Russia

Grains Fall on Profit Taking, Lack of News: Cattle Up With New NWS Case

Wed, 03 Dec 2025 21:04:29 GMT

Grains ended lower on Wednesday with livestock higher.

Soybeans Fall on Lack of New China Sales
Soybeans ended lower for a third day as flash sales to China have been absent every day this week. There were overnight rumors of five cargoes being sold to China and Bloomberg reported six loads of soybeans were being loaded for shipment out of Gulf port terminals in the next several weeks carrying at least 320,000 metric tons of soybeans to China.. However, the market remains disappointed according to Vince Boddicker with Farmers Trading Company. He says every day that goes by without big sales to China or the signing of the trade pact and confirmation they will be buying the full 12 MMT means the market will drift lower.

U.S. Treasury Secretary Scott Bessent indicated he was very optimistic about the U.S. economy next year and reported that China was on track to complete its commitments under a U.S.-China trade agreement, including the purchase of 12 MMT of soybeans, which he said would be finished by the end of February 2026.

Soybeans Confirming a Top?
Boddicker says soybeans are confirming the November highs just under $11.70 on the January contract may be the highs for the time being unless there is a massive change in China’s buying program or a South American weather problem. Soybeans are still holding support but Boddicker says last week’s lows need to hold or the market could take a big leg lower.

Corn and Wheat See Profit Taking
Boddicker says corn and wheat saw profit taking with no new geopolitical threats to push the market higher or additional buying. He says the corn market is also suffering from the lack of fresh bullish news. While the export sales reports have been on record pace but with the reports lagging that isn’t providing the push needed to rally the market.

Cattle Make New Highs for the Move with NWS Case
Cattle futures made new highs for the move in both live and feeder cattle offerings. Boddicker says a combination of factors came together to push the market higher. Some of it is technical buying as the market got oversold and bounced off of key long term support areas last Tuesday. However, there is talk of higher cash this week and there was another case of New World Screwworm reported 120 miles from the U.S. border. That is giving the market fresh hope the border will stay closed for a while longer to Mexican feeder cattle imports.

Bottoming Action?
Boddicker says the technical action may be confirming a low in the cattle market but he thinks its unlikely the futures will retest the record highs. Instead he is looking for a 62% retracement of the correction from high to low. He doesn’t think the futures will fill the gap areas that were left above those levels on the charts because the funds are not in the market to help push back that high.

Hogs End Higher
Lean hog futures were also higher on Wednesday on a combination of short covering and the higher cattle market likely helped. Seasonally the cash market starts to bottom in this time frame and the futures may also be anticipating that. However, Boddicker says the funds have shed a good chunk of their length in that market so just like cattle he isn’t sure how much upside there is in the market.

Grains Fall on Profit Taking, No China Sales: What's Ahead Crude Oil and the Dollar?

Wed, 03 Dec 2025 16:20:56 GMT

Grains lower early Wednesday, livestock mixed.

Corn and Wheat See Profit Taking
Corn and wheat futures were lower early Wednesday seeing some profit taking after a higher close Tuesday says Darin Newsom, senior market analyst with Barchart. Corn and wheat added some risk premium Tuesday due to increasing tensions between Russia and Ukraine but will no additional geopolitical headlines the market set back. “Yeah, that and just the realization that geopolitics haven’t changed and the fundamentals haven’t changed in the markets,” he explains.

Corn Stuck With Big Demand But Big Crop
March corn was able to close above the 200-day moving average Tuesday but is back trading below it again on Wednesday with no concern about upfront supplies. Newsom says the corn market has been stuck in a trading range with record demand but also record supplies and that is also keeping a lid on the basis market currently.

“So that is keeping a lid on any big rallies in the market. “You know, bin doors are going to stay tight. There’s not going to be a lot of bushels moving to town. And if we can somehow keep a solid demand underneath the market, you know, we can see that in the May July spread. I think it’s covering something like 24, 25 percent calculated full commercial carry at yesterday’s close. So, I mean, and that’s a bullish level. If demand can stay strong, mostly on exports, but possibly also see an uptick and feed demand, I think that’ll be what keeps kind of a floor underneath this market,” he says.

More Concern About 2026 Corn Supplies
Newsom says the market is actually showing more concerns about 2026 supplies with possibly less U.S. corn acres being planted. “To me, there is still some concern about U.S. supplies as we look out towards next planting season for the U .S. for the 2026 crop, Not that the U.S. is going to run out of corn anytime soon, but available supplies might tighten up during the next planting season.”

Soybeans Drift With No China Sales Confirmed
There was talk overnight of more soybean sales to China as bids firmed nearly a dime in the Pacific Northwest. However, there was no confirmation in the form of flash sales Wednesday morning for a third day in a row. The bulls need to be fed daily and without that news the futures drifted back lower.

“We see what looks to be commercial activity overnight, and then nothing happens over the course of the day, for the most part. And so this tells us that there could be some Chinese business going on. The question is, is it just on the future side or is there some physical bushels being bought? My guess is there’s probably a few. Again, the U.S. is a secondary supplier. This is the time of year when US tends to make its sales. So the fact that we’re seeing a little bit of a bump in the PNW basis, again, not overly surprising. There are supplies across the Northern Plains. That’s where the U.S. basis tends to be the weakest. And so they’re moving to port and they’ll probably start moving over to China here in the not too distant future,” he explains.

China Buying Under the Radar
Newsom thinks though that if China is buying, they are likely securing smaller amounts of soybeans so the sales will go undetected as part of the daily flash export reports. “It doesn’t mean isn’t happening. It just means that it’s below reportable levels. And at some point, when the weekly export sales and shipments numbers ever get caught up, then we might actually see that there was some seasonal business being done.”

Markets Await FOMC Rate Cut
The markets are awaiting next week’s FOMC meeting where a 25-basis point cut in interest rates is expected. Newsom says this would likely pressure the dollar and be good news for agricultural commodities as it would make them more competitive on the world market place.

FOMC: New Sheriff in Town?
The financial markets have been trading mostly higher recently in anticipation of the Fed lowering interest rates but also with the anticipated change in leadership in 2026. President Trump is expected to nominate Kevin Hassett to head the FOMC which Newsom says would likely provide an open path for more interest rate cuts in the future.

Where is Crude Oil Headed?
Crude oil has been caught between the growing tensions between the U.S. and Venezuela and the possibility of peace in the Black Sea which would lower sanctions on Russian oil. Plus, OPEC plus has decided to leave production steady in the near future. As a result the crude oil market is still under $60 a barrel and Newsom says that plays right into the goal of the administration to lower energy prices to curb inflation.

Biden Administration Fuel Economy Standards Rolled Back
Newsom says the Trump administration is also set to roll back the Biden era fuel economy standards. He says this could have an impact on the silver market as less electric vehicles would stall the buying interest in that market due to lower demand. However, this change could also impact the biofuels markets with a push for more fossil fuels and less ethanol and other renewable energy policy support.

Corn, Wheat Rally on Geopolitical Concerns: Cattle Soar

Tue, 02 Dec 2025 21:28:42 GMT

Corn and wheat end higher Tuesday with soybeans lower. Cattle soar, while hogs end mostly lower.

Wheat Rallies on Geopolitical Tensions
Wheat futures rallied on Tuesday, reversing and bouncing off of new lows for the move. Darren Frye with Water Street Solutions says the wheat market, and to some degree corn, was adding some geopolitical risk premium with tensions rising in the Black Sea region. This includes a threat from Russia’s Putin about retaliating on Ukraine vessels and shipping facilities as well as tankers of countries that are helping Ukraine. The funds are still short in all three classes of wheat and as a result the reversal resulted in some short covering.

“Wheat has been lagging but today, we saw a bullish engulfing day on the candlestick charts. We saw a reversal. And I think it has to do with all the rhetoric around Putin and Europe, Secretary Rubio not going to the NATO meeting. Peace talks are supposed to be happening while tankers are getting sunk. Ukraine’s escalating things. Putin is striking back. So, wheat probably responded to the geopolitical tensions,” he explains.

Corn Follows Wheat Also Adding Risk Premium
Corn futures followed wheat higher on Tuesday and saw technical buying as it pushed through some key moving averages including the 200-day for the March contract. Frye thinks futures can build on that strong technical close. “I think we can move up into that, you know, let’s call it $4.75, $4.80 area. This would be, you know, over some time here.
It’s not straight up. We’ll go up. we’ll come back and base a little. We’ll go up again, come back and base. You know, no markets go straight up or straight down but I think we can move higher.”

Fundamental help will come from strong demand as exports have been running at record pace as indicated by the export inspections. He also believes national corn yield needs to come down in USDA’s January Crop Production Report. “I do think we need a lower yield. I think we need the government to say something less than 186 in January. And I think they will. I think the yields from my standpoint, working with our grower base, corn yields are suspect here to be record,” he says.

Soybeans Fall Awaiting Proof of China Sales
Soybeans started higher during Tuesday’s day session on a story from Bloomberg that indicated China would meeting the entire 12 MMT soybean purchase agreement struck with the U.S. as well as the 25 MMT annually for the three following years. However, there was no daily flash sale Tuesday morning and so Frye says the market needs to see proof of those export commitments or the trade will sell every rally.

$12 Soybeans Still Possible With China Deal
Frye is confident the U.S. and China will get the deal finalized and signed in the near future and that the Chinese have committed to buy the entire 12 MMT. “They are already buying U.S. soybeans at prices that are above Brazil’s so that tells me there is a deal,” he explains. While the 12 MMT could be purchased before the end of 2025 Frye admits those shipments cannot be moved in the next four weeks.

Cattle Soar
Live and feeder cattle futures soared on Tuesday on short covering and corrective buying according to Frye. He says, “It takes a while to digest a move, as large as a move was down. It’s going to take a little while to digest that. So how do we do that? We have a wave of decay or a wave that’s back into that trend. And so a little ABC correction, probably pushing fats on the February up in that $228, $230 area. I would say Jan feeders up in that $335, $340. I don’t think you’re going to fill the big gap in January feeders, but you could push up into it or the edge of it at least, and I think that’ll take place over, you know, the next three or four weeks of December. After that, I think you can start tipping this market back over in early January and head lower. I think those are going to give us nice hedging opportunities. I think we have highs
in place for a while. I think we’re going to see the market move lower after this correction is done,” he says.

