Commodity values continue to hold at historically high values with support coming from several different directions. Favorable processing margins and concerns over global production are two of the main ones, but so is acreage numbers. This is not just for this year’s plantings, but for what land will be available for U.S. production in years to come.

Given the amount of urban sprawl in the United States and the fact some acres are not suitable for row crops, the United States is limited in overall tillable acreage. By keeping futures elevated it may prevent slippage in plantings. This does not mean we will not see market pressure, but values may remain elevated long enough to encourage global production, especially in South America.

For the past several months, we have seen more interest on U.S. soybean balance sheets, but this attention is now shifting more toward the grain complex. This started with the Black Sea war and how it disrupted that region’s exports, as well as new crop production possibilities. The March planting intentions report brought the corn complex more interest as plantings are forecast to be well below last year and could easily put corn in a rationing situation. Weather conditions and delays to corn and spring wheat planting have added market uncertainty. Soybean balance sheets still need to be monitored though, as the stocks to use on that commodity remains very tight.

We are starting to see more interest on the spring planting season in the United States, which is a seasonal trend. It is well known that cool and wet conditions have slowed the start of the planting season on both corn and wheat. While plantings are not significantly delayed, the concern is what may happen to both acreage and yield potential if delays persist. There are also some concerns that what planting has taken place has been in unfavorable conditions and replants may be needed. This will likely put more emphasis on weekly condition reports for these crops when they start to be released.

The war between Ukraine and Russia appears to have no end in sight, and as it progresses, so does the impact it is having on the global market. Right now, the greatest attention is on the start of the spring planting season in Ukraine and how acres will likely be down. Another issue is the logistics problems the war is causing.

This has now started to affect vessels that have been loaded and sitting in Black Sea ports but cannot be moved. We are already hearing of quality issues in some of these loaded ships to a point where it may not be used for food purposes. The longer these vessels sit, the more quality will become an issue.

The start of the Ukraine War mostly halted that country’s exports, but we did see some movement. This was mostly by rail to other countries who were making exports on Ukraine’s behalf. As the war progressed, severe damage has been noted to the country’s port terminals and nearly all will need extensive repairs before loadings can take place. We are now seeing damage to Ukraine’s rail lines as Russian forces are focusing attacks on those targets, shutting off that means of exports as well. The question now is how the USDA will adjust Ukraine’s exports in future world balance sheet updates given these circumstances.

Country movement of farm stored inventory is again trailing off in the United States. This is not uncommon once the spring planting season gets underway. Farmers did increase movement when planting was initially delayed but now that many are getting back in the fields, movement has halted. We are again seeing buyers push for deliveries, especially on soybeans where crush margins remain quite positive. This is opening windows of selling opportunity in some regions of the interior market.

This slow movement is starting to impact the U.S. export program as well. Strong crush margins on soybeans have prevented selling into export channels. There are now reports that some buyers may not have enough coverage to fulfill export sales and will need to push bids to satisfy obligations. Issues with rail logistics in the United States are compounding this issue. As a result, some export buyers have shifted all interest away from the United States on old crop offers.

There is a well-defined two-sided story developing in the U.S. hog industry. Total U.S. pork exports are down 24 percent from last year at this time. This is mainly from China, who has taken 68 percent less pork as the country tries to support its domestic hog industry. Demand from all other sources is down as well, with 6 percent less usage being seen. Normally this would lead to sharply lower hog futures, but a nearly equal decrease in hog production is simply off-setting the slower demand pace.

RISK DISCLAIMER: The risk of loss in trading commodity futures and options is substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. The information contained in this report is believed to be reliable but is not guaranteed to accuracy or completeness by AgriVisor, LLC. This report is provided for informational purposes only and is not furnished for the purpose of, nor intended to be relied upon for specific trading in commodities herein named. This is not independent research and is provided as a service. As such, this is considered a solicitation.