Home Farm Equipment Morning Market Review for October 8, 2021

Morning Market Review for October 8, 2021

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Plus – an evaluation on skyrocketing fertilizer costs for Fall 2021

  • Corn up 1-3 cents
  • Soybeans up 8-12 cents; Soymeal up $0.50/ton; Soyoil up $0.60/lb
  • Chicago & Kansas Metropolis wheat up 3-4 cents; Minneapolis wheat up 2-3 cents

*Costs as of seven:10am CDT.

Good Morning! How is harvest progressing in your farm? Inform us all about it! Click here to take our ongoing Feedback from the Field survey on 2021 crop situations to share your harvest progress (or searching plans!). Our Google Map, up to date each day, supplies all previous responses for farm readers, from farmers.

Inputs

USDA’s Illinois Division of Agricultural Market Information Service launched up to date bi-weekly retail prices for crop inputs throughout the state yesterday. Illinois is the nation’s largest soybean and second largest corn producer – a key client of fertilizer merchandise.

However not like earlier weeks, costs for all merchandise measured by the dataset skyrocketed over the previous two weeks. A mix of surging seasonal demand, tight world provides, and backlogs in manufacturing schedules proceed to drive costs larger. China took extra definitive motion over the previous two weeks in direction of proscribing its personal phosphate and urea exports in an effort to make sure home provides.

China is the world’s largest producer of phosphate. Few of its provides are exported to the U.S. However amid geopolitical discourse between the U.S., Russia, and Morocco, the worldwide prospects that buy 30% of China’s phosphate manufacturing at the moment are direct rivals with the U.S. for what dwindling phosphate provides stay out there throughout the remainder of the world.

And world commerce flows haven’t but recalibrated within the U.S.’s favor for the phosphate (the continued 2020 tariff dispute with Russia and Morocco), UAN (new this summer season – a tariff dispute with Russia and Trinidad and Tobago), and potash (the U.S. levied financial sanctions on the nation this yr following the federal government’s inhumane therapy of political dissenters).

Commerce rumors counsel that the U.S. has been reserving phosphate shipments from Russia and Morocco not too long ago, with patrons paying each nations for the tariffs merely to make sure enough provides.

An enormous world acreage growth sucked up what extra provides had been out there over the previous yr and manufacturing has not been capable of sustain. China will produce 5% extra corn and a pair of% extra soybeans this yr. Brazil is anticipated to plant 200 million acres of corn, soybeans, and cotton by 2030.

The U.S. barely planted 192 million acres of these three crops this yr. For corn and soybeans, that was a 4% acreage enhance from final yr.

However the chief driver of the blistering uptick in fertilizer costs has been the worldwide vitality crunch. On Wednesday, pure gasoline futures costs traded 33% larger than two weeks prior earlier than Russia introduced it could enhance manufacturing to stave off a whole vitality disaster for Europe. Wednesday’s excessive matched pure gasoline costs not seen since December 2008.

Pure gasoline futures have dropped $0.689/mmBTU (11%) since markets opened on Wednesday however stay at an eight and a half yr excessive. Pure gasoline is the first gas supply for fertilizer crops internationally and is a key ingredient in anhydrous ammonia manufacturing, so its rally amid dwindling world vitality reserves is having noticeable impacts on the farmgate.

Yesterday’s report from the Illinois USDA reveals staggering will increase for all fertilizer merchandise used throughout the Corn Belt, as illustrated beneath. The worth index for the bundle now stands over double of costs from final yr.

Most notably, anhydrous costs are quoted 97% larger than the identical time a yr in the past when world provides had been plentiful. Urea costs noticed the biggest weekly bounce this week on China’s export restrictions. UAN costs are twice the value of a yr in the past because the nitrogen complicated bears the brunt of the current pure gasoline value rally.

Phosphate costs have greater than doubled prior to now yr. And dwindling potash provides amid geopolitical tensions with Belarus have despatched farmgate costs in Illinois 2.2 occasions larger than costs this time final yr. In actual fact, since July 1, potash costs have risen 55%.

Illinois bi-weekly retail production costs chart.PNG

Farm Futures Contributing analyst Bryce Knorr predicts these will increase may erode as much as $0.35/bushel from 2022 working margins. Ongoing provide chain points are more likely to stop enter costs from abating anytime quickly. Fertilizer manufacturing slowed within the Gulf over the previous month after Hurricane Ida knocked energy out at many processing services. And pandemic-induced closures at fertilizer crops internationally this yr has restricted world

USDA discovered extra 2020/21 crop corn and soybean provides in final week’s Quarterly Shares report. And with rising possibilities of larger 2021 corn and soybean yields, the swelling provide forecast may place a ceiling on 2022 income expectations after subsequent week’s WASDE report.

