3 Big Things Today, March 18, 2022
1. Soybeans Rise, Grains Fall in Overnight Trading
Soybean futures were higher in overnight trading after the National Oceanic and Atmospheric Association (NOAA) released a report saying it expects prolonged drought in the western U.S. and higher-than-normal temperatures throughout much of the country this spring.
About 60% of the continental U.S. -- basically the western half -- has a good chance of drought the spring, the agency said in a report. If realized, that would be the largest drought coverage since 2013, said Jon Gottschalck, the chief of the Operational Prediction Branch of NOAA's Climate Prediction Center.
"Severe to exceptional drought has persisted in some areas of the West since the summer of 2020 and drought has expanded to the southern Plains and Lower Mississippi Valley," he said.
The southern Rockies and southern Plains have the greatest chances of seeing above-average temperatures this spring, the NOAA said in its report.
Wheat futures plunged overnight as negotiators reportedly make headway in negotiations to end Russia's attacks on Ukraine.
A plan that would keep Ukraine neutral is being "seriously discussed," Russian foreign minister Sergei Lavrov told RBC News.
Negotiators are reportedly discussing a 15-point plan that would include a cease fire and force Ukraine to be neutral and impose curbs on its armed forces, Sky News reported.
Ukraine would not join NATO under the agreement.
Still, Russia continued to pound its neighbor, hitting the capital city of Kyiv and large cities including Kharkiv and Kramatorsk. Russian and Ukrainian forces continue fighting in other cities.
Russia is the world's largest exporter of wheat and Ukraine is the third-biggest shipper.
Soybean futures for delivery rose 7 3/4¢ to $16.76 ¼ a bushel overnight on the Chicago Board of Trade. Soymeal was up $4.20 to $478.30 a short ton and soybean oil futures lost 1.89¢ to 72.74¢ a pound.
Corn futures for May delivery fell 2 1/2¢ to $7.52 a bushel.
Wheat for May delivery fell 15 3/4¢ to $10.82 ¼ a bushel in Chicago while Kansas City futures lost 12 1/4¢ to $10.80 a bushel.**
2. Grains, Bean Export Sales Fall Week-to-Week
Grain and bean sales to overseas buyers all declined in the seven days that ended on March 10, according to the USDA.
Exporters sold 1.84 million metric tons of corn, down 14% from the previous week, the agency said. That's down 14% from the previous week but up 64% from the prior four-week average.
Japan was the big buyer at 538,400 metric tons, followed by an unnamed country at 303,000 tons and Mexico at 235,100 tons, the government said. Colombia bought 179,800 metric tons of U.S. corn and South Korea took 133,600 tons. Sales for the 2022-2023 marketing year that starts on Sept. 1 totaled 204,000 metric tons.
Exports for the week fell 28% to 1.27 million tons.
Wheat sales last week totaled 145,900 metric tons, down 53% from both the previous week and the prior four-week average, the USDA said.
Colombia bought 46,200 metric tons, Mexico was in for 42,700 tons, Chile bought 29,300 tons, Vietnam took 25,500 tons and Nigeria purchased 23,600 tons. The total would've been higher but an unknown destination canceled cargoes of 91,400 tons.
Sales for delivery in the 2022-2023 marketing year that starts on June 1 for wheat were reported at 325,600 metric tons.
Wheat exports for the week totaled 249,500 metric tons, down 35% week-to-week, the government said.
Soybean exports through March 10 came in at 1.25 million metric tons, down 43% from the previous week and 11% from the average, the USDA said.
China bought 395,500 metric tons, an unnamed country took 267,600 tons, Egypt purchased 241,800 tons, Taiwan was in for 162,500 tons and Indonesia bought 83,200 tons.
For 2022-2023, sales were reported at 477,000 metric tons, the agency said.
Exports for the week came in at 714,300 metric tons, down 14% from the previous week, the USDA said in its report.
3. Dry Weather Expected in Parts of Southern Plains
Dry, windy weather is expected in much of the southern Plains where crop conditions are worsening.
High-wind warnings have been issued for much of Texas and all of western Oklahoma, while red-flag warnings are in effect in much of central and western Texas, according to the National Weather Service.
In the Oklahoma and Texas panhandles, winds will be sustained at 35 miles an hour with stronger gusts expected, the NWS said in a report early this morning.
The windy conditions along with low humidity will elevate fire weather to critical, the agency said.
Wheat in Kansas, the biggest producer of wheat in the U.S., was rated 23% good or excellent as of March 13, down from 24% a week earlier and well below the 38% that earned top ratings at the same time last year, the USDA said.