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3 Big Things Today, March 9, 2022

Wheat Futures Plunge Overnight; Ag Equipment Prices Up But Headwinds Easing.

1. Wheat Futures Plunge in Overnight Trading

Chicago wheat futures plunged on profit-taking after six straight day of gains in which prices neared all-time highs.

Soybean futures were higher overnight.

Futures had risen on a litany of problems, the most pronounced of which was Russia’s attack on Ukraine.

The countries are the first- and third-largest exporters of the grain, according to the U.S. Department of Agriculture.

Ukraine ports have been seized or besieged by Russian forces and are not operating, and few countries are willing to buy Russian products, including grains.

Still, investors who were long the market, or bet on higher prices, likely sold their contracts and booked hefty profits after prices last week jumped 41% and again were higher this week before the sell-off started.

Russia said yesterday that it will restrict imports and exports of certain raw materials and other products after being hit will sanctions from almost every country with which it does business.

Russian President Vladimir Putin signed the decree, but it wasn’t specified which products will be included.

The move comes after the U.S. on Wednesday said it will ban Russian oil imports.

The USDA will release its monthly World Agricultural Supply and Demand Estimates (WASDE) report today. Some of the selloff in wheat and the gains in soybeans likely can be attributed to position squaring before the report.

Exporters said the Philippines bought 193,000 metric tons of spring wheat for delivery in the 2022-2023 marketing year that starts on June 1, according to the U.S. Department of Agriculture.

Wheat for May delivery dropped 48¢ to $12.38½ a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost 40¢ to $11.59½ a bushel.

Corn futures for May delivery fell 3¢ to $7.50 a bushel. 

Soybean futures for May delivery rose 20¾¢ to $17.10½ a bushel. Soymeal was up $6 to $479.30 a short ton and soybean oil futures gained 1.1¢ to 76.85¢ a pound.

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2. Farm Equipment Prices Up But Supply Chain Factors Easing, AEM Survey Says

Farm-machinery prices have jumped almost 12% year-over-year, adding another bit of pain to farmers in the U.S. already struggling with other supply chain issues and finding workers, according to a report from the Association of Equipment Manufacturers (AEM).

Some 90% of respondents who work in the agriculture industry surveyed by the group said they’ve had troubles finding workers.

Supply chain problems also are leading to higher prices for producers and construction managers, the AEM said.

“COVID-19, followed by growing numbers of employees leaving the workforce, have led to both shutdowns and scarcity of products,” the group’s director of market intelligence Benjamin Duyck said in a statement.

Equipment manufacturing companies said they’re addressing worker shortages by raising wages, offering bonuses, and increasing their recruitment efforts, among other measures, the report said.

Even with the measures they’re taking, the shortage of workers likely will be a problem for equipment managers for some time, Duyck said.

More than 95% of agriculture- and construction-equipment manufacturers said they’re seeing supply chain problems, but demand is beginning to normalize and suppliers are indicating improvement. Some 44% of respondents said they’re seeing supply chain problems starting to abate.

Still, the AEM report said, farm income has increased even with production-cost increases and members’ expectations are strong.

About 81% of respondents said they expect year-over-year growth and 91% said they expect that growth to continue, the group’s survey said.

“Despite all the challenges impacting the ag and construction equipment industries, growth is still expected (albeit at a slower rate than in recent months),” Duyck said.


3. Winter-Storm Warnings Issued From Utah to Missouri

Winter-storm warnings have been issued in a large chunk of the central U.S. as snow and ice are expected, according to the National Weather Service.

The warnings stretch from Colorado and southern Utah east into northern Missouri, NWS maps show.

In northwestern Kansas and southwestern Nebraska, up to 8 inches of snow are expected by the time the storm moves on, the agency said. Winds will gust as high as 50 mph.

The winter-storm warning in the area will last from late afternoon through early evening tomorrow.

In northern Missouri, 5 to 7 inches of snow are expected starting this evening, which will make travel "very difficult,” the NWS said.

Farther south in the Oklahoma and Texas panhandles, red-flag warnings are in effect due to dry weather.

Behind that, however, is a storm system that may dump from 1 to 3 inches of snow in the area starting tomorrow and ending on Friday morning, the agency said.

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