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March 9th - Closing Market Commentary

03/09/2022
March 9th - Closing Market Commentary

Grains closed mostly lower on Wednesday:

May Corn – 20 cetns/bu (7.33)

May Soybeans – 18 cents/bu (16.71)

May Chi Wheat – 85 cents/bu (12.01 ½ )

Cdn $ +0.00435 (78.005 cents)

WTI Crude Oil -14.94/barrel (108.76)

Another extremely volatile day of trading today, as the release of the USDA March Supply and Demand report and rumors surrounding the Russian/Ukrainian war spurred the market lower.  Late in the trading session, there were unsubstantiated rumors that the Ukraine might be nearing some sort of agreement with Russia.  There are no details available whatsoever, but even the suggestion of some sort of compromise was enough to pressure wheat, corn, and crude oil values.

What we do know this afternoon is what the USDA numbers released at noon ET tell us.  While the data ultimately came out close to the average trade guesses for the most part, there was no wildly bullish information contained in today’s reports.  We have rallied a LOT in recent weeks on obvious Black Sea war concerns, but also on the belief that South American production shortfalls would lead to huge increases in USA grain exports.  While those exports could still happen, today’s USDA projections did not foretell increased exports to the degree that market bulls were hoping for. 

Highlights of the USDA report included:

Raised USA exports of old crop corn by 75 million bushels, and raised ethanol usage by 25 million bushels

Raised USDA exports of old crop soybeans by 40 million bushels

LOWERED USDA exports of old crop wheat by 10 million bushels

Cut Argentine corn production by 1 million tonnes and soybean production by 1.5 million tonnes

Cut Brazilian soybean production by 7 million tonnes, but left corn production unchanged

On the demand side, USDA cut global soybean crushing by 5 million tonnes (Chinese imports down by 3 million tonnes)


Today’s weekly Department of Energy petroleum statistics showed that ethanol production increased by 31 thousand barrels per day to 1,028 million barrels per day last week.  At the same time however, ethanol stocks grew once again by 338,000 barrels to 25,271 million barrels (another record high for this time of year).  While the USDA raised it’s projected ethanol consumption of corn by 25 million bushels today, many analysts are questioning if the demand for gas in the US will justify further increases as the price at the pump continues to skyrocket for USA motorists.

May and July wheat futures closed locked limit down on Wednesday, with synthetics showing May trading a further 50 cents/bu lower at one point today.  Wheat limits are expanded to $1.30/bu again tomorrow…..the wild ride continues.  The USDA cut world wheat exports by 3.6 million tonnes in their numbers today (of which Ukraine was 4 million).  However, world wheat production was 2 million tonnes higher than last month’s forecast, with Australia showing bigger production numbers.  Lower overall wheat demand actually allowed global wheat stocks to INCREASE by 3.3 million tonnes.

USDA announced Flash Export sales as follows today:

  • 100,000 tonnes of corn to Columbia
  • 20,000 tonnes of soybean oil to Unknown Destination

On the day Wednesday, funds were believed to have been sellers across the board, liquidating an estimated 20,000 corn contracts (now long 337,000), 10,000 soybean contracts (now long 156,000), and 20,000 Chicago wheat contracts (now long 11,000).

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