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AgriVisor Morning MarketWatch

 
Wednesday, January 26, 2022
The US acreage debate is already starting to heat up. This started last week when a well followed firm predicted US soybean acres will be greater than corn for just the second time in history. This group is predicting a 6% increase in US soybean acres, mainly from the high price of inputs on corn, with fertilizer being the primary one. While fertilizer values are in fact elevated form last year, many producers across the United States have already applied their corn fertilizer as they were concerned with availability this spring. Many producers are also claiming that even with elevated fertilizer costs their projected return on corn is higher than on soybeans which may limit any shifting. Aside from inputs there are several other factors that will impact next spring’s acreage, including local demand, weather, and crop rotations. Historically farmers do not alter their rotations regardless of economics. The most shifting in acreage tends to be in fringe areas where farmers have more crop choices, including wheat. Given the current economics on wheat we could easily see that crop take more corn acres than soybeans. Trade will continue to closely monitor developments in the Black Sea today, mainly if any action including possible sanctions is taken with Russia.  

Highlights
* Argentina needs more rain soon 
* Paraguay driest in 35 years
* Labor issues continue to impact global logistics
* Low water/icing hamper US river movement  
* Global logistics to improve my Mid-February  
* Brazil harvest pace gaining momentum
* Yields remain highly variable
* Managed money flow remains mixed       
* US feed grain demand is high
* Developments in Black Sea benefit US 

Corn
* Farmer movement increases
* Export interest is routine
* Canada buying more US corn
* US export pace remains slow 
* High weekly ethanol use expected 
 
Soybeans
* Arg farmers not cutting back on acres 
* Global veg oil production rising
* World veg oils expected to soften     
* Brail farm sales are light  
* China showing late-summer interest    

Wheat
* Black Sea politics support futures
* World milling supply contracts
* Feed wheat still displacing corn 
* Trade questions global expansion 
* Wheat following US dollar
  
Livestock
* Cattle slaughter -6% on the year  
* Yearly hog slaughter -8%    
* Cash cattle trade is light  
* China continues to buy US beef
* China accounts for 20% of US beef sales

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