volatile because of the war in Ukraine with the 85-cent expanded limit in futures becoming the norm rather than the exception. This is putting a strain on commercial users because lines of credit are quickly reaching their limit. Market volatility will likely persist because Ukraine accounts for nearly 10 percent of global exports. While a disruption in their shipments will likely send some business to the U.S., it has not been seen, so far, as inspections last week were mediocre at 12.1 MB.
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