Cotton Struggles
The cotton market has continued to struggle with prices below the cost of production for producers. Despite record low acreage the market saw an increase in yield and production in the November WASDE and Crop Production Report which has also been a headwind for the market.

“Recently the cotton market is very sensitive to the economy and of course with crude oil going lower and with our president that wants cheaper energy prices, that’s how you get polyester. That makes it harder on cotton to compete. And so we’ve just pushed the prices lower. Funds have become as short on cotton as they are on the weak classes. We see them set a new record about every third week as far as their short position. So they’re piled on to that market to the downside. And so it just has not been able to lift its head up. And we need some fundamental stimulus to get that market going and get short covering,” he adds.

Grains Rally on China Hopes: Is China Buying Beans?

Mon, 11 Aug 2025 20:37:48 GMT

Grain and livestock futures ended mostly higher on Monday.

Soybeans Soar on Hopes of China Soybean Purchases

Arlan Suderman, chief commodities economist with StoneX, Inc., says soybeans led the rally with nearly 24 cent gains in November on hopes for China export business after President Trump tweeted he’d encouraged Beijing to quadruple their purchases.

However, he thinks the market may have gotten ahead of itself.

“I don’t blame traders for covering some short positions just in case there were purchases or even a deal announced but I think the market may be too optimistic about the news,” he says.

Especially since there was no confirmation in the commercial market of any sales and certainly no indication of a deal at hand.

“China does have enough infrastructure within the system that they can kind of buy some under the cover, but we see no evidence of it, and it’s unlikely that they did,” he adds.

Trump Extends China Tariff Truce 90-Days

The markets closed just as President Trump announced he was extending the Aug. 12 tariff truce between the two countries another 90-days.

“The fact that President Trump, according to CNBC, signed an executive order extending the suspension of the high tariffs in another 90 days, indicates to me we’re probably not close to a deal involving commodities yet.” explains Suderman.

Will a Possible Deal Miss the Soybean Export Window?

The 90-day extension could mean the U.S. will miss the fall export window for selling soybeans to China and that is a concern to Suderman.

“Yeah, another 90 days takes us to November and trade deals usually tend to wait to the last minute for leverage against the clock. So, this is not a good sign for getting a deal signed that’s going to impact soybean trade. If you look at soybeans at China’s books on the books right now, they usually are very active booking new crop soybeans in the summertime for delivery. As we harvest those beans, immediately load them on a boat and start them across the water.”

China has not bought any soybeans in the new crop marketing year even though U.S. prices are over $1 below Brazil.

He says China has enough Brazil soybeans booked through October, even November and so the U.S. may not pick up any business until after that.

“They have 12 million metric tons landed in July. I think 11 million bushels, excuse me metric tons were expected to land this month, 10 or 11 next month, 9 million in October,” he explains.

China is also buying Argentina soybean meal as a contingency plan in case a deal isn’t worked out with the U.S.

Markets Gear up For WASDE: Is the Most Bearish Yield Priced In?

Corn and wheat saw some spillover support from the rally in soybeans, but the grain markets were also squaring ahead of the August WASDE.

Suderman thinks the 184.4 bushel corn yield estimate may already be worked into the corn market.

“The market bottomed last week when the average trade guesses came out at only 184.4 on corn yield. That told me the traders were looking for a higher figure,” he says.

Will August Be The Biggest Yield Estimate From USDA?

Suderman says it is very likely August will be the high water mark for yield as USDA does not use field surveys for the report and because of past precedent.

“I dug up the data for the last 32 years going back to 1993. And I found that the final yield was higher than the August yield in those years when they raised it in August only five times. It was lower than that August yield 11 times and matched it once. And so USDA, when they raised it in August, have a tendency to overstate the yield and then pull back from that,” he explains.

So, Has the Corn Market Bottomed?

If USDA comes in with a smaller yield estimate than 184 bushel and that is confirmed by the crop tours in the Midwest he thinks it’s possible the corn market may have put in an early harvest low with the contract lows scored last week.

“Last year the market bottomed in August and so the precedent has been set,” he says.

What Will the WASDE Hold for Soybeans and Wheat?

Suderman says soybean yield estimates heading into the WASDE are at 53 bushels, which he thinks is reasonable. He doesn’t expect much change in demand from USDA.

“I wouldn’t be surprised if they cut their new crop exports, but I don’t expect them to do that in this report.”

Wheat production is expected to be slightly higher due to strong hard red winter wheat yields, but could be offset by a lower spring wheat production estimate and better demand.

Market Watches Trump Putin Meeting

President Trump and President Putin are set to meeting in Alaska on Friday and the market will be closely watching the outcome especially commodities like crude oil and wheat.

Suderman doesn’t think there is much war premium in the ag markets and so a cease fire could be negative for the wheat market.

Cattle Recover Monday But Is the Top In?

Cattle futures saw a slight bounce on Monday after bearish reversals on Friday which has many calling a top in the cattle market.

However, the fact that live and feeder cattle futures both posted higher weekly closes on Friday is a signal to him that the top may not be in just yet.

Russia Orders ‘Necessary Measures’ to Boost Ag Exports

Thu, 10 Jul 2025 20:13:01 GMT

The Russian government ordered “necessary measures” to boost ag exports after wheat sales to start 2025-26 fell to their lowest since 2008, without providing specific details. As we previously reported, Russia cut its wheat export tax to zero for July 9-15 — the first time the tax has been removed since it was introduced in 2021. It is unclear how long the zero-duty period will extend.

Reuters reported there was already a shortage of wheat at Black Sea grain terminals. It quoted a trader as saying, “Grain is arriving at the port two to three weeks later than exporters expected, due to delays in harvesting, lengthy procedures for obtaining declarations and low prices.”
Read more from Pro Farmer.

Exploring the Unprecedented Fertilizer Trends of Spring 2025

Thu, 08 May 2025 21:38:28 GMT

The fertilizer market is bringing forward supply chain issues, pricing levels, and other dynamics in an unprecedented fashion.

“We came into 2025, thinking things might calm down–feel a little more steady, a little less volatile–and it’s been anything but,” says Josh Linville, vice president of fertilizer at StoneX. “Let’s just put this way, things are happening this spring we’ve never seen before.”

His top advice for farmers is stay focused on the movements in the market, be attentive and watch for opportunities.

“Farmers are not making a lot of money this year, and the forecast for 2026 doesn’t look good either,” he says. “Our natural pattern is to just stick our heads in the sand and hope it gets better. We cannot do that. Every single season, every single year, there are opportunities. Keep your head up. Keep the conversations going. Get frustrated, but don’t get so frustrated that you just shut down.”

Linville shares 5 watch points in the fertilizer market.

1. Two bright spots
Across the fertilizer industry, from the U.S. perspective, Linville sees two areas where there is some positivity in pricing: anhydrous ammonia and potash.

“Everything else has been, honestly, a little depressing,” Linville says. “Phosphate prices are sky hill. Urea prices are sky high.”

2. Sidedress pinch points
“The UAN situation is snug. We ended up having the perfect storm of events, and retailers are struggling to find any product that will ship in the month of May, and this has been going on since April,” Linville says.

He says shifts to urea for sidedress applications are being met with increased price for that product as well. So many farmers will at least look at anhydrous as an alternative.

“Farmers are resilient. They all try different things. They’ll get to the end of the road–they’ll get this thing planted, they’ll get it fertilized, they’ll get it raised,” he says.

3. Chinese exports carry major sway in the market
Whereas China previously exported between 5 and 6 million tons of year of urea, in 2024, the country exported 266,000 tons.

“It was the shock of the century,” Linville says. “And in the first quarter of 2025—January, February, March—it’s been 3,600 tons. That is not an error; I’m not missing a couple of zeroes—3600 tons. You come off a really dismal 2024, and you start ’25 this way, and the world is trying to figure out what it’s supposed to do going forward.”

Linville says he hears reports of solid Chinese stockpiles at perhaps record levels.

4. There are other urea exporters to watch
When asked if he’s worried about losing exports of urea from Iran—the world’s third biggest exporter–Linville responds, “very.”

“We spend a tremendous amount of time trying to figure out what China is going to do, and when you bring Iran into the conversation, it’s short-sighted to just reply you don’t care to buy from them,” he says. “If they shut down exports, and we lost 4.8 million tons, that’s likely losing another China.”

5. Russia and Ukraine are on the watchlist
As both key agricultural input markets, Russia and Ukraine remain at the top of the list to watch. With the recent Trump administration deal on rare earth minerals with Ukraine, Linville says this underscores where to train our eyes.
“I’m not sure just what the response from Russia is going to be,” Linville says. “That’s obviously a major, major watch point.”

In 2020, Russia and Belarus together added up to provide about 20% of the global supplies of nitrogen, phosphate and potash.

Another Cut to Russia’s Wheat Export Forecast

Wed, 05 Mar 2025 21:23:24 GMT

Russia’s 2024-25 wheat exports are expected to total 40.5 MMT, according to Rusagrotrans, down 1.5 MMT from its prior forecast. That includes shipments to Eurasian Economic Union countries – Belarus, Kazakhstan, Kyrgyzstan and Armenia.

The ag railway transport company said 1.95 MMT of wheat was exported by Russia in February, the lowest level for the month in five years. It expects March exports to decline even more, “as the volume of applications at deep-water ports, which typically account for around 80% of total exports, is less than 1 MMT.” Rusagrotrans expects Russia to export 1.5 MMT to 1.6 MMT of wheat this month, which would be the lowest in four years.
Rusagrotrans said it’s possible only 7 MMT of the 10.6 MMT export quota for Feb. 15 to June 30 may be exported. It noted replacing “missing” exports from Russia “will be challenging for the global market over the next four months.”

More from Pro Farmer.

Is There Any War Premium Even in the Markets Today?

