Free Commentary

After this week, we will discontinue publishing Free Commentary, moving only to a subscription-based service.  If you would like to continue receiving this information, along with the technical commentary and the very popular weekly newsletter, please click here to subscribe


While literally just scratching the surface, the Ag Ministry in Ukraine reports that planting is underway south of Odessa, which is a region that has largely been spared during the current invasion.  Thirty thousand hectares were estimated to have been plated by the 22nd of this month, which amounts to around 4% of what is expected.  Farmers in that region are estimated to have 80% of the seeds needed to move ahead but only 46% of fuel.  Normally, planting would kick into gear at the end of March/early April, but of course, this is anything but a normal year.

The European Union is reportedly re-thinking its sustainable farming strategy to try and boost as much production as possible from its members this year.  French President Macron stated that the current strategy was “based on a pre-Ukraine war world.” Precisely what this may entail is just to be agreed upon, but there is discussion of allowing planting on ground that has been intentionally left fallow.  The Union has already announced an additional 500 million euros will be made available to assist farmers.  Could this finally be the stimulus to open genetically modified crops to Europe?  That may be a bridge too far for those consumers.  Of course, increasing the area planted could help address the shortfall in Ukraine production this year, but obtaining fertilizer could temper the output.  According to Rabobank, Russia accounts for 22% of the global exports of ammonia, 14% of the urea, and 14% of phosphate.

Weekly export sales for corn and wheat were in line with expectations, but the bean numbers were a letdown for both old and new crops.  For the week ending March 17th, we sold 412,200 MT or 15.1 million bushels for the current crop year.  This was 67% below last week and 70% below the 4-week average.  The top sales were to Algeria with 84k MT, Egypt at 76.5k, and Mexico taking 75.1k.  China purchased another 32.5k MT, and there were reductions of 57.7k by unknown destinations.  Even more disappointing, though, were the sales for the 2022/23 crop year, which came in at just 13k MT or 478k bushels, which were all to China. There was a sale of 318,200 MT to unknown destinations for the current crop year reported in the daily system, which was anticipated. I would point out that meal sales jumped nicely last week.  Current crop year corn sales slide down to 979,500 MT or 38.6 million bushels.  This was 47% below the previous week and 29% below the 4-week average.  Mexico was the top buyer with 265.3k MT, followed by Colombia, taking 153.9k, and then South Korea in for 127.2k.  Sales for 2022/23 were a paltry 6,100 MT or 240k bushels.  Wheat was the only one to see a week-over-week increase, and for the current marketing year, we sold 155,700 MT or 5.7 million bushels.  While this was 7% higher than the prior week, it was still 51% below the 4-week average.  Things were a bit more active for the 2022/23 season, though, with sales of 367,300 MT or 13.5 million bushels.  Unknown destinations were the top purchaser with 142.2k MT, followed by Colombia with 69.7k and Nigeria taking 46k.  I would be premature to draw any conclusions from this week’s figures, but it could hint that the panic buying came in the first week following the invasion.  Beef sales surged by 40% last week, coming through at 27,500 MT and setting a marketing-year high, while pork sales slipped 39% to 23,200 MT.

On the domestic economic front, news has generally been positive this morning.  The KC Fed March Manufacturing Composite Index came in at +37.0, compared with last month at +29 and the expected +26.5.  The Manufacturing Activity Index registered a +46.0, up from +31 in February.  The weekly Initial Jobless Claims were also released, and for the week ending the 19th, it dropped 28,000 to 187,000.  Economists were expecting a decline of just 4,000.  I believe this is the lowest number of new claims since December of 1973.