Paired with this newest sharp rise in enter prices, working margins on the farmgate will possible be pressured as fall utility season ramps up. Should you haven’t spoken to your ag retailer about 2022 enter provides, I might suggest doing so quickly. After which name your dealer to ebook 2022 gross sales to pay for it earlier than Tuesday’s WASDE report.

Corn

Regardless of looming strain from rising harvested provides, corn futures inched $0.01-$0.02/bushel larger this morning as studies that China’s bigger corn crop anticipated this fall may face high quality points on account of heavy rains throughout harvest.

Heavy rains have blanketed Northern China over the previous two weeks, the place a lot of the nation’s corn crop is produced. Harvest was slated to start out within the area earlier this week however is now delayed as a result of deluge. Farther south, corn harvest actions proceed to stall as farmers scramble to pump out fields, discover higher tools for the moist situations, and consider high quality losses.

“Generally speaking it will still be a bumper harvest, but the rain affects the harvest pace and the quality. With too much rain, farmers can’t dry freshly harvested corn and it will cause high toxin levels,” Rosa Wang, an analyst with Shanghai JC Intelligence Co Ltd., instructed Reuters this morning.

China’s vitality crunch has additionally restricted coal provides out there to assist dry bushels within the coming weeks. Silage provides may be impacted because the moist climate rots crop roots and the stalks change into too dry to cut for livestock feed.

It’s not excellent news for Chinese language farmers, nevertheless it will increase the probability that China will proceed shopping for U.S. grains at a speedy charge this yr.

Soybeans

Yesterday’s weekly Export Gross sales report from USDA pointed to sturdy weekly transport volumes for U.S. soybeans as peak export season takes off. Futures markets rewarded the information, rising $0.08-$0.12/bushel in a single day. Tight world edible oil shares proceed to prop up positive factors within the soy complicated, with soyoil futures rising $0.66/lb in a single day.

Wheat

A weaker greenback and robust worldwide demand from prime world importers this week helped prop up U.S. wheat costs this morning. The complicated was on observe to open $0.02-$0.04/bushel larger finally look.

Climate

Rain showers will blanket a lot of the Nice Lakes and Japanese Corn Belt areas right this moment, hovering primarily over the Nice Lakes states by this night, in accordance with NOAA’s short-range forecasts. The system will drop as much as an inch of precipitation on the area within the subsequent 24 hours.

A storm system creating within the Central Rockies is more likely to shift rain into the Northern Plains and Higher Midwest late tonight. The areas will possible see rain by Sunday night, which can stop corn and soybean harvesting and winter wheat planting exercise all weekend.

Financials

Coronavirus circumstances within the U.S. rose to 44,160,455 circumstances as of this morning in accordance with the Johns Hopkins Coronavirus Resource Center. Whereas caseloads stay excessive, they’re more and more declining as vaccination and immunity charges enhance. The loss of life toll elevated to 710,185 deaths as of press time.

In accordance with the CDC, precisely 78% of U.S. adults have obtained a minimum of one COVID-19 vaccine as office mandates assist enhance immunity charges. Practically 187 million People (56%) are absolutely vaccinated. Over 6.4 billion vaccine doses have been administered worldwide.

U.S. inventory markets had been combined forward of right this moment’s month-to-month jobs report with worries about future financial easing insurance policies from the U.S. Federal Reserve underscoring dealer sentiment. S&P 500 futures inched up 0.10% to $4,394.25 in anticipation of the report.

























