Fri, 14 Feb 2025 21:52:16 GMT

President Donald Trump said on the campaign trail he would end the war in Ukraine — and this week, he stated negotiations would start “immediately.”

The news came after President Trump held what he called a “lengthy and highly productive” phone call with Russian President Vladimir Putin Wednesday morning.

Then, later in the week, Ukrainian President Volodymr Zelensky met face-to-face with Vice President JD Vance for highly anticipated talks at the Munich Security Conference, where Zelensky urged the United States “not to make any decisions about Ukraine without Ukraine.”

Zelensky also said he would only meet in person with Putin if a common plan is negotiated with President Trump first. Zelenskyy also said he believes Trump is the key to ending the Russia-Ukraine conflict.

As negotiations appear to be taking shape, the conflict in Ukraine has also been in focus for certain markets since Russia first invaded Ukraine nearly three years ago. The initial invasion sent wheat prices soaring.

So, it begs the question: is there a war premium built into the markets today? According to Joe Vaclavik of Standard Grain, the answer is simply, “no.”

“There’s no war premium, not in my opinion. You take a look at a wheat chart and go back to 2022 when prices spiked on the initial invasion. We’ve done nothing but trade lower in wheat for more than two years. It’s been a downtrend, a multiple year downtrend while the war was going on,” says Vaclavik.

Vaclavik points out wheat prices have seen strength lately and are basically back to pre-Covid levels.

“Why would I believe now that an end to the war is bearish when the price action has been nothing but bearish as the war has gone on for the last two years? I just don’t buy into that,” says Vilsack.

Chip Nellinger of Blue Reef Agri-Marketing agrees with Vaclavik, saying even if the war gets resolved, it doesn’t necessarily mean the situation in Ukraine will immediately turn back to normal.

“That winter wheat crop is in the ground already and struggling with dry weather over there. They’ve got cold temperatures. And so it is what it is on the wheat side,” says Nellinger.

Nellinger adds the wheat chart has turned more friendly, with wheat prices posting multi-year highs.

“Looks to me like the funds are about set to come out of their short position. You have more bullish fundamentals now than we’ve had in quite some time. So maybe a year out, 2026 or 2027, things start to get back to normal in Ukraine, but right now it is where it is and they’re not going to just magically produce record amounts of grain just with a peace agreement here over the next couple of weeks.”

Tariffs Aren't Going To Be Our Largest Trade Issue

Wed, 08 Jan 2025 20:54:19 GMT

The most overused word in the English language since November has to be the word “tariff” as speculation runs rampant on how much a Trump 2.0 presidency will use this controversial trade negotiation tool.

Here’s a sampling, so you get the idea: “Think About Making These Purchases Before the Trump Tariffs are Enacted”, U.S. News; “U.S. Carmakers Face Rough Ride Under Trump Tariffs”, Bloomberg.com; and “Bourbon Industry Concerned About Looming Tariffs”, LEX18. You know it’s bad when tariffs threaten to make it harder to drink your troubles away!

Tariffs can disrupt almost any industry, but U.S. agriculture has already seen this movie.

During Trump’s first term, according to the USDA’s Economic Research Service, retaliatory tariffs reduced U.S. agricultural exports by $27 billion from mid-2018 when the tariffs were imposed to the end of 2019. Soybeans accounted for the majority of the decline at 71%, followed by sorghum and pork at 7% and 5%, respectively. The losses were primarily concentrated in states, such as Iowa, Illinois and Kansas, exporting these products.

As a result of ag being caught in the cross fire of a new trade war, the USDA allocated $23 billion in trade-aid payments to U.S. producers. However, the rest of the story is that the Trump administration’s tough-line trade tactics ultimately led to the China Phase I deal and record exports to China and record farm income in 2021 and 2022.

That turned out to be short-lived. Even with the Phase I deal still in place, 2024 saw a serious erosion of U.S. agricultural exports to the Chinese mainland. After reaching a high of $36.38 billion in goods in 2022, USDA ERS projected 2024’s final export tally to China was expected to come in at only $23.3 billion.

So What Exactly Went Wrong This Time Around?
One could still blame such an export freefall on some of the tariffs that are still in place. But the truth is that the U.S. is now navigating the most troubled geopolitical waters since the Cold War days of JFK and Ronald Reagan. Simply put, China and Russia—aka the old Soviet Union—are not our friends.

What should be concerning, to those in U.S. agriculture and beyond, is the influence these two countries now have over a multi-country trading alliance referred to as BRICS. That acronym is short for the Brazil, Russia, India, China and South Africa alliance.

The original members of BRICS held their first summit in Russia in 2009 and sought to establish themselves as a geopolitical club to counter the influence of the G7 nations: the U.S., Canada, United Kingdom, Germany, France, Italy and Japan. Their agenda at that first meeting was firmly shaped by the global recession and, therefore, mostly focused on redistributing voting rights in the International Monetary Fund and World Bank in favor of the developing world. One of the most controversial statements to come out of that 2009 meeting was the calling for a new global reserve currency. From that point on, it was clear that the dominance of the U.S. dollar was being put on notice by the members of BRICS.

Today, the trading bloc is the world’s largest by population and accounts for about 37% of the world’s grain. China has been particularly aggressive in strategic moves with countries within BRICS. In 2023, Brazil was China’s largest source of agricultural imports. This movement of agricultural products accounted for more than 50% of Brazil’s total trade with China and 24.85% of China’s overall agricultural imports. No longer are U.S. farmers China’s primary source of imported soybeans or corn.

Real-Life Monopoly
Right now, China is buying up railroads in Brazil plus upgrading and expanding port facilities. Between 2007 and 2022, China invested $71.6 billion in 235 projects carried out in Brazil. The country’s investment and buying spree have been more impressive within the continent of Africa. At present, 53 out of 54 nations in Africa are part of China’s Belt and Road Initiative (BRI), which supports building key infrastructure projects throughout Africa, Asia and Europe. The projects intend to provide improved shipping corridors for precious raw materials and commodities. As of 2023, the two-way investment between China and its BRI partners had reached $380 billion.

If U.S. agricultural exports to China continue their decline, then it won’t be because of the “T” word. It will be because China holds a majority of railroads, utilities and low-cost properties on the world’s Monopoly board. Why buy U.S. soybeans when you can ship them from Brazil on your own railroad to your own port to your own container ship? Same goes for precious metals in Africa or oil in Russia or Iran. If you already own everything but Boardwalk and Park Place, then you don’t need the economies of the West to be involved as you plot your future livelihood.

Time To Take Control
A lot of unknowns exist as the second iteration of the Trump presidency begins. But this is clear. In 2023, the U.S. trade deficit with China was a whopping $279.4 billion. Those are the very dollars subsidizing a railroad somewhere in Brazil or a superhighway in South Africa—all to our own detriment. For the sake of our own future, we must start negotiating trade deals from a position of strength instead of begging for mercy. “Speak softly, and carry a big stick” was Teddy Roosevelt’s mantra during his time as president. When it comes to U.S. agricultural trade, we need Trump to start channeling his inner Teddy beginning Jan. 20, 2025.

Russian Analysts Say Winter Crops May Not be in as Poor Condition as Data Suggests

Mon, 09 Dec 2024 21:32:15 GMT

The condition of Russian winter crops may not be as bad as data suggests as those figures do not adjust for the fact that many plants sprout later due to climate change, leading Russian agriculture analysts said. Data from the state weather forecasting agency last week indicated that over 37% of winter crops are in poor condition or have not sprouted due to low moisture levels.

“Crops in parts of the South were still vegetating in late November this year, something that was not typical a decade ago. This may not have been fully captured in the agency’s assessment,” SovEcon said. However, SovEcon said it was likely to slightly downgrade its 2025 wheat production forecast of 81.6 MMT.

The head of IKAR consultancy, Dmitry Rylko, said crops in an early sprouting stage with one leaf per sprout in November were classified as being in a “poor state” by the state weather agency, while they had a good chance of surviving the winter. “Farmers like this stage of crop development, as it is quite conducive to overwintering. However, the weather forecasting agency classifies such crops as ‘in poor condition,’” Rylko said. According to IKAR’s data, nearly all winter crops in the European part of Russia were in the one-leaf sprouting stage.
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Gulke: Here's Where We Stand In The Grain Markets

Fri, 28 Jun 2024 20:02:57 GMT

Jerry Gulke, owner of Gulke Group and a Top Producer columnist, recently joined the Top Producer podcast to share three trends he’s seeing in corn, soybean and wheat prices.

1. Volatile Corn Market
Overall, the price of corn has been on the downhill slide for the past two years following Russia’s invasion of Ukraine. However, it’s important to keep historical prices in mind.

“Four or five years ago, we were hoping for $4 corn. Now, it’s a disaster if it goes that low,” he says. “We’ve had some good times, and now we’re paying the piper.”

Prices have rallied a bit since the end of February, but they are still frequently changing.

“We’re doing much better than last year in exports - so far, so good,” Gulke says. “Now it’s a day-to-day thing. I think we’re going to be in a marketplace where it’s volatile.”

2. Beans Aren’t Adding Up
As the South American soybean harvest comes to a close, the market isn’t changing the way Gulke anticipated.

“Something is kind of screwy,” he says. “Argentina should be coming on the market with a bigger export for meal, yet, we’re still exporting meal.”

He says the soybean market is behaving like there are too many beans in the U.S., and the South American crop is better than what some people think.

“We’re seeing some differences of opinions and the market is acting nervous,” Gulke says.

3. Wheat Is Interesting
Gulke explains that because the wheat market is small in comparison to what’s produced in Europe, it is heavily influenced by what the crops in those countries look like. And right now, production in Ukraine and Russia looks smaller than it did a few months ago.

“We’re a small fish in a big pond. When they have a small problem, it greatly affects our demand on a percentage basis for wheat here,” he says. “Russia doesn’t have a good crop every year. They do falter and they can falter by a lot.”

He cautions the wheat market is one farmers need to keep an eye on.

“Our indications were that a few weeks ago was the top in wheat. Right now, we’re not competitive with wheat price-wise - but we’re still hanging in there,” he says. “If we can get through harvest without too much of a break, then we may have put in a bottom quite some time ago.”

