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Grain Comments: 03-15-2023

Good Morning

Grains are lower as outside markets sell off led by European Banks. The Dow Jones is down over 500 points at the time of writing.

CPI numbers released on Tuesday showed consumer prices 6% higher in February 2022 vs. February 2021—down from 6.4% year over year in January. Prices increased 0.4% from January to February. The 40 year high was set in June at 9.1% year over year.

The U.S. government is guaranteeing all deposits at Silicon Valley Bank and Signature Bank. President Biden says he will ask federal regulators and Congress to tighten rules on banks to lessen the chance of failure. Companies like Etsy and Roku had deposits in SVB.

Drier conditions are expected in Parana and Mato Grosso do Sul next week assisting with the planting of the Safrinha corn crop. Showers in Argentina this week are too late—heat and drying continue to damage crops.

As we move into March more market attention is being placed on spring weather outlooks. For the most part conditions across the United States are expected to be cool and wet for the start of the planting season. There are two areas of concern that are starting to receive more attention: the Upper Plains and the Southeastern US. Both of these areas are expected to see excessive spring moisture and the potential for flooding. To see planting delays in these areas would not come as a surprise, especially in the Dakotas and Minnesota given current outlook models. If these forecasts do not change, we may start to see corn acreage expectations lowered, regardless of market economics. These elevated water levels are already starting to impact our export market. High water is already limiting barge movement and as snow melts and river levels rise, we will see more disruptions. This is already starting to affect our exports with more interest being shown in Pacific Northwest offers than those from the Gulf. This really is not a surprise though as loadings out of the PNW are the most affordable and most competitive with South America.

Have a great day!

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