February 28, 2022
Good morning,
Markets are sharply higher this morning with corn up 30 and soybeans up 65. Friday, the market sold off hard at the lack of teeth in the sanctions put against Russia. Today is a different day, and a different feeling.
Ceasefire talks between Russian and Ukrainian officials began on the Belarusian border on Monday as Russia faced deepening economic isolation four days after invading Ukraine. It was not clear whether any progress could be achieved after Russian President Vladimir Putin put Russia’s nuclear-armed units on high alert on Sunday.
The Western-led response to the invasion has been emphatic, with sanctions that effectively cut off Moscow’s major financial institutions from Western markets. Russia’s ruble currency plunged 30% against the dollar on Monday. Countries also stepped-up weapons supplies to Ukraine.
World corn and wheat trade will be disrupted, as will farming in the Ukraine. Infrastructure break downs and port problems will plague them for months.
Limit higher and lower moves appear to be the norm right now, but at some point this settles down and fundamentals will come back into play. Be careful not to get too complacent with these elevated prices as they could turn on us quickly.
Have a safe day!
Garry Gard
920-348-6844
February 18, 2022
Good morning,
Markets are stronger to open the day with corn up 4 nearby and 1 for new crop while soybeans are up 7 across the board.
Ukrainian government forces and pro-Russian rebels reported increased shelling in eastern Ukraine for a second straight day on Friday, an escalation that Washington and other Western allies say could form part of a Russian pretext to invade. A diplomatic source with years of direct experience of the conflict described the shelling over the past two days as the most intense along the frontline in eastern Ukraine since major combat there ended with a 2015 ceasefire.
Moscow has said this week it is drawing down forces massed near Ukraine. Western countries say they believe the opposite: more equipment and personnel are arriving and making the sort of preparations normally seen in the final days before an attack. The marked escalation of shelling in eastern Ukraine, where government troops have faced Moscow-backed rebels since 2014, has stoked global alarm since Thursday. Both sides have said shelling stepped up dramatically, although so far, no deaths have been reported.
The weather forecast for Southern Brazil and Argentina is back to cooler this morning on the heat maps. Rain moved through Mato Grosso last night and totals were as high as 1.5 inches. Harvest is slow and planting for second season corn is behind. Argentina has good chances of the rains next week and the heat up North is backing off. Most of Argentina will see an inch of rain and some areas as much as 2-3″. Southern Brazil will be mostly dry where they are on the East side of the dome and most of the moisture stays locked out. This forecast is a little bearish with some rain and temperature breaks coming for Argentina.
Markets will be closed on Monday for Presidents Day. I expect choppy trade today with a slightly higher close as we head into a 3-day weekend for traders.
Have a Safe Weekend!
Garry Gard
920-348-6844
February 16, 2022
Good morning,
Corn is up 4 and soybeans are up 20 to start the day.
The markets sold off yesterday on reports that Russia had pulled some troops back from the boarders and that the Russian/Ukraine issue was de-escalating some with talks.
Wednesday Russia said more troops are withdrawing along the Ukraine border, it published video that it said showed tanks, infantry fighting vehicles and self-propelled artillery units leaving the Crimean Peninsula, which Moscow seized from Ukraine in 2014.
The Kremlin said NATO’s assessment was wrong. Moscow’s ambassador to Ireland said forces in western Russia would be back to their normal positions within three to four weeks.
U.S. President Joe Biden said on Tuesday that more than 150,000 Russian troops were still amassed near Ukraine’s borders and an invasion remained “distinctly possible”. He said Washington had not yet verified any pullout.
The forecast in South American this morning is back to hotter. The temp maps have brought back the dome again this morning. It’s been increasing and decreasing every other day since last Friday. La Nina is still around, more centered in Southern Brazil than Argentina. The second crop corn in Brazil is going to need a significant change to wetter weather, otherwise they look to sustain crop losses too. Argentina, we see some rain in the South, where the North will be mostly dry.
Have a Safe Day!
Garry Gard
920-348-6844
February 15, 2022
Good morning,
Markets are getting hit hard this morning with corn down 18, soybeans down 10 and wheat down 22.
Russia said on Tuesday some of its military units were returning to their bases after exercises near Ukraine and mocked repeated Western warnings about a looming invasion, but NATO said it had yet to see any sign of de-escalation on the ground.
Russia did not say how many units were being withdrawn, and how far, after a build-up of some 130,000 Russian troops to the north, east and south of Ukraine that has triggered one of the worst crises in relations with the West since the Cold War.
NATO’s chief welcomed signals from Russia in the past two days that it may be looking for a diplomatic solution but urged Moscow to demonstrate its will to act.
A USDA attaché in Brasilia estimated 2021/22 Brazilian soybean production at 134.5 MMT, actually above the USDA’s 134.0 MMT Feb figure, with exports seen at 86.8 MMT, below the 90.5 MMT Feb WASDE number.
The forecast in South America is a lot cooler this morning. The hot air mass has lessened overnight in both of the maps, see below. Storms moved through Northern Brazil overnight with totals of .25-2 inches. Southern Brazil and Argentina saw no rain, and none is forecast over the 10 days. The 11–15-day forecast is moving to wetter and shows that a pattern change in in the making for Argentina to much wetter.
There is really nothing in these markets that can be seen as strength, weakness or stability. With Funds building longs and so many unknowns being traded that are not fundamentally in the markets right now there is risk to the upside and downside. Buy on the dips and sell on the rallies is the best course of action.
Have a Safe Day!
Garry Gard
920-348-6844
February 11, 2022
Good morning,
Corn is currently up 6 and soybeans are up 18 to start the day.
Corn futures went from 16 higher ot 8 lower yesterday showed the uncertainty of corn demand at these price levels. Exports are slow and US ethanol demand is not a real strong driving force for prices at these levels. Soybeans saw a similar selloff as they were trading 38 higher and closed 21 lower on the day. We broke thru resistance levels and set new highs in both commodities but failed to maintain.
Argentina’s Buenos Aires Grains Exchange yesterday cut their 2021/22 corn production estimate from 57 to 51 MMT; the Rosario Exchange last month reduced their own number from 56 to 48 MMT and is warning of further potential cuts due to low early yields and ongoing dryness. The Rosario Exchange warned of a possible soybean disaster on par with 2018 due to continue La Nina conditions, with their estimate down sharply last month to 40.5 MMT, compared to a 38 MMT harvest in 2018. The B.A. Exchange has ’21/22 soybeans pegged at 42.0 MMT, down two million tonnes last week.
The Biden Administration announced it would not be using the enforcement measures of the Phase1 deal and was instead building “a coalition to show a united front against China”. A relatively unspecific response after the Administration showed ire in the fact the deal was not being honored in its eyes. The expected cancellation of corn by China showed up in the Export Sales report today, along with 145 tmt of unknown, it cut the total net sales for the week to 589 tmt, which was very near to the bottom of expectation and nearly 1/3 the volume of a year ago on the same week.
Have a Safe Day!
Garry Gard
920-348-6844