Catch up on all episodes of the Top Producer Podcast.

Wheat Prices Rise as Frosts Damage Crops in Top Exporter Russia

Thu, 09 May 2024 18:08:42 GMT

Chicago wheat futures rose on Thursday as Russia declared a state of emergency in key grain-growing regions due to frosts, while corn and soybeans also edged up.

Three of Russia’s key grain-growing areas declared a state of emergency on Wednesday, citing May frosts that have caused severe damage to crops and will reduce this year’s harvest.

Dealers said the impact of frosts in Russia, the world’s top wheat exporter, would be closely monitored with crops entering a key period for their development.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 1.7% at $6.45 a bushel as of 1011 GMT.

Japan’s Ministry of Agriculture Forestry and Fisheries (MAFF) bought 114,077 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that closed on Thursday.

Corn gained 0.55% to $4.61 a bushel, while soybeans rose 0.35% to $12.32 a bushel.

Argentina’s Rosario grains exchange said the leafhopper plague has ruined around 20% of the corn crop this season, while cutting its harvest estimate for 2023/24 to 47.5 million metric tons from 50 million tons.

The exchange also held its estimate for the current soybean harvest at 50.0 million tons, though it cautioned harvesting has been delayed by rains and high humidity.

China’s soybean imports in April jumped 18% from a year earlier to 8.57 million metric tons, according to the General Administration of Customs, the highest on record for April as buyers snapped up cheap and plentiful Brazilian beans.

Expectation that the U.S. Department of Agriculture’s (USDA) May supply and demand and crop production reports due on Friday will show adequate supply limited the rebound.

There have been some bullish developments to spark short-covering that has driven the gains, but a USDA report due at the end of the week is expected to show a comfortable supply outlook in the United States and globally, Bergman Grains Research said.

(Additional reporting by Mei Mei Chu in Beijing; Editing by Varun H K, Subhranshu Sahu and Shounak Dasgupta)

The Untold Farmer Stories Of Ukraine: Q&A With Howard Buffett

Mon, 01 Apr 2024 17:15:15 GMT

As a farmer and global philanthropist, Howard Buffett and his namesake, The Howard G. Buffett Foundation, work where others can’t or won’t to address food insecurity, mitigate conflict, combat human trafficking and improve public safety.

After 10 trips to the front line in Ukraine (the first of which was April of 2022), Buffett shared key insights and takeaways to the attendees at the 2024 Top Producer Summit.

As Ukrainians are living day-by-day and the country’s farmers face instability in inputs, destruction of their infrastructure and the threat of landmines scattered in their fields, Buffett encourages U.S. farmers to see the threat to global food security and view this conflict through the eyes of a farmer.

Q: How do you describe your experience in Ukraine?
A: “It’s hard to imagine the amount of destruction. Many farmers lost everything they’ve had. Think about if you were to go home today and your machinery shed is completely shelled, all your equipment is burned, and you don’t know when you’re going to be able to go back in the field because there are hundreds of landmines.”

Q: How has the timing of this war affected global food security?
A: “If we didn’t have the largest corn crop we’ve ever harvested, a five-year high carryover in corn and a four-year high carryover in soybeans, and if South America didn’t have strong yields, the impact of Ukraine would be so much greater than it has been. The timing is such that we’ve avoided a serious crisis around the world with food insecurity so far, but that doesn’t mean it will stay that way.”

Q: How have you seen the support from the U.S. government show up in Ukraine?
A: “We have spent a majority of the money for Ukraine in this country in 31 states, 71 cities and 130 some production lines. We’re emptying out warehouses of ammunition that if we went to war with, we’d be surprised or disappointed with, and we’d be in trouble. I’ve been in a howitzer site, where 40% of the 155 shells firing came from the U.S. misfire, either because the ammunition is old or the electronics are corroded. We’re also replacing very old weapons systems with higher tech weapons systems, so we as the U.S. will be better prepared to fight if we have to fight.”

Q: How is the way this war is being fought different?
A: “Drones are the most important thing right now in this war. Ukraine is lacking air superiority, and that’s been a huge deficit for them and has caused a lot of casualties. The U.S. would not understand how critical drones are today if it weren’t for Ukraine. And I don’t think we’re just learning from a military standpoint; if you look at the resiliency and the commitment and the courage of Ukrainians, they’re teaching us something. After two years of the fight, sometimes you forget how it all started. This is Russia, who’s one of our biggest enemies. They would destroy America tomorrow if they could; they would take away your farm tomorrow if they could; they would take away our freedom and our democracy. They are our enemy, period.”

Q: What is the effort and timing of rebuilding?
A: “I have seen hundreds of villages in rural Ukraine that are completely leveled — there’s nothing left, there’s no families, no one can live there. They’re all mined, and you can’t even go into them. I learned a lesson in Afghanistan, seeing buildings get rebuilt, roads rebuilt in the middle of war. A Navy Seal told me, if you don’t rebuild while the war is still going on, people have no hope. If people cannot see to the future, if they cannot have any faith things are going to change, and they’re going to get better, they give up, and it gets hard to go on. So, in Ukraine, we are building schools, and we’re building police stations.”

Q: What do farmers need?
A: “As part of the Victory Harvest program, we have sent 74 combines, 84 tractors, drills and auger wagons. And so now we’ve helped get 260,000 acres of crops harvested and close to 160,000 acres planted. Some of you guys have had your own experiences with fertilizer shortages, but these farmers don’t get to buy fertilizer or walk into a bank and get an operating loan.”

There are a few groups Buffett recommends to farmers wanting to help other farmers. Farmerhood was started by a Ukrainian woman whose husband was fighting on the front line. Others include Save Ukraine and Super Humans .

Q: How can agricultural equipment be used for de-mining?
A: “There are hundreds of thousands of acres to de-mine. There are still farmers dying every week because of land mines. Our new project is to take what we know about equipment and apply it to de-mining with both verification and clearance. We’ve got about 11 acres and four bulldozers and four tractors dedicated to our testing — focused on using what we have and using GPS to map where we’ve run and verified where there are mines or not. The idea right now is to take a tracked John Deere 8360R, put a LaForge three point on it and build a protection plate with two rollers in the front and a big roller behind us. We are going to bring efficiency, safety and speed to this by taking technology and applying it in a completely different way.”

Q: What about the grain successfully grown and harvested in Ukraine?
A: “Of the wheat harvested in Ukraine this year, 28% of the crop is from occupied territories, which means Russia stole it. We’re putting out fires trying to figure out how to move grain out of the country. We’ve bought thousands of Ag Bags and are buying more. And we’re working toward structuring something to make it easier for Ukrainian farmers to move grain — but it’s not simple.”

Q: What are the consequences to U.S. agriculture if Russia wins?
A: “If Russia wins, they will export all the fertilizer and the crops they can as cheaply as they can to compete with us. And then worse than that, Russia will fuel all the conflicts so they are able to maintain control of the Black Sea.”

In his latest book , Howard Buffett documents the atrocities committed against Ukrainians, as well as their suffering, resilience and courage. “Courage of a Nation” documents the first two years of war in Ukraine following Russia’s full-scale invasion in February 2022, and showcases a compilation of the thousands of images Buffett has captured over the 10 trips he has taken since the start of the war.

5 Trends To Watch In The Input Market

Thu, 29 Feb 2024 14:16:22 GMT

As fertilizer prices go through a seasonal spring elevation, experts are watching global dynamics to understand the market’s longer-term outlook in the U.S.

Among their top concerns are geopolitics, weather and low supply.

Possibility of Pipelines in Russia
Before Russia began invading Ukraine, they were the top global exporter of anhydrous. But due to their pipeline’s proximity to Ukraine, production plummeted.

Sam Taylor, farm inputs analyst at Rabobank, says the high prices that resulted from the loss of this pipeline aren’t expected to make another appearance.

“We saw the worst of the market really come and go,” Taylor says. “When we look to affordability, farmers should be able to reasonably feel comfortable in investing in a lot of these fertilizers.”

Josh Linville, vice president of fertilizer at StoneX, adds prices have the potential to significantly drop as Russia works on two new pipelines, one of which could come online as early as this year. However, the new route is also within reach of Ukraine and could be a potential target.

“You have a situation where the world’s largest exporter could pop up and start exporting again. Or, maybe they don’t,” Linville says.

The Israel/Hamas Conflict Continues
Another conflict with potential to impact the market is the situation between Israel and Hamas –even though Israel isn’t necessarily an area heavy in fertilizer production.

“This is one misstep away from the entire Middle East region jumping into the mix,” Linville says. “Sometimes the indirect impacts can have a foothold in the marketplace.”

Linville says the Middle East accounts for 51% of global urea exports and even a small reduction in supply could cause a scare and make prices jump.

China’s Unpredictability
Higher prices could also result from China–a major exporter of nitrogen–who has placed new restrictions, Those new restrictions could mean 40% less exports from the country.

“Right now, we’re going ahead with the idea that the Chinese are going to restrict exports,” Linville says. “They’re going to lower that number and that’s going to help keep prices a little bit more elevated.”

Taylor shares while tight supply may be in the near term, the longer outlook may be more positive.

“We anticipate the bulk of the exports from the Chinese market are likely to come in the second half of this year, which ultimately means a semblance of tightness in the North American market and also the global markets for the first half,” Taylor says. “There is room for optimism in the second half of this year as we look forward into 2025 to potentially see some downward pricing dynamics.”

With this in mind, Linville says it’s nearly impossible to predict what China will do, and there’s a chance the restrictions could be lifted at any time.

“The government continues to step in, play a bigger role and have a heavier hand on what happens and what doesn’t happen,” he says. “We’re watching very closely. Are they going to further restrict exports? Are they going to loosen up a little bit? We don’t know.”

The Weather Forecast
Domestically, water levels continue to be top of mind.

“The Mississippi River is an artery for our transit. When it suffers, we suffer,” Linville explains. “This is the most liquid point of fertilizer trade in the North American marketplace.

