On The Money Grain Commentary 3-25-22

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Corn Outlook:

Corn exports remain solid with inspections last week at 77.2 MB, the second highest of the season. China took the lion’s share of shipments with South Korea a close second. While the pace of shipments has been rising since mid-November, corn values have drifted since February. This is likely because expectations for large sales to China have been anticipated for several months. Meanwhile, 92.0 million acres or more are forecast to be planted this spring. Next week, the USDA will give their assessment in the planting intentions report. With weather coming into the spotlight, production scenarios from the gurus and their yield outlook will be abundant. Here is some food for thought. Yields were down in 2019 and higher in 2020. Looking at past years, when yields are down one year, they generally rise the next two growing seasons. If history is an indicator, the odds favor them being higher for 2021.

Bean Outlook:

Traders remain positive in their outlook for soybeans because of tight stocks, but there are some cracks showing as mentioned in previous comments, namely exports. Last week, inspections were a marketing year low at 17.9 MB for the second week in a row. Since peaking in November, the pace of shipments has declined 74 percent. Meanwhile, shipments to China have fallen 89 percent. With Brazil’s harvest 59 percent complete and a record crop being forecast, competition for China’s business will become more intense. However, with tight stocks and the growing season ahead, traders will likely support the market a while longer as their focus turns to weather. Next week’s planting intentions report may shed more light. In the meantime, while soybean yields were higher last season, their yield history tends to be more erratic than corn and less predictable.

Wheat Outlook:

Winter wheat has come out of dormancy which means that weather and crop conditions will be more in focus. Recent showers in the Plains should help the crop get off to a good start. Currently, conditions in Europe, Ukraine, and Russia are favorable. In other developments, exports continue to improve with inspections last week at 23.3 MB. This was just above the average of 22.8 MB that must be shipped each week to reach USDA’s target of 985 MB. Presently, shipments are on track for 945 MB. Right now, the headwind facing wheat is record global stocks.

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