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3 Big Things Today, February 24, 2022

Wheat, Corn Limit Up Overnight; USDA Forum Launches in Shadow of Russian Attack.

1. Wheat, Corn Futures Limit Up in Overnight Trading

Wheat and corn rose by their daily limits overnight and soybeans futures surged overnight after Russia launched an attack on Ukraine, throwing global markets into a frenzy.

Russian President Vladimir Putin in a televised address yesterday authorized a “special military operation” in eastern Ukraine, which was shortly followed by explosions in several cities.

Ukraine said more than 40 of its soldiers and 10 civilians were killed, according to media reports. Officials in the country called the attack a “war of aggression.”

U.S. lawmakers on both sides of the aisle condemned the attack. President Joe Biden reportedly spoke with Ukraine President Volodymyr Zelensky by phone and called the attack “unprovoked and unjustified” and vowed to respond in a “decisive” manner.

While most of the world is gearing up for sanctions on products from Russia, China said it will continue to buy grain from the country. China is thus far the only country to not condemn the attack on Ukraine and called for more negotiations despite the deaths.

The attacks on Ukraine no doubt will impact global exports from the two countries.

Russia is the world’s largest exporter of wheat and Ukraine is the third-biggest shipper of the grain, according to data from the U.S. Department of Agriculture.

Russia is forecast by the USDA to ship 35 million metric tons of the grain in the 2021-2022 marketing year that ends on May 31, and Ukraine is expected to export 24 million metric tons.

Wheat for May delivery jumped 50¢ to $9.34¾ a bushel overnight on the Chicago Board of Trade, while Kansas City futures were up 50¢ to $9.68 a bushel.

Corn futures for May delivery surged 35¢ to $7.16¼ a bushel. 

Soybean futures for May delivery rose 51¢ to $17.22 a bushel. Soymeal was up $7.80 to $473.80 a short ton, and soybean oil futures gained 4¢ to 74.58¢ a pound.

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2. USDA Outlook Forum Kicks Off in Shadow of Russian Attack

The U.S. Department of Agriculture will kick off its annual outlook forum this morning, though the event this year will be overshadowed by Russia’s attack on Ukraine.

The USDA sends forecasts for corn, soybean, wheat, and cotton acreage for the upcoming crop year at the meeting, followed on the second day of the conference by outlooks for production, demand, and stockpiles.

Wheat acreage is somewhat known as the government in January said winter wheat planting rose 2% year-on-year to 34.4 million acres, Commerzbank economist Carsten Fritsch said in a note to clients today. Corn and soybeans are still up in the air.

“The price ratio between corn and soybeans, both of which compete for the same acreage, plays an important role when it comes to planting the two crops,” he said.

When soybeans are 2.5 times more expensive than corn, neither crop is given planting preference, according to long-term data.

IHS Markit analysts last month forecast a slight increase in soybean acres and a decrease in corn acres, Fritsch said, and it’s likely the USDA will follow suit and offer similar planting projections.

“The steep rise in soybean prices since the beginning of the year makes it probable that the soybean acreage will be increased to a greater extent,” he said. “The U.S. cotton acreage is likely to profit from the surge in cotton price to a 10-year high and be expanded accordingly.”


3. Winter Storms Blasting U.S. From Texas to Maine

Winter-storm warnings and winter-weather advisories have been issued from central Texas northeast to the Atlantic Ocean, according to National Weather Service maps.

In eastern Oklahoma, snow, freezing drizzle, and sleet are expected today as a warning is in effect until 6 p.m., the NWS said in a report early this morning.

In eastern Missouri and southern Illinois, “moderate to at times heavy mixed precipitation” is forecast. Up to 0.25 inch of ice is expected to accumulate, the agency said.

“A few power outages and minor tree damage are likely due to the ice,” the NWS said. “Travel could be hazardous.”

In southern Michigan and northern Indiana and Ohio, a mix of snow, sleet, and rain is expected today with up to 3 inches of snow and sleet accumulating.

Ice accumulations of about 0.10 inch are predicted, the NWS said.

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