Linville says that while the Mississippi is in good shape for now, the Northern Plains have the potential to slow down the water flow due to the below-average level of snowfall they’ve received this year.

High Levels of Fall Fertilizer Applications
U.S. fertilizer applications from fall 2023 are also expected have a lasting effect on spring supply, and according to Linville, the short turnaround time between fall and spring fertilizer applications makes it difficult to restock an adequate amount of inventory.

“When we look at anhydrous, it was the third best application we’ve seen since 2000. Inventories have been drawn down very low,” he says. “You get about 90 days for the system to rebuild. There is not enough pipeline capacity, rail capacity, truck capacity or barge capacity to get the system rebuilt.”

Until inventory is rebuilt, elevated spring prices for anhydrous, phosphate and potash can be expected.

“High prices are the manufacturer’s way of saying ‘I can’t meet demand, and I am trying to shock you and scare you into using urea, UAN or something else because I can’t balance yesterday,’” Linville says.

Taylor adds while tightness in the input market isn’t quick to correct itself, next year could bring better availability.

“The current market environment still incentivizes imports into the North American market,” he says. “There should be room for inventory to build up into 2025.”

Missile Strike by Russia Now Considered One of the Deadliest Attacks On Civilians Since the War Started

Fri, 06 Oct 2023 18:36:17 GMT

Russia conducted a missile strike on Thursday near the eastern Ukrainian city of Kupiansk, resulting in the deaths of at least 51 people, including a child. This attack is considered one of the deadliest against civilians since the onset of the war.

The missile strike, carried out by Moscow’s forces, targeted a cafe and a shop in the village of Hroza, situated in the Kharkiv region. These establishments had local residents inside at the time of the attack.

Ukrainian Defense Minister Rustem Umerov expressed the urgent need for more defense systems in Kyiv to protect the country from acts of terror. There are concerns about a potential reduction in military aid from Western allies, making it crucial for Ukraine to bolster its defense capabilities.

The United Nations’ humanitarian coordinator in Ukraine conveyed that the images emerging from the scene of the missile strike are profoundly distressing, highlighting the devastating impact on civilians in the region.

Russia Also Attacks Ukrainian Grain Storage

Russian drones attacked port infrastructure in Ukraine’s Odesa region, damaging a grain silo near the Danube River. A Turkish-flagged general cargo ship hit a mine yesterday in the Black Sea off the coast of Romania and sustained minor damage.

Russia resumes seaborne diesel exports with new restrictions after recent ban. Russia decided to allow the resumption of seaborne exports of diesel fuel, just weeks after imposing a ban that had significant global market repercussions. The ban had been instituted in response to domestic fuel cost increases that contributed to inflation concerns ahead of Russia’s presidential elections in March. Link for details via Bloomberg.

Under the updated regulations, diesel shipments can restart, provided that the fuel is delivered to Russian ports via pipelines, particularly to the western ports that account for most exported volumes. This move is expected to provide relief to importers, as Russia is a major seaborne exporter of diesel-type fuels.

The new rules are set to free up approximately 90% of the pre-ban seaborne export volumes, estimated at around 630,000 barrels per day. However, the regulations also stipulate that producers must retain at least 50% of their diesel output within the country, ensuring domestic supply.

Impacts: The lifting of the ban caused key metrics for diesel traders to decline temporarily, with the fuel’s premium over crude oil falling before recovering. The prompt timespread, which provides insights into market tightness and supply urgency, also saw fluctuations. Additionally, exporters who do not produce their own diesel but purchase volumes from the domestic market will now face high export duties, set at 50,000 rubles (approximately $500) per ton, close to the current price of Russian inter-seasonal diesel on the SPIMEX commodity exchange.

The Russian government is also fully restoring subsidies to refiners to meet domestic fuel demand and compensate for price differences between domestic and international markets. This decision followed a reduction in subsidies last month, which had been criticized by President Vladimir Putin for exacerbating domestic fuel market conditions.

Senate Votes to Limit Foreign Land Ownership

Wed, 26 Jul 2023 20:24:53 GMT

Roughly 37.6 million acres of U.S. ag land is foreign owned, according to USDA. The majority of these deeds are held by Canada, Netherlands, Italy, United Kingdom, Germany and China. However, select purchases of U.S. land could come to an end following a Senate vote this week.

The U.S. Senate on Tuesday voted 91-7 in favor of an amendment to the National Defense Authorization Act of 2024 that, if made law, would prohibit China, Russia, North Korea and Iran from purchasing U.S. land.

Also included in the amendment is a requirement for the president to submit a report to Congress on any waiver granted to a prohibited country.

Sen. Mike Rounds (R-S.D.), who helped push the legislative changes, says the time for foreign landownership action is now.

“These four adversaries view America as their top competitor and only wish to gain advantage and opportunities to surveil our nation’s capabilities and resources,” says Rounds. “This commonsense provision will make our homeland more secure.”

The amendments will now make their way to the House floor. If the House majority votes in favor of the provisions, they will become law.

What's the Biggest Threat to Global Grain Supplies? It's Actually Russia's Exports, Not Ukraine

Tue, 25 Jul 2023 14:58:19 GMT

Russia continues to ramp up attacks on Ukrainian ports on the River Danube. Local officials say more than 60,000 metric tons of grain have been destroyed in the past week while also crippling grain storage infrastructure.

Grain prices continue to rally in the U.S., with wheat futures closing limit up on Monday. That opened the door for expanding trading limits on Tuesday. However, agricultural economists and markets analysts point out the situation still hasn’t reached a worst-case scenario yet.

Since Russia put a halt to the UN brokered grain deal last week, the Danube is a key export route, and the grain facilities under attack are located across the river from Romania, a NATO member.

According to John Payne, after Russia targeted Odesa over the weekend, there’s one last port in Ukraine currently open, which is Izmail. He says the port is located extremely west, almost in Romania. Payne says Russia also targeted Izmail over the weekend, but to a lesser degree with grain continuing to move from that location.

“This represents close to 25% of what they are able to export,” says Payne of hEDGEpoint Global Markets. “Fifty percent goes out of Odesa, which is now closed. The last 25% leaves over land, but keep in mind the countries around Ukraine don’t want this supply because it will hurt their own farmers.”

Not only are ports being targeted, but Russia’s defense ministry said last week Russia would deem all ships traveling to Ukrainian ports to be potential carriers of military cargo. The escalation could cause shipping insurance rates to climb, another threat to moving grain out of Ukraine.

“The problem is shipping,” says Payne. Insurance companies are not going to insure vessels in the Black Sea anymore after Putin said they could be fired upon. That leaves the friendly ports in the West Black Sea, often called CVB (Contstana, Varga, Bugas). They are going to try and rail grain there, but it’s hard to get it there and expensive.”

What’s the Worst-Case Scenario for Black Sea Grain Supplies?

So, what would be worst case? The July Ag Economists’ Monthly Monitor , a survey of nearly 60 ag economists from across the U.S., recently asked economists to share their views on what are some potential factors that could shape agriculture over the next 12 months but aren’t currently being discussed or highlighted enough. The survey was completed just days before Russia pulled out of the grain deal, but one economist was already concerned about an escalation.

“The current assumption is that the Ukraine grain initiative will stop, but that Ukraine will work with Turkey and the UN to continue shipments,” said the ag economist in the anonymous survey. “What happens if Russia strikes a ship, but then Ukraine strikes back by hitting an outbound ship carrying Russian wheat or crude oil? Maybe a low risk, but massive implications for the commodity markets if commodities coming out of Russia slow or halt. And two, what if an ‘accidental’ war breaks out between U.S. and China in the South China Sea, bringing a halt to commodity trade with China?”

The concern may seem extreme, but after the escalation over the past week, it seems to be a possibility. This past weekend on U.S. Farm Report, Payne said when you look at the global balance sheets, the loss of the Ukraine crop, at least the export terminals, isn’t a huge deal. He says what could be a huge deal is a lack of any commercial shipments in the Black Sea.

“The biggest question in all of this is what happens to Russia shipments,” says Payne. “Russians feed a lot of the poorer countries as well as float a lot of oil from the ports in the Black Sea. Our worry is what happens if those stop? All of the sudden the hungry of the world will come for U.S., EU and South American supply. Thankfully, the Brazilians have it now, but prices need to keep going to incentivize supply growth.”

Russia’s Grain Supply

Payne says the following Bloomberg charts show Russia’s weekly grain exports compared to Ukraine’s weekly exports. Ukraine’s grain exports tanked once Russia invaded Ukraine, increased after the grain deal was brokered, but then have seen another sharp decline since May. That compares to Russia where grain exports reached record levels in July before seeing a sharp drop.

DuWayne Bosse, of Bolt Marketing out of South Dakota, says the trade talk overnight Tuesday was that barges are still being loaded at Ukrainian ports despite the recent attacks. He says there’s also talk that Ukraine may attack Russia’s Kerch Bridge, which is the passageway for nearly half of Russia’s wheat exports.

The potential strike to Russia’s exports is one that Chip Nellinger, Blue Reef Agri-Marketing, also discussed on U.S. Farm Report this weekend. He says the commodity markets already knew there would be a massive drop in Ukraine’s production this year compared to a year ago.

“In my mind, it’s more about Russia, and they supposedly have a big crop,” says Nellinger. “That Black Sea grain corridor probably benefited Russia as much as much as it did Ukraine. And now if that’s going to really slow, and there’s been talk that Russia is going to keep some of that wheat off the market for an internal supply reserve, so to speak.”

Nellinger says bigger picture, the question is if Russia will continue to supply the world now that the Black Sea is closed, and he says India and China have been big benefactors of Russia’s grain.

Ag economists were also asked to provide their thoughts on the top three factors that could impact trade relations between the U.S. and China. Several economists responded that one of the biggest factors will be China’s support for Russia.

Buckle Up: The Perfect Storm Could be Brewing for Volatility to Explode in the Grain Markets Next Week

Fri, 21 Jul 2023 22:15:07 GMT

From growing tensions between Ukraine and Russia to the forecast for hot and dry weather across the Midwest, grain prices shot higher through midweek.

