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Limit Up

By Tori Uhland

November 2, 2022

The major headline over the weekend was Russia’s announcement to withdraw from the grain export corridor agreement. Wheat futures shot up overnight with corn and soybean futures following. The trade had been expecting some type of disruption which limited gains. This story will continue to develop and markets will remain volatile as there is a lot of conflicting information. Both the UN and Turkey say that agriculture product shipments will continue but there is still risk premium being added to the market.

High prices have a way of curing themselves–as our prices get higher, we become less competitive in the world market which means less demand for our products.


Corn markets were feeling pressured early last week by good harvest progress and poor exports. Futures have been range-bound, trading in a 16 cent range, with low export demand, low supply, and the current economy. Barge freight costs remain high and Mississippi river levels remain low; 6 days in October registered in the top 10 days in 90 years of history of the lowest gauge readings ever on record. The other 4 readings were from 2012, 2003 and 1939. Corn movement by barge in October is down 36% from last year. Brazil’s corn remains at a significant discount to U.S. corn which is hurting our export program. China reported their September corn imports at a level that was 57% below its September 2021 imports. Delayed demand may turn into lost demand. The only grain that China is importing that isn’t down from last year is milo; their sorghum imports in September were up 42% from last year and their year-to-date imports are up 21%.

Another story to keep watching is the potential rail strike. Last week, a second railroad union voted down the deal with the government. This increases the likelihood that agriculture product transportation will grind to a halt for at least a short time in November. At least 24% of the grain in the US travels by rail and 36% of exports are done by rail.


The wheat gapped higher at Sunday night’s open after Russia announced over the weekend that they are withdrawing from the Ukraine grian corridor agreement to ensure safe passage of Ukraine grains. All last week it was thought that the agreement would likely be extended, but Russia has accused Ukraine of a massive drone strike on its fleet in Crimea. The question is if Russia is doing this to gain more leverage in negotiations to get sanctions dropped or to force importers to buy Russian. Russian wheat has still been the cheapest in the world and US wheat continues to price itself out of the market.

Ascot, a London-based company that has insured the grain cargoes in the Black Sea, will be pausing on writing any new coverage for the grain shipments until they can better understand the situation. If shipping companies can’t get coverage on new vessels, that will be another factor impacting the grain export agreement.

The first winter wheat crop condition rating of the season came out on Monday afternoon. Winter wheat conditions were rated at 28% Good/Excellent versus 41% expected and 45% last year. In 2012, the initial Good/Excellent crop rating was 40% when 72.79% of the United States was in a drought. Last week’s monitor shows 84.46% of the United States is currently in a drought.


There were several supportive factors in the soybean market but the overall concern for China’s import demand is overshadowing most of that. China’s currency shot to new record lows against the USD. Their supply is tighter while import commitments are lower and their purchase pace is sliding below average. River logistics are also hurting soybean demand.


Basis is still historically strong but slightly softer as harvest progresses and eases some of the pressure.

Cattle & Hogs

Cattle markets are lower to start the week as corn is higher. For the last two months, slaughter volumes have exceeded the prior year each week, but this will be hard to sustain as fed numbers decline and processing margins are threatened. Replacement cattle may become more expensive and declining numbers will result in smaller feedlot numbers. High feed cost, skyrocketing interest rates and elevated replacement cattle costs are diminishing profit margins and changing trading patterns.

Other News

The USDA will release the November World Agricultural Supply and Demand Estimates (WASDE) report on November 9.

If you have any questions, comments, or topics you’d like to discuss, please let me know! You can reach me by email at This email address is being protected from spambots. You need JavaScript enabled to view it..