USDA Report Today Russia and Ukraine Impact? Gordy [Listen]
Going into the March USDA Supply Demand Report this morning at 11:00 corn was trading around 10 cents lower and beans were about 10 cents higher. At about 11:30 corn was 14 cents lower and beans 7 cents lower. When I actually see the report there are two numbers I look for first, the national projected cash price for corn and beans. If they are increased the USDA's view is friendly or lower than bearish.
In this morning's report the USDA increased the National Average cash price of corn by 20 cents a bushel and beans were increased by 25 cents a bushel. So, why did prices go much lower after the report was released? I suspect because the USDA did not drop production as much as traders expected from the Russia, Ukraine and the Black Sea region?
With shipping shut down in all of the Black Sea ports because of the war, plus the questions about if crops will be planted in Ukraine this year how could we not get a very bullish report from the USDA? Remember, their season is like ours so their planting season is rapidly approaching. Remember, about 30 percent of the world demand for wheat comes from that region and 12 percent of the corn.
About an hour after the report was released I read on Pro Farmer the following note from the USDA at the top of the report: "NOTE: Russia's recent military action in Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally. The March WASDE represents an initial assessment of the short term impacts as a result of this action."
I guess that explains why the USDA did not increase the U.S. export demand to make up for the shortfall from the Black Sea Region. Plus why production was not dropped even more? Click on the link and listen to Gordy from Chiodo Commodities discuss this morning's USDA report.
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