On Monday, Russia said it would halt participation in the year-old grain deal that was brokered by the U.N. The deal is important, as it allows Ukraine to export grain through the Black Sea. Just hours before, a blast knocked out Russia’s bridge to Crimea. Moscow called it a strike by Ukrainian sea drones.

Following the announcement to halt the deal, Russia also stepped up attacks on Ukrainian grain ports, while also issuing a vital warning later in the week: ships heading toward Ukrainian ports in the Black Sea will now be considered to be carrying military cargo, opening the door for more attacks.

Immediately following the escalation on Monday, grain markets were slow to respond. Chip Nellinger of Blue Reef Agri-Marketing says there’s been so much changing narrative about whether the grain deal will be renewed or not, but the deal has continued to be renewed. He thinks that’s why traders were slow to respond to the news.

“I think that there’s been so much back and forth about whether the black sea grain corridor is going to be renewed by Russia, the market has become a little bit weary,” says Nellinger. “And then Russia came out and said they were not going to renew that. And the market didn’t react to that, because I think a they thought maybe that there was still a chance. But I think by the middle of the week, it was apparent that Russia was playing hardball, they started attacking some Ukrainian ports and said they may look to fire upon some of these ships that are moving into the Black Sea towards Ukraine, and that really is what spooked the markets and got the algos coming in to the long side on the headline.”

Musical Chairs of Short Grain Supply

Nellinger says the funds have been short in the wheat market, and even though it was slow to react, the funds continue to buy breaks in the market as the situation in Ukraine and the Black Sea remains volatile. But there are still questions on who will see short supplies due to the interrupted flow of grain.

“I think the rally we’ve seen is the musical chairs that’s going to be played here in regards to who’s getting shorted with supply,” says John Payne of hEDGEpoint Global Markets. “On the global balance sheets, the loss of the Ukraine crop, at least the export terminals, isn’t a huge deal. What is a huge deal is if we’re going to lack any commercial shipments at all in the Black Sea.”

Payne says there is one port in the southern part of Ukraine that will be open, as well as others in the southeastern part of the Black Sea.

“At this point, I think that’s the uncertain events, is figuring out how is this going to play out as we move forward,” he says. “I don’t think we’re going to see $14 Chicago wheat, but I think you could have some knee jerk reaction in the nearby contracts.”

Nellinger says a massive drop in Ukraine’s production, compared to a year ago, was already a known fact.

“In my mind, it’s more about Russia, and they supposedly have a big crop. That Black Sea grain corridor probably benefited Russia as much as much as it did Ukraine. And now if that’s going to really slow, and there’s been talk that Russia is going to keep some of that wheat off the market for an internal supply reserve, so to speak.”

Nellinger says bigger picture, the question is if Russia will continue to supply the world now that the Black Sea is closed, and he says Indian and China have been big benefactors of Russia’s grain.

High Heat and Little Rain Forecasted for the Midwest

While the uncertainty in Russia and Ukraine were the big market movers earlier in the week, by mid-week, the U.S. markets were looking at weather.

Eric Snodgrass of Nutrien Ag Solutions says the heat that’s been parked in Texas and across the Southwest this month, will barge into the Midwest starting on Wednesday. He says it’ll push into the central United States and the Plains.

“And we’re going to be talking about temperatures that are going to be in the mid upper 90s as far north as Minnesota and the Dakotas, and then possibly, there’s going to be some pockets in Missouri, Illinois, Nebraska, Kansas, that are going to be over 100 degrees Fahrenheit,” says Snodgrass. “And so we always worry it’s going to last. Is this going to be a two to three day event? Or is there going to be a 10-day event or a 30-day event?”

He says the current thinking is the heat starts on Wednesday and then lasts through the weekend. There are some forecasts pointing to 105 degree heat in Iowa.

“But the question we have is, there’s humidity in this pattern. So, will there be storms that blow up in the middle of this and bring some cooler weather? That’s a possibility,” he says. “So, I would call it hot, hot with a lot of isolated storm activity. There’s going to be winners out of this, and there’s going to be a larger area that’s going to see some crop damage.”

Nellinger also says the duration of the heat is the biggest question for the markets.

If it’s three days of 100 degrees, and then you get some rain on top of it, probably not that big of a deal. If it’s three weeks of 100-degree temperatures, like some of the weather models are hinting at, and no rain or the rain has pushed north because of the high-pressure ridge, then you’re talking about heat and dryness at the exact wrong time. And it’s going to affect both corn and soybeans that will be starting to flower,” says Nellinger.

Nellinger thinks the volatility that happened this week in the markets, is only going to expand next week, depending on what the weather forecast says.

Payne says the forecast for next week caused the insurance cost for short-term options to skyrocket.

“That is kind of a front running event where if this weather would really turn dry in August, you could see some short covering, obviously, but I think the funds have moved out to a general degree. It really comes down to soybeans,” says Payne.

Payne says he doesn’t think the corn supply satiation is as threatening s the soybean crop.

“The lack of acres puts a lot of stress on whatever we’re going to have the crush numbers come in at. While they’re smaller, crush margins are really good. So, a break in the price isn’t going to help unless you get soy oil and soy meal falling with it, and right now you have meal up and oil up.”

Moscow Halts Grain Deal After Bridge to Crimea Struck

Mon, 17 Jul 2023 15:36:18 GMT

Russia halted participation on Monday in the year-old U.N.-brokered deal that lets Ukraine export grain through the Black Sea, just hours after a blast knocked out Russia’s bridge to Crimea in what Moscow called a strike by Ukrainian sea drones.

Russia said two civilians were killed and their daughter wounded in what Moscow cast as a terrorist attack on the road bridge, a major artery for Russian troops fighting in Ukraine.

The Kremlin said there was no link between the attack and its decision to suspend the grain deal, over what it called a failure to meet its demands to implement a parallel agreement easing rules for its own food and fertilizer exports.

“In fact, the Black Sea agreements ceased to be valid today,” Kremlin spokesman Dmitry Peskov told reporters on a conference call. “Unfortunately, the part of these Black Sea agreements concerning Russia has not been implemented so far, so its effect is terminated.”

Turkish President Tayyip Erdogan, the grain deal’s sponsor, said he still believed Putin wanted it to continue. The Russian and Turkish foreign ministers would talk later on Monday, he told reporters.

“I hope that with this discussion, we can make some progress and continue on our way without a pause,” Erdogan said.

Russia’s foreign ministry said it would consider rejoining the grain deal if it saw “concrete results” on its demands.

The blast on the road bridge to Crimea could have a direct impact on Moscow’s ability to supply its troops in southern Ukraine, and reveals the vulnerability of Russia’s own Black Sea infrastructure to devices such as seaborne drones: small, fast remote-controlled boats packed with explosives.

Images showed a section of the road bridge had come down and traffic was halted in both directions, although a parallel railway bridge was still operational. Blasts were reported before dawn on the 19-km (12-mile) bridge, which Russian President Vladimir Putin ordered built after seizing and annexing the peninsula from Ukraine in 2014.

Kyiv gave no official account of the blasts but Ukrainian media quoted unidentified officials as saying Ukraine’s Security Service was behind it. Ukraine has long maintained that the bridge was built illegally, and its use by Russia for military supplies makes it a legitimate target. It was last hit by a massive explosion and fire in October.

Russia’s suspension of the Black Sea grain deal could drive up food prices across the globe, especially in the poorest countries. Ukraine and Russia are both among the world’s biggest exporters of grain and other foodstuffs.

The grain deal was hailed as preventing a global food emergency when it was brokered by the United Nations and Turkey last year, halting a de facto blockade of Ukrainian ports by Russia, which agreed to let ships pass after inspections in Turkey.

Global commodity food prices rose on Monday, though the increase was limited, suggesting traders did not yet anticipate a severe supply crisis. The Chicago Board of Trade’s most active wheat Wv1 contract was up 3.0% at $6.81-3/4 a bushel at 1056 GMT after earlier rising over 4%.

Putin had threatened last week to walk out of the grain deal, while also saying Russia could return to it if its demands were met.

“We can suspend our participation in the deal, and if everyone once again says that all the promises made to us will be fulfilled, then let them fulfil this promise. We will immediately rejoin this deal,” Putin said last week.

Western countries say Russia is trying to use its leverage over the grain deal to weaken financial sanctions, which do not apply to Russia’s agricultural exports.

European Commission President Ursula von der Leyen described Russia’s suspension of the agreement as a “cynical move” and said the EU would continue to try to secure food for poor countries.

WITHOUT RUSSIA?

Russia has agreed three times in the past year to extend the Black Sea deal, despite repeatedly threatening to walk out. It suspended participation after an attack on its fleet by seaborne Ukrainian drones in October, leading to a few days when Ukraine, Turkey and the United Nations kept exports going under the deal without Moscow.

Denys Marchuk, deputy head of the Ukrainian Agrarian Council, the main agribusiness organisation in Ukraine, said seaborne exports could proceed again without Russian agreement.

“If there will be safety guarantees from our partners, then why not conduct the grain initiative without Russia’s participation?” he told Reuters.

Any such resumption of Ukrainian sea exports without Russia’s blessing would probably depend on insurers. Industry sources told Reuters they were studying whether to freeze their coverage.

“Some underwriters will look to take advantage with a hefty increase in rates. Others will stop offering cover. The (key) question is whether Russia mines the area which would effectively cease any form of cover being offered,” one insurance industry source said.

The latest blast on Russia’s bridge to Crimea follows months of Ukrainian strikes on Russian supply lines as Kyiv pursues a counteroffensive to drive Russian forces out of its territory.

Unverified imagery showed a section of road on the bridge had split and was listing to one side, with metal barriers buckled. Dash cam footage showed drivers braking sharply shortly after the incident.

Russian officials said a Russian Su-25 fighter-bomber crashed into the Sea of Azov on Monday, but the pilot ejected successfully and there was no indication of an attack. The bridge to Crimea spans the mouth of the sea.

