3/16/2022

Over the prior 3 weeks, we have seen an absurd amount of money pumped into the grain trade by spec, investor, and managed sources.  A move that was put into motion by increased tensions between Russia and Ukraine and, ultimately, an armed conflict between the two.  Now with headlines reading there's a possibility of real peace between the countries, the risk premium put into the price of corn, soybeans, and wheat is evaporating.  Wheat front months are now anywhere from $2-3 off of their highs.  The highs we have set are likely the highs going forward through planting but that does not mean our long-term trends are in danger of reversing.  Current corn and soybean values are well above the 50-, 100-, and 200-day moving averages but remain a hefty premium after considering ending stocks.  More and more chatter around the market about the planting intentions report put out by the USDA at the end of the month.  Trade sentiment is leaning heavily towards decreased corn acres and increased soybean and wheat acres with what could be top-5 all-time acres numbers for both.  There were no USDA sale announcements this morning.  Weekly ethanol numbers showed output slowing 2,000 barrels/day to 1.03 mln bpd and stocks increasing 674,000 barrels to a 25.95-million-barrel total, a nearly 2-year high. 

We mentioned on Monday that corn was looking for direction and likely found it today, breaking lower out of some short term consolidation. Limit lower in all wheat classes today likely didn’t help.

Time was running out for soybeans to manufacture a close above 1700’0 and it looks like we won’t get there on this move. Time for a pull-back in commodities as most remain over bought.