3/25/2022

A firm finish higher in the markets to take into the weekend.  We get our first set of fundamentals to trade next week for the 2022 U.S. crop with some acres intentions with several thinking corn acres will be lost to soybeans and wheat.  Corn is still in the midst of a price rally going back to August 2020 so I can't imagine corn losing too many acres that are already established.  Corn is king.  The saying in politics is "never let a crisis go to waste" so with the ag industry trying to put a number to scale of the crop that Ukraine will get planted this year, seven agricultural lobby groups submitted a letter to Ag Secretary Tom Vilsack asking the USDA to open up four million acres of "prime" farm land currently enrolled in CRP without penalty.  If you are a farmer, you shouldn't be in favor of this.  Off the cuff numbers: a 1/3 of those acres into corn at average production would add over roughly 200 million bushels to our ending stocks, likely push seed, chemical, and fertilizer prices up another 10-15% or more, and wipe about $1.00/bushel value off of the board.  Result: current profit margins? -gone.  Brazil already looks to have a record second crop of corn coming with an extremely fast planting pace and ideal conditions to start.  Their soy production estimates have stabilized in the 120-127 mmt range and wouldn't be surprised to see those estimates begin to increase.  The USDA announced 132,000 tonnes of soybeans for delivery to China during the 2021/22 marketing year.