USDA Prospective Planting report shakes up grain futures

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USDA Prospective Planting report shakes up grain futures

Soybeans closed sharply lower following USDA’s Prospective Planting report. USDA expects a four percent increase for soybean acreage this year which would be a record 91 million acres for the crop. Soybean oil and meal have been driving the market lately watching volatility across global oil markets and demand uncertainty on the soybean meal front. Crude oil closed sharply lower, adding downward pressure for soybean oil. There remains the potential for elevated demand if Ukraine is unable to produce much of a sunflower crop, creating a lack of sunflower oil in the global market. Soybean export sales were up on the week and have been supportive with recent sales to China, Mexico and unknown destinations. The market is keeping an eye on COVID related lockdowns in China, including its largest city of Shanghai, with fears of product not moving through crush facilities. May soybeans closed 45 and 3/4 cents lower at $16.18 and 1/4, July soybeans ended the day down 44 and 1/2 cents lower at $15.98, May soybean meal closed $5.60 lower at $467.50, and soybean oil traded sharply lower Thursday – down 228 points at $69.94.

Corn futures are sharply higher at midday with USDA estimating a four percent drop in corn acreage this growing season, expecting 89.5 million corn acres. The market continues to watch conflict in the Black Sea region after sour peace talks between Russia and Ukraine earlier this week. Ethanol production has been a positive driver for corn futures. A 35 percent drop for corn sales last week is a limiting factor in the market. Nearby futures shot up nearly 30 cents shortly after USDA’s report came out at 11:00 Central before losing some of that momentum before the close. Rains moving through the Eastern and parts of the Western Cornbelt could delay fieldwork and early planting in certain areas. Corn futures are also watching South America’s second crop corn – the safrinha crop. Brazil’s crop is still poorly early in the planting cycle, but recent rains could improve its quality. May corn futures closed 10 and 3/4 cents higher finishing the day at $7.48 and 3/4, and July corn finished the day 13 cents higher at $7.33.

The wheat complex is widely mixed in afternoon trading. Nearby Chicago and Kansas City contracts are trading within five cents of either side of the open after USDA’s Prospective Planting report shows slightly higher wheat acreage over last year. But Minneapolis wheat is sharply higher with hard red spring wheat gaining upward momentum from an expected acreage decrease of 200,000 this growing season. Wheat export sales dropped 39 percent compared to last week. May Chicago closed 21 and 1/4 cents lower after trading sideways most of the day to finish at $10.06, May Kansas City also closed sharply lower after staying near the open until it approached the close – losing 14 and 3/4 cents finishing at $10.29 and 3/4. May Minnesota wheat futures were the lone bright spot for the wheat complex, gaining 21 and 1/2 cents to close at $10.79 and 1/2.