The Ukrainian counteroffensive, which began last month, has so far been slow going, capturing a string of small hamlets in the south and some territory around Bakhmut, the small eastern city Russia captured in May after the war’s deadliest combat. Kyiv said on Monday its forces had captured another 18 sq km of territory over the past week, bringing the total captured to more than 210 sq km.

(Reporting by Lidia Kelly in Melbourne, Guy Faulconbridge in Moscow, Max Hunder in Kyiv and Reuters bureau; Writing by Peter Graff; Editing by Philippa Fletcher)

USDA Allegedly Impacted by Russian-Speaking Hackers

Thu, 22 Jun 2023 17:04:38 GMT

USDA is investigating a possible data breach related to a broader hack of U.S. government agencies.

Officials in the Ag department say the data breach allegedly involves a contractor and impacts a small number of workers—roughly 30, which is a small pool considering USDA employees 100,000 people.

According to USDA, Russian-speaking hackers are the likely suspects and the department will contact and provide support to anyone affected.

The Office of Personnel Management and two organizations within the Department of Energy also were apparently targeted or breached.

Ag Trade Between Russia and China Increased to 153% in April

Tue, 30 May 2023 15:01:20 GMT

Russia and China are looking to increase their trade in ag goods, with Russian Prime Minister Mikhail Mishustin stating that Russian farmers are prepared to significantly increase exports to China.

Chinese Vice Premier He Lifeng also expressed China’s interest in enhancing industrial and agricultural cooperation with Russia. These comments were made during a bilateral business forum held in Shanghai.

Boom in Ag Trade Between Russia and China

Amid growing international isolation over the war in Ukraine, Russia is seeking to deepen its trade ties with China, which has refrained from joining the U.S.-led sanctions against Russia. This situation has led to a boom in trade between the two nations, with Beijing’s purchases of energy and aluminum surging due to sanctions restricting supplies to the West. Furthermore, China’s exports to Russia reached a record high in April, amounting to $9.6 billion, a 153% increase from a year earlier.

Related story: Why is China Suddenly Canceling Purchases of U.S. Corn?

While the western sanctions do not directly target food and fertilizers, there is considerable potential in these sectors. During the forum, wheat and meat shipments were reportedly on the agenda. This comes at a time when China is aiming to reduce its import reliance on crops like soybeans, primarily sourced from Brazil and the US, and needed to feed its substantial pork herds.

China’s Slow Transition to Russian Ag

Over the past year, China has increased its purchases of food items from Russia. For instance, Russian edible oils, primarily sunflower and rapeseed oils, constituted a quarter of China’s total imports in the first four months of the year, up from 13% a year earlier.

Related story: 5 Fundamentals That Could Still Rally Wheat Prices

However, wheat is an exception to China’s increased buying from Russia, Bloomberg points out. Despite a surge in wheat imports by over 60% to about 6 million tons in the first four months of the year, Russia only supplied 30,000 tons. Despite Beijing’s announcement last year that it would allow wheat imports from all parts of Russia, trade has been impeded by issues like phytosanitary regulations, transportation challenges, and geographic constraints. The primary wheat-growing area in Russia is located in the south, near the Black Sea, a considerable distance from China.

The 5 Fundamentals That Could Still Rally Wheat Prices

Tue, 23 May 2023 15:14:11 GMT

Last week was full of both bullish and bearish news for the wheat market. As winter wheat harvest begins across the country, one market analyst thinks the lower domestic wheat production also changes the dynamics in the wheat market.

While the Kansas Wheat Tour found a disappointing winter wheat crop , news of the U kraine Black Sea grain deal extension extended for two more months also hit the market.

The Black Sea grain deal was facing an uncertain outcome, as Russia demanded concessions in order to extend the deal, However, Turkish President Tayyip Erdogan said on Wednesday, one day before Russia could have quit the pact over obstacles to its grain and fertilizer exports.

This week, there’s a new twist. According to Ukrainian Prime Minister Denys Shmyhal, one of Ukraine’s Black Sea ports halted operations because Russia was reportedly refusing to allow ships through.

UKRAINE'S BLACK SEA PORT OF PIVDENNYI HAS HALTED OPERATIONS BECAUSE RUSSIA REFUSES TO ALLOW SHIPS THROUGH - UKRAINE DEPUTY MINISTER
— First Squawk (@FirstSquawk) May 23, 2023

At the same time, harvest is still a month away across parts of Kansas, and the Wheat Quality Council tour found an abandonment of 26.75% versus USDA’s current projection of 18.5%.

Arlan Suderman of StoneX Group says with all the news hitting the wheat market, risk management is vital this year, especially with both the downside and upside risks.

“Is the hard red winter wheat crop short? Absolutely it is. And it’s shorter than what the USDA indicated. It’s shorter than what the trade said,” says Suderman. “If you look at the six analog gears for crop condition ratings, five of those six years saw the hard red winter wheat crop gets smaller ahead of the final report on September 30.”

Suderman says while USDA’s crop projections could shrink, he says news of just how overpriced the hard red winter wheat is in the U.S. created a bearish sentiment last week.

“We have milling wheat from Europe coming into the United States, and it pencils out right into the interior of the United States. And so that is a big psychological impact on the market. It’s been going on for 90 days, but Bloomberg finally picked up the story and kind of woke up the market to the reality. And that pulled the legs out from underneath the only real bull story we had in the grain and oilseed complex right now,” says Suderman.

Can the wheat market still get rallies? Suderman says that’s certainly possible, but he says it now emphasizes just how much world markets matter in wheat. And he says it’s these five factors that will play into prices in the months ahead:

Whether it rains in Argentina so farmers can get their winter wheat crop planted.
Whether El Nino cuts the size of the Australian crop.
Whether it stays dry now in the U.S. spring wheat belt.
How dry it gets in Russia’s spring wheat belt.
Weather conditions in Canada’s spring wheat belt.

“All of those things matter a whole lot more now,” says Suderman. “So it’s possible, not necessarily that it will happen, but it’s possible that we could see a rally based on one of those factors.”

The United Nations said last week that the grain deal renewals, including the one last week, is helping stabilize the market and reduce volatility. The group noted that global food prices had fallen 20% since hitting all-time highs in March 2022.

BREAKING: Black Sea Grain Deal Extended for Two Months

Wed, 17 May 2023 17:35:53 GMT

The Ukraine Black Sea grain deal has been extended for two more months, Turkish President Tayyip Erdogan said on Wednesday, one day before Russia could have quit the pact over obstacles to its grain and fertilizer exports.

The flow of ships through the corridor had been grinding to a halt during the last few days with the deal apparently set to expire on Thursday.

Earlier on Wednesday, the last remaining ship registered to travel through the corridor had left a Ukrainian port. U.N. data showed the DSM Capella had left the Ukrainian port of Chornomorsk carrying 30,000 tonnes of corn and was on its way to Turkey.

“The Black Sea grain corridor deal has been extended by two months with the efforts of Turkey,” Erdogan said in a televised speech, also thanking the Russian and Ukrainian leaders and U.N. Secretary-General Antonio Guterres for their help.

A spokeswoman for Russia’s Foreign Ministry said they would be commenting later on the reported extension.

The United Nations and Turkey brokered the Black Sea deal for an initial 120 days in July last year to help tackle a global food crisis that has been aggravated by Moscow’s invasion of Ukraine, one of the world’s leading grain exporters.

Moscow agreed to extend the Black Sea pact for a further 120 days in November, but then in March it agreed to a 60-day extension - until May 18 - unless a list of demands regarding its own agricultural exports was met.

Open Questions

To convince Russia in July to allow Black Sea grain exports, the United Nations agreed at the same time to help Moscow with its own agricultural shipments for three years.

“There are still a lot of open questions regarding our part of the deal. Now a decision will have to be taken,” Kremlin spokesman Dmitry Peskov told reporters on Tuesday.

Asked on Wednesday about how the talks were progressing, Peskov told a briefing he would not enter into “hypothetical discussions” on what Russia would do if the grain deal lapsed.

Senior officials from Russia, Ukraine, Turkey and the U.N. met in Istanbul last week to discuss the Black Sea pact.

Turkish Foreign Minister Mevlut Cavusoglu said last week he thought the deal could be extended for at least two more months.

While Russian exports of food and fertiliser are not subject to Western sanctions imposed following the February 2022 invasion of Ukraine, Moscow says restrictions on payments, logistics and insurance have amounted to a barrier to shipments.

The United States has rejected Russia’s complaints. U.S. Ambassador to the U.N. Linda Thomas-Greenfield said last week: “It is exporting grain and fertilizer at the same levels, if not higher, than before the full scale invasion.”

Officials from Russia, Ukraine, Turkey and the U.N. make up a Joint Coordination Centre (JCC) in Istanbul, which implements the Black Sea export deal. They authorise and inspect ships. No new vessels have been authorised by the JCC since May 4.

Authorised ships are inspected by JCC officials near Turkey before travelling to a Ukrainian Black Sea port via a maritime humanitarian corridor to collect their cargo and return to Turkish waters for a final inspection.

In an excerpt of a letter seen by Reuters last month, Russia told its JCC counterparts that it would not approve any new vessels to take part in the Black Sea deal unless the transits would be done by May 18 - “the expected date of ... closure”.

It said this was “to avoid commercial losses and prevent possible safety risks” after May 18.

Some 30.3 million tonnes of grain and foodstuffs have been exported from Ukraine under the Black Sea deal, including 625,000 tonnes in World Food Programme vessels for aid operations in Afghanistan, Ethiopia, Kenya, Somalia, and Yemen.

(Additional reporting by David Ljunggren and Nigel Hunt; Writing by Michelle Nichols and Gareth Jones; Editing by Daren Butler, Mark Potter and Alison Williams)

Grains Reverse on Russia War News, But Is It the Bottom?

Wed, 03 May 2023 20:08:57 GMT

On Wednesday, wheat scores a key reversal after a drone strike at the Kremlin, which pulls corn and soybeans back higher as well. Will this bottom the grain markets? Will the Fed pause further interest rate increases to signal specs to get back into commodities? Plus, how much more will cattle correct? Ted Seifried of Zaner Ag Hedge has the answers.