Morning Ag Commodity Costs – 10/8/2021
Contract Items Excessive Low Final Internet Change % Change
DEC ’21 CORN $ / BSH  5.3875 5.33 5.3575 0.0175 0.33%
MAR ’22 CORN $ / BSH  5.475 5.42 5.4475 0.0175 0.32%
MAY ’22 CORN $ / BSH  5.525 5.4675 5.5 0.02 0.36%
JUL ’22 CORN $ / BSH  5.525 5.4725 5.5025 0.0175 0.32%
SEP ’22 CORN $ / BSH  5.3425 5.3025 5.33 0.015 0.28%
DEC ’22 CORN $ / BSH  5.295 5.26 5.275 0 0.00%
MAR ’23 CORN $ / BSH  5.345 5.3225 5.345 0.01 0.19%
NOV ’21 SOYBEANS $ / BSH  12.625 12.4525 12.565 0.0925 0.74%
JAN ’22 SOYBEANS $ / BSH  12.7375 12.5625 12.6775 0.095 0.76%
MAR ’22 SOYBEANS $ / BSH  12.8325 12.6525 12.775 0.1025 0.81%
MAY ’22 SOYBEANS $ / BSH  12.9225 12.7425 12.87 0.11 0.86%
JUL ’22 SOYBEANS $ / BSH  12.97 12.795 12.92 0.105 0.82%
AUG ’22 SOYBEANS $ / BSH  12.915 12.775 12.8875 0.105 0.82%
SEP ’22 SOYBEANS $ / BSH  12.7 12.625 12.7 0.0975 0.77%
NOV ’22 SOYBEANS $ / BSH  12.6525 12.515 12.6125 0.0725 0.58%
JAN ’23 SOYBEANS $ / BSH  12.65 12.5325 12.6325 0.08 0.64%
OCT ’21 SOYBEAN OIL  $ / LB 0 #N/A 61.9 0 0.00%
DEC ’21 SOYBEAN OIL  $ / LB 62.78 61.79 62.68 0.62 1.00%
OCT ’21 SOY MEAL $ / TON 318.9 318.9 318.9 0.1 0.03%
DEC ’21 SOY MEAL $ / TON 321.6 318.9 319.7 0.4 0.13%
JAN ’22 SOY MEAL $ / TON 323.7 321 321.8 0.4 0.12%
MAR ’22 SOY MEAL $ / TON 326.8 324.1 325.1 0.6 0.18%
MAY ’22 SOY MEAL $ / TON 331 328.3 329.6 0.8 0.24%
DEC ’21 Chicago SRW $ / BSH  7.455 7.38 7.43 0.0175 0.24%
MAR ’22 Chicago SRW $ / BSH  7.59 7.52 7.565 0.0175 0.23%
MAY ’22 Chicago SRW $ / BSH  7.625 7.5625 7.605 0.02 0.26%
JUL ’22 Chicago SRW $ / BSH  7.48 7.43 7.4625 0.0175 0.24%
SEP ’22 Chicago SRW $ / BSH  7.49 7.45 7.4825 0.0225 0.30%
DEC ’21 Kansas Metropolis HRW $ / BSH  7.465 7.39 7.445 0.0325 0.44%
MAR ’22 Kansas Metropolis HRW $ / BSH  7.545 7.4675 7.5275 0.0325 0.43%
MAY ’22 Kansas Metropolis HRW $ / BSH  7.5725 7.5 7.5525 0.03 0.40%
JUL ’22 Kansas Metropolis HRW $ / BSH  7.49 7.415 7.475 0.0275 0.37%
SEP ’22 Kansas Metropolis HRW $ / BSH  7.4625 7.4625 7.4625 -0.0125 -0.17%
DEC ’21 MLPS Spring Wheat $ / BSH  9.4575 9.4 9.4525 0.03 0.32%
MAR ’22 MLPS Spring Wheat $ / BSH  9.34 9.31 9.34 0.0275 0.30%
MAY ’22 MLPS Spring Wheat $ / BSH  9.2 9.175 9.2 0.0325 0.35%
JUL ’22 MLPS Spring Wheat $ / BSH  9.0125 #N/A 9.0025 0 0.00%
SEP ’22 MLPS Spring Wheat $ / BSH  8.215 #N/A 8.205 0 0.00%
DEC ’21 ICE Greenback Index $ 94.345 94.135 94.165 -0.056 -0.06%
 NO ’21 Gentle Crude $ / BBL  79.66 78.63 78.78 0.48 0.61%
 DE ’21 Gentle Crude $ / BBL  79.29 78.25 78.4 0.44 0.56%
NOV ’21 ULS Diesel $ /U GAL 2.495 2.4635 2.4687 0.0091 0.37%
DEC ’21 ULS Diesel $ /U GAL 2.4875 2.4559 2.4612 0.0089 0.36%
NOV ’21 Gasoline $ /U GAL 2.365 2.3364 2.3449 0.0105 0.45%
DEC ’21 Gasoline $ /U GAL 2.3166 2.2903 2.2963 0.0098 0.43%
OCT ’21 Feeder Cattle $ / CWT 0 #N/A 160.35 0 0.00%
NOV ’21 Feeder Cattle $ / CWT 0 #N/A 161.6 0 0.00%
 OC ’21 Dwell Cattle $ / CWT 0 #N/A 125.275 0 0.00%
 DE ’21 Dwell Cattle $ / CWT 0 #N/A 130.1 0 0.00%
OCT ’21 Dwell Hogs $ / CWT 0 #N/A 89.85 0 0.00%
DEC ’21 Dwell Hogs $ / CWT 0 #N/A 82.025 0 0.00%
OCT ’21 Class III Milk $ / CWT 18.04 18.04 18.04 0.01 0.06%
NOV ’21 Class III Milk $ / CWT 18.78 18.66 18.78 0.04 0.21%
DEC ’21 Class III Milk $ / CWT 18.27 #N/A 18.27 0 0.00%

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