Good morning!
Grains firmer to open the week... Corn, soybean and wheat futures rebounded from last week’s losses in overnight. As of 6:30 a.m. CT, corn futures are trading 6 to 11 cents higher, soybeans are 7 to 11 cents higher, winter wheat futures are 10 to 15 cents higher and spring wheat is mostly 9 to 11 cents higher. Front-month U.S. crude oil futures are around 50 cents higher and the U.S. dollar index is more than 200 points higher this morning.
Russia/Ukraine update... Ukraine demanded new sanctions from major Western powers over what it called the Bucha “massacre.” Russia requested a U.N. Security Council meeting because of what Moscow called Kyiv’s attempts to disrupt peace talks and escalate violence with a “provocation” in Bucha. U.S. Secretary of State Antony Blinken called the scenes from Bucha “a punch to the gut” on CNN, though he declined to call them war crimes. He said the U.S. will collect evidence in Ukraine and make a judgment. European officials have openly began calling for new sanctions to be imposed as soon as Wednesday. Both Germany and France’s foreign ministers have already vowed to push for strengthened sanctions, citing the atrocities in Bucha, according to the Financial Times. Some U.S. officials talked about “secondary sanctions” ahead.
Ukraine sees 2022 spring sowing area down 21% from last year... Projected areas planted to spring crops in Ukraine will probably total 13.4 million hectares this year, about 21% less than in 2021, the country’s ag ministry said on its website. Planting has begun in 21 of 24 regions, not counting annexed Crimea. That’s more than this time last year due to favorable weather.
Lithuania the first EU country to end imports of Russian gas... Lithuanian authorities said that from April 1 they would no longer import Russian gas but instead rely on liquefied natural gas from their terminal called Independence. “From now on Lithuania won’t be consuming a cubic cm of toxic Russian gas. Lithuania is the first EU country to refuse Russian gas import”, Ingrida Simonyte, Lithuania’s prime minister, wrote on Twitter on Sunday. Two other Baltic states are also temporarily stopping the flow of Russian gas . The three Baltic states have been among the loudest voices urging the EU to end its members’ dependence on Russian oil and gas as countries pay Moscow for petroleum even after its invasion of Ukraine.
Vilsack: Opening CRP land to crop production not a feasible option... In a letter to Mike Seyfert, President and CEO of the National Grain and Feed Association, USDA Secretary Tom Vilsack addressed why opening CRP land to crop production is not a viable option to ease global grain supply concerns amid the war in Ukraine. He said, “CRP acres are disproportionately non-prime cropland, with more than 75% of acres from less productive, non-prime farmland... Additionally, a considerable proportion of currently enrolled CRP acres are in areas experiencing significant levels of drought. Production on those acres would be marginal at best, and there is no realistic way to convert all CRP acres into cropland in 2022. Even under non-drought scenarios, we know from historic data that acres coming out of CRP have significant ‘slippage,’ meaning that one acre coming out of CRP does not transfer into an acre of crop production, but closer to half that... Importantly, it is critical to point out that if we allow the tillage of CRP acres, the marginal at best benefit to crop production will be coupled with a significant and detrimental impact on producers’ efforts to mitigate climate change and maintain the long-term health of their land... While it is clear that there are no significant short-term gains to be realized from opening the program to crop production, I want to emphasize that USDA will continue to monitor the crisis in Ukraine and its global reverberations. We are keeping in mind the flexibilities that can be exercised under CRP in the form of emergency haying and grazing, with protections in place to prevent permanent damage to the land or the cover should the situation demand such flexibilities be used.” USDA concluded a general CRP signup March 11, and Vilsack indicated the trend of re-enrolling acres may not be as strong this time relative to the 4 million acres under contracts that mature Sept. 30. While cautioning USDA is still sorting through the CRP offers, Vilsack said, “our data reflect the reality that, with higher commodity prices, producers are not re-enrolling all of these acres in CRP. Instead, high prices for this year’s crops will motivate producers to plant more acres of wheat, soybeans, and corn, with the main limiting factors being weather and soil moisture conditions.”
Crop progress/condition reports start this afternoon... USDA will release its first winter wheat crop condition ratings this afternoon. Based on individual state ratings, the “good” to “excellent” rating should be in the mid-30% range.
Kazakhstan may limit grain, flour exports... Kazakhstan is considering temporarily limiting grain and flour exports, according to the country’s ag minister, without giving any specifics. The minister says the country wants to ensure its domestic needs are covered before allowing exports.
The week ahead in Washington... Senate Judiciary Committee today will consider the nomination of Judge Ketanji Brown Jackson to the Supreme Court. Senators are looking to close a deal this week to reappropriate roughly $10 billion to pay for Covid-19 treatments and vaccines, with lawmakers saying they need to act quickly ahead of a possible resurgence of the pandemic. On the economic front, Wednesday’s release of the minutes of the last Fed monetary policy meeting will be watched closely for thinking on rate hikes and plans to shrink the Fed’s balance sheet. The highlight for agriculture will be Friday’s Supply & Demand Report.
More cases of bird flu reported... Iowa confirmed four new cases of highly pathogenic avian influenza (HPAI) in commercial poultry operations. The agency reported confirmed cases in commercial layer chickens in Osceola County, commercial turkeys in Cherokee County, commercial turkeys in Sac County and commercial breeding chickens in Humboldt County. There were no figures provided on the number of birds impacted, but industry contacts signal the Osceola County, Iowa, case involved more than 5 million birds. Meanwhile, USDA’s Animal and Plant Health Inspection Service confirmed HPAI in a commercial pheasant flock in Erath County, Texas.
Focus should shift to beef movement... Wholesale beef prices have been firming but retailer buying has been light. Grocers should start buying beef more aggressively as they begin planning and building inventories for beef features at the end of Lent and early in the grilling season.
Hogs likely to face more pressure... Spring- and summer-month hog futures posted weak technical closes last week, which suggests followthrough chart-based selling is likely early this week. Key will be whether funds actively liquidate long positions or if buyers show up under the market.
Weekend demand news... Saudi Arabia purchased 625,000 MT of optional origin wheat. Iraq purchased 100,000 MT of wheat expected to be sourced from Germany. Jordan tendered to buy 120,000 MT of optional origin milling wheat.
See ‘Policy Updates’ for late-breaking morning news updates... For updates to items in “First Thing Today” or any late-breaking morning news stories, check “Policy Updates” on www.profarmer.com.
Today’s reports
- 10:00 a.m. Export Inspections — AMS
- 3:00 p.m. Crop Progress — NASS