Cargill pulls operations out of Russia.
Another mixed-price evening turned into a firm morning, with wheat prices sharply higher again. Adverse weather that is inflicting the Plains, along with the never-ending Northern Plains winter, has caught a bid this week.
Cargill announced it would be leaving the Russian ag export space this morning. While it’s uncertain whether this will impact the total volume of grain shipped from Russia for 22/23, a Russian entity is anticipated to take over Cargill’s supply lines. Still, during the transition, a potential slowing of forward cash business in Russia has supported wheat prices in Europe/Australia, allowing US values to lift in addition to the HRW wheat drought problems.
The drought in the Plains has endured to the point where a drop of 10-20% below trend yields is starting to become a reality, plus row crop planting in this area will be affected if soil moisture does not return in the next 30-45 days. The EU model overnight added rainfall potential of .50-1.50” in parts of TX/OK panhandles, but widespread soaking rains remain absent, with 10 days of complete dryness for KS, E CO, and southern NE. Snow cover in the Northern Plains is still anticipated over the next 7-10 days.
This Friday’s NASS crop report is known for its volatility, and with such a wide range of anticipated corn seeding intentions, trendline yields could produce a production swing of 750 Mil Bu. Even though soybeans have a narrow range of 87-89.5 Mil acres, outliers have acres much below that range. An explosive price lift in row crops will offer new sales opportunities in April.
Cattle futures continued higher yesterday in a more subdued trade than Monday, with a firm outlook anticipated this morning. Asking prices this week for cattle are in the $165-166 range in the South which would be $2-3 from last week. It’s anticipated that some cash trade could start today. Box beef values had choice gaining $0.27, and select was higher by $0.64. It’s anticipated that April live cattle could be heading to new contract highs into expiration which has been typical for the last several delivery periods.