Good morning,


Weak follow thru in the markets this morning with corn down 6, soybeans down 4 and wheat down 20.


Today marks the one-year anniversary of the Russian war with Ukraine.  One year ago today, Russian tanks rolled into Ukraine and escalated a conflict in the region that had been ongoing for years.  On this somber anniversary, the US has announced new military support for Ukraine and sanctions against Russia.  Ukrainian President Zelenskyy praised his “invincible” country and vowed to continue the fight.
It is important to note on this anniversary that world wheat prices today are well below the levels they were at when the war started a year ago.  This is shocking considering the conflict is between two of the world’s most important wheat exporters.  Wheat prices shot up following the start of the conflict, but its been a long and eventful year and the war has not created the global shortage of wheat that many feared.  In fact, Russia is expected to export a record amount of wheat this year.  In addition, the Ukraine grain export corridor was reopened in July, and Black Sea wheat exports this crop year is expected to be at or above record numbers.  All of this is amazing considering what most feared would happen because of the fighting that began one year ago today.
This morning, soybean prices are lower as the market considers a smaller Argentine bean crop.  Yesterday, the Buenos Aries Grain Exchange reduced their estimate of the crop to 33.5 MMTs.  This is down considerably from their initial call for 48 MMTs.   The BAGE dropped its crop rating to a record low 3 percent.  Argentina is the world’s largest soymeal exporter and will be forced to import beans from Brazil this year.
Yesterdays Ag Outlook Forum painted the “perfect” picture for what we could see this coming year. Keep in mind that the acres are estimated guesses and not based on surveys and that the yield is trendline. 181.5 may be a reach, but with today’s technology and good weather they are attainable. Acres are probably in line based on economics and the acres we had last year.


Acres Planted (mil acres) 91.0
Acres Harvested 83.1
Yield (bu/acre) 181.5
Production (mil bu) 15,085
Beginning Stocks 1,267
Imports 25
Supply 16,377
Domestic Use (food, seed, industrial, ethanol) 12,290
Exports 2,200
Total Use 14,490
Ending Stocks 1,887
Stocks/Use Ratio 13.0


The markets have been stuck in a neutral pattern for the last few months, but have definitely turned bearish the last two days. We have thrown all kinds of bullish news at the markets and it has failed to move higher. Despite a lower Argentina crop projection, War in Ukraine, political battles, this market ultimately comes down to supply and demand. Unfortunately for the US, the demand side of the equation is getting worse vs. better. Within the next few months the focus will shift solely to new crop stocks and the early indications for that are significantly higher than they were in 2022. Yesterdays Ag Outlook Forum numbers may be the high point of the season, but we will have to take a lot off of them to concern the market.


Have a Safe Day!


Garry Gard