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Corn Outlook:
Russia invading Ukraine is not great a surprise and raises questions as to what happens next. Ukraine accounts for 16.4 percent of the world’s corn exports, while Russia is only 2.2 percent. Sanctions have been implemented, but it is doubtful they will work, as they were not effective when placed against Russia after they invaded Crimea in 2014. Meanwhile, another worry is whether China looks at the situation as a green light to act against Taiwan. If that occurs, it will be interesting as how the Biden Administration reacts as China is the number one buyer of our grain. Be advised that China’s intent is to challenge the U.S. for world leadership and dominance. In other matters, export inspections last week were a marketing year high of 62.0 MB with China taking 36 percent of these shipments. Meanwhile, their overall pace continues to climb. That said, China may not act against Taiwan until their needs are met. They are very calculating and patient.
Bean Outlook:
Weather in Brazil is taking a backseat to developments in Russia and Ukraine, but it is not totally out of the picture. Conab is conducting a crop survey in southern Brazil to more accurately assess the damage to the soybean crop caused by the drought. It should be finished by the end of February. Looking at exports, inspections last week were below the previous week at 35.8 MB with China taking 31 percent of shipments. However, since early November the pace of shipments to them has fallen 64 percent. As mentioned in previous comments, the decline can be between 65-85 percent.
Wheat Outlook:
Wheat is being lifted from the escalation of the conflict between Russia and Ukraine. Concerns are that it could lead to a disruption of exports. Ukraine accounts for 11.6 percent of global exports while Russia is 16.9 percent. Nations in Africa would likely be affected the most as they import large quantities of wheat from both Russia and Ukraine. Meanwhile, China could benefit as they are establishing closer ties with Russia. Looking at U.S. exports, inspections last week were a marketing year high at 19.8 MB. Since early January, the pace has consistently risen.
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