It was on this date in 1983, while speaking to an Evangelical group in Florida, that then-President Ronald Regan referred to the Soviet Union as the Evil Empire. While official names may be different today, about all you can say is that the more things change, the more they stay the same. I might also point out that this is the 105th anniversary of the February Revolution in Russia which eventually overthrew Nicholas II. (Russia used a Julian calendar instead of a Gregorian, hence the reason for the differences in the month) Food scarcity is often blamed for the beginning of the riots, but many historians point the finger at the disastrous after-effects from the involvement in the First World War.
This morning, President Biden is proposing to ban all energy imports from Russia into the United States, which is only appropriate as paying them for anything is akin to helping them fund their aggression. In the grand scheme of things, though, we receive less than 10% of our energy resources from that country. Europe is far more dependent on Russian supplies, and while they may be in agreement in principle in stopping imports, as a practical matter, it is unlikely to happen.
With the war in Ukraine occupying the headlines and daily focus of the markets, South America has been pushed to the back pages, but of course, life and crops continue to move ahead down there. The overall weather has improved significantly, and damage is irreversible for many crops, not for all, and particularly not for the safrinha corn. It is estimated that this second corn crop is now 81% planted, which is 27% ahead of the pace last year. The first crop is now 45% harvested. Dr. Cordonnier kept his estimate for the total crop unchanged at 112 MMT. Soybean harvest is estimated to be 55% complete, a full 20% ahead of last year. In Argentina, the first planted corn is now estimated to be 51% mature and 10% harvested. 45% of the early planted beans are filling pods, with 9% mature. Dr. Cordonnier left the estimate for these crops unchanged at 49 MMT and 39 MMT, respectively, for corn and beans.
While I do not imagine the March supply/demand report will offer us too many fireworks, it will be issued in just a couple of hours from now. Here again, are the trade estimates; domestic ending stocks for corn, 1.479 billion bushels, beans 278 million, and wheat 628 million. The average estimates for Brazilian crops have beans at 129 MMT and corn at 113, and for Argentina, 43.4 MMT of beans and 52 MMT corn. Once we are through this report, the focus can shift to the quarterly grain stocks and Prospective planting reports scheduled for the 31st.
Plenty of excitement in the Marco trade this morning. Equities tried to rally early but have since turned lower again, with all the major indexes now in bear territory. The dollar is under pressure but still at the highest levels in nearly two years. Notes and bonds are under solid pressure this morning, but this is after quite a rebound last week, and energies are screaming higher again this morning. Gold is sharply higher this morning, and we have now moved to within striking distance of the record high set in 2020 at $2063.