Kansas Winter Wheat Crop Crippled by Drought that Covers 80% of the State

Tue, 18 Apr 2023 17:24:35 GMT

The drought situation across much of the Plains hasn’t improved this year; instead, the latest U.S. Drought Monitor shows it’s growing worse. Now, farmers across a state that typically accounts for 25% of the total winter wheat production in the U.S. are staring at a bleak picture for crop prospects this year.

Doug Keesling farms near Lyons, Kan. He would typically be planting spring crops in April, but because it’s so dry, he’s playing the waiting game and needing a little moisture before he plants.

The latest U.S. Drought Monitor released on Thursday shows 43% of the state is seeing the most severe level of drought. While some parts of the state are seeing the intense drought conditions, the dryness is extremely variable across the state.

“It’s amazing. If you go 30 miles east of me, it’s wetter than it is here. But if you go from here towards southwest Kansas, it’s as dry here as it is there, which is not what we’re used to,” says Keesling. “It’s been dry like this for almost a year.”

He says the variation in winter wheat crop conditions across even his own county is proof about how variable drought conditions are across the state.

“There was a lot of wheat that went in after fall crops, like after corn or soybeans, that did not germinate until later in the winter, because it was so dry,” he says. “Matter of fact, we had some wheat, that in severe cases, did not germinate until January or February when there was a light snow.”

USDA’s Crop Progress released on Monday showed 61% of the Kansas wheat crop is rated as being in poor to very poor condition.

For the week ending April 9, 2023, there were 6.6 days suitable for fieldwork, according to @USDA_NASS. Winter wheat condition rated 33% very poor, 28% poor, 26% fair, 12% good, and 1% excellent. Winter wheat jointed was 17%, near 19% last year and 20% for the five year average. pic.twitter.com/T2ZezFNiIY
— KansasWheat (@KansasWheat) April 10, 2023

Kansas Wheat says farmers across much of the state are worried about their wheat crop.

“Wheat is a pretty resilient crop, so it can hold on in some dry conditions. But especially as you get closer to southwest Kansas, a lot of it just didn’t emerge in the fall,” says Marsha Boswell, vice president of communications for Kansas Wheat. “Coming out of dormancy, it needs some moisture to start growing again, and it’s just not receiving any of the moisture that it needs.”

Back-to-Back Years of Drought

Boswell says while many farmers struggled through dry conditions last year, it’s the back-to-back years of dry weather that have been such a sharp blow to crops.

“Last year we were in a long-term drought, but what the difference is from last year is that subsoil moisture now is completely depleted. So last year in the drought, the wheat could pull from some of that subsoil moisture and go ahead and make a plant. It hasn’t been replenished, and there’s just no subsoil moisture there to pull from now.”

With sporadic chances of rain this weekend, many growers are holding onto hope at least some moisture will bring the crop out of such sluggish conditions. For some, it may already be too late.

“I was out and about and went to some areas in western Kansas, and I was told at that time that if they could get some moisture in the next week or two, this crop could pull out of this a little bit, but we haven’t seen that,” Boswell says.

The Wheat Quality Council will hold its annual wheat tour across Kansas in mid-May, a time when maturing wheat will give farmers and others a better estimate of the quality and quantity of this year’s crop.

“I think as we get farther to the west and up and around Colby that first night, and then that second day where we go from Colby to Wichita and through southwest Kansas, we’re really going to see some tough conditions and some abandoned fields,” Boswell says.

Snapshot of National Winter Wheat Crop Conditions

Nationally, USDA’s Crop Progress report showed only 27% of the country’s winter wheat crop is rated good to excellent.

“This is probably one of our weakest crop progress reports for conditions in 40 years,” says Ben Brown, agricultural economics Extension specialist for the University of Missouri. “I mean, this is tied with 1996 in some states, and 1996 was a pretty poor year for wheat producers.”

University of Missouri Extension economist Ben Brown says the eastern half of the country is seeing strong wheat conditions, with more farmers in states like Illinois, Ohio and Michigan potentially taking that crop to harvest instead of only using the wheat as a cover crop during the winter months.

“On the other side of the scale, I wouldn’t be surprised to see some pretty strong abandonment in places like the panhandle of Texas, Oklahoma, and southwest Kansas,” says Brown. “Just too poor of conditions. Maybe there will be the opportunity to plant another crop in there and hope for some rainfall later in the season.”

Possible High Abandonment of U.S. Winter Wheat

Keesling isn’t sure how much of his crop will need to be abandoned, as he says it’s just too early to know. Across the state, severely drought-stricken fields aren’t showing much promise, and the likelihood is growing that more winter wheat fields won’t be harvested this year.

“I think there’s no question there’s going to be some abandonment, probably higher than in a lot of years, because the wheat just isn’t up and it’s not growing,” says Boswell.

What makes that reality so hard is the current price of wheat, even if some question whether today’s prices truly reflect how bad this winter wheat crop really is.

“I think there’s an understanding that yes, we’re dealing with less room to spare here, if you will, but we’ve still got a pretty healthy global wheat picture, even with some of these challenges here in the United States. And then certainly with the continued challenges in the Black Sea Region,” says Brown. “So, understanding all those conditions, as well as kind of what’s weighing on some of this market a little bit.”

The Black Sea Wild Card

The future of the Black Sea Grain Initiative is currently very murky. The Russian ag minister says Russia won’t renew the grain deal until the West’s sanctions on Russian food and fertilizer are lifted.

According to Farm Journal Washington Correspondent Jim Wiesemeyer, senior Russian diplomat Mikhail Ulyanov commented on the situation on Friday, saying the West still has time to remove “obstacles” hindering the implementation of the Black Sea grain deal before a deadline set for May 18.

“Every time we’ve seen this kind of come around, and these flares that it doesn’t look like the grain deal is getting renewed, we’ve seen a 25- to 50-cent rally in the wheat market. And that’s just kind of the nature of the game right now,” says Brown.

Focus on Producing a Crop Through the Drought

As Kansas farmers work to provide the wheat needed for the rest of the world, Keesling says the reality is tough, but the drought hasn’t completely wiped out hope of producing at least some type of crop this year.

“Farmers, as a whole, have a lot of faith that there will be rain,” he says. “And so, I’m trying to be as optimistic as I can be even though sometimes some of these crop conditions behind us don’t always look it. We have faith that we will get rain and that something will turn around.”

What’s the Latest with the Black Sea Grain Deal?

Mon, 17 Apr 2023 17:38:19 GMT

Wheat and corn exports out of the Black Sea region are at risk again. Ukrainian officials say Russia’s recent actions to block inspections of ships under the Black Sea grain initiative means the grain deal is facing a murky future. That’s as the area was still able to see record wheat exports over the past year, despite the war, largely thanks to the grain deal ensuring grain exports continued to flow out of the area.

According to Farm Journal Washington correspondent Jim Wiesemeyer, the situation is growing more tense. Wiesemeyer says Ukraine’s restoration ministry is now saying the Black Sea grain initiative is in danger of being shut down after Russia again blocked inspections of ships under the deal.

“For the second time in nine months of operation of the Grain Initiative, an inspection plan has not been drawn up, and not a single vessel has been inspected. This threatens the functioning of the Grain Initiative,” the restoration ministry said.

Wiesemeyer reports Russia is now saying an extension of the deal is “still not that rosy,” as it reiterated the need to improve conditions for exports of its grains and fertilizers. More in Russia/Ukraine section.

Russia Blames the West

The recent developments come as earlier this month, the Russian ag minister says Russia won’t renew the grain deal until the West’s sanctions on Russian food and fertilizer are lifted. Even senior Russian diplomat Mikhail Ulyanov commented on the situation on Friday, saying the West still has time to remove “obstacles” hindering the implementation of the Black Sea grain deal before a deadline set for May 18.

Upcoming Crop at Risk

Kremlin Now Says Outlook for Black Sea Grain Deal is 'Not so Great'

Wed, 12 Apr 2023 13:37:19 GMT

The Kremlin on Wednesday said the outlook for the landmark U.N.-brokered Black Sea grain deal was not great as promises to remove obstacles to Russian exports of agricultural and fertilizer exports had not been fulfilled.

The grain deal is an attempt to ease a food crisis that predated the Russian invasion of Ukraine, but has been made worse by the most deadly war in Europe since World War Two.

The agreement, due to expire next month in its current form, was first signed by Russia, Ukraine, Turkey and the United Nations in July last year and twice extended. On paper, it allows for the export of food and fertilzser, including ammonia, from three Ukrainian Black Sea ports.

While the West has not placed sanctions on Russia’s food and fertilizer exports, Moscow says they are compromised by obstacles - such as insurance and payment hindrances - that it says must be removed for the deal to work properly.

Kremlin spokesman Dmitry Peskov said on Wednesday that the current agreement was not working for Russia, despite some efforts by the United Nations to get the parts of the deal relating to Moscow’s interests implemented.

“No deal can stand on one leg: it must stand on two legs,” Peskov told reporters. “In this regard, of course, judging by the state of play today, the outlook (for its extension) is not so great.”

Russia and Ukraine are two of the most important producers of agricultural commodities in the world, and major players in the wheat, barley, maize, rapeseed, rapeseed oil, sunflower seed and sunflower oil markets. Russia is also dominant on the fertilizer market.

More than 27 million tonnes of grain and other foodstuffs have been exported from Ukraine aboard 881 outbound vessels since the Black Sea Grain Initiative began in August, official data shows.

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Kansas Winter Wheat Crop Crippled by Drought that Covers 80% of the State

“It’s amazing. If you go 30 miles east of me, it’s wetter than it is here. But if you go from here towards southwest Kansas, it’s as dry here as it is there, which is not what we’re used to,” says Keesling. “It’s been dry like this for almost a year.”

He says the variation in winter wheat crop conditions across even his own county is proof about how variable drought conditions are across the state.

Back-to-Back Years of Drought

Snapshot of National Winter Wheat Crop Conditions

Possible High Abandonment of U.S. Winter Wheat

The Black Sea Wild Card

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Focus on Producing a Crop Through the Drought

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