Rejeana Gvillo

Executive Summary FBN® polled members in the second half of December into early January, asking how many acres of winter wheat were planted in the fall of 2022 and the fall of 2021.  Responses totaled 325 across winter wheat producing states with results pointing to a boost in planted area, year over year. Planted area increases are estimated for SRW and HRW with all US winter wheat planted area seen up 900,000 acres at 34.2 million for 2023/24 versus plantings for 2022/23. USDA is set to release its January Winter Wheat and Canola Seedings report on January 12.  Last year, USDA’s initial estimate for US winter wheat planted area came in at 34.4 million acres; revisions followed with the actual estimate dropping to 33.3 million acres per the Small Grains Annual Summary . Survey Data Point to Highest Winter Wheat Area in Years Our team surveyed FBN members starting in late December about winter wheat planted areas. We asked what was planted in 2022 for harvest in 2023 and what was planted the year before. A total of 325 responses were received. We also asked members what percentage of each class of winter wheat was planted. At the national level, these are FBN ’s estimates of US winter wheat planted area for the 2023 harvest. US Winter Wheat Plantings for 2023 Harvest (Million Acres) Wheat FBN 2023 USDA 2022 Change Winter Wheat 34.2 33.3 +0.9   HRW 23.5 23.1 +0.4   SRW 7.05 6.6 +0.5   Winter White 3.6 3.6 0 Source: FBN /USDA; totals may not add due to rounding. Planted Area Estimate Falls Shy of Price-Model Indicators Winter wheat futures have been volatile for the 2022 calendar year, with a lot of that tied to the situation in the Black Sea. The price signals to producers have been to increase planted area, which is what our survey results showed. Looking at Kansas City futures specifically, the projected price - used in insurance policies - averaged at its highest level in nearly a decade. And when looking at new-crop futures and their relationship with planted area, prices indicated that planted acres would be close to the 35.2 million acre mark, which aligns directionally with our bias, but points to more area than what producers indicated per our survey results. Conditions Ahead of the Dormant Season Crop conditions heading into the dormant season left much to be desired. The prolonged drought in the US Southern Plains weighed on conditions in the fall. The latest reading was an improvement, but as the chart shows, conditions for the crop overall were low versus recent history. The good news is that despite these poor ratings heading in the dormant season, there is no clear conclusion that yields will be negatively impacted. For more details, please read this report published in November. Our research suggests that the condition ratings in the fall do not paint a picture of a crop failure in the spring. Spring weather will be key in determining yields. Double Cropping Intentions In the survey, we asked producers how many acres would be double cropped this year and how many were last year (soybeans following winter wheat). The survey pointed to no significant change to double cropped percentages in 2023 versus 2022. Double cropped acres have dropped significantly versus the highs hit with a lot of that tied to fewer acres of wheat being planted.  In 2013, SRW planted area topped just over 10 million acres whereas in 2022, acres were 6.6 million.  But with SRW wheat acres set to be up, double cropped acres could be up marginally as well too. Recommendations Ahead of this report, our recommendations to producers were to be collectively 30% sold on winter wheat. We issued recommendations on February 23, 2022, August 31, 2022, and September 29, 2022 for HRW and SRW. Each recommendation was to sell 10%. The average price we are sold at now is $9.08 for HRW (off Kansas City July 2023 futures) and $8.71 for SRW (off Chicago July 2023 futures).  Based on this acreage report, we are not in a rush to push more on coverage. However, we do encourage producers to get to our recommended level of percent sold. Given that price models indicated a higher plated area total, we could be underestimating planted area. Also, USDA’s initial acreage estimate in 2022 was notably larger than the final, and if that pattern were repeated again this year, new-crop futures could be impacted negatively.  FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory - NFA ID: 0508695 Disclaimer : The views and opinions are solely those of the author as of the date of publication, are subject to change at any time due to market or economic conditions, will not be updated or supplemented after the date hereof and may not necessarily come to pass. The views and opinions expressed herein do not reflect those of all personnel at FBN BR LLC (FBN) or the views of the Farmer's Business Network Inc. as a whole. Commodity trading, including futures, hedging and speculating, involves substantial risk of loss and may not be suitable for all investors.   All information, publications, and reports, including this specific material, used and distributed by FBN BR LLC shall be construed as a solicitation. The information and data provided comes from sources believed to be reliable but FBN BR LLC does not guarantee its accuracy or completeness. Past performance is not necessarily indicative of future results.  FBN makes no representations, warranties, or guarantees as to this content. Copyright © 2014-2023 Farmer's Business Network, Inc. All rights Reserved. "Farmers Business Network," "FBN," and "Farmers First" are registered trademarks of Farmer's Business Network, Inc. All other trademarks are the property of their respective owners.

In February 2021, much of the continental U.S. faced temperatures that were below 0° Fahrenheit. Frigid temperatures were reported into northern Mexico. Parts of Texas were so cold that its power systems were tested and many went without power for a time. Unofficially referred to as Winter Storm Uri, the storm cost Texas agriculture at least $600 million. In the coming days, much of the U.S. and Canada is forecast to have a burst of cold temperatures. This week, we examined what happened in February 2021 to prepare for what could be coming. U.S. Ethanol Production Dropped Significantly The U.S. ethanol sector was directly impacted from the frigid temps, which largely shut down portions of the U.S. that week. Weekly ethanol production slipped to its lowest level since COVID, but excluding that time period, production was at its lowest level during the cold burst in over a decade. Stocks also slipped that week with the production slowdown a plus and, in subsequent weeks, stocks more or less continued to dwindle for a time. Canada’s February Canola Crush Came in Lighter than Expected Canada’s monthly canola crush volume for February also slipped. Usually, February is a light month given there are fewer days, but in 2021, January and March volumes far exceed February's total, with our opinion that the surge in frigid temps limited Canada’s crush in February 2021. Forecast Shows Coldest Day for U.S. as December 23 The forecast calls for colder than normal temps across the U.S. and Canada starting December 22 and lasting for a few days. Specifically, December 23 shows that most counties will experience below-freezing temps that day. But the current outlook is not as cold as far south as the storm we faced in February 2021. Even better news for the farmer is that despite the wintry storm in February 2021, U.S. average basis levels for corn, soybeans - and specifically at ethanol and crush facilities - did not dip in any magnitude. In fact, basis was moving higher before and continued to do so after the cold weather blast in February 2021. Canada also is set to have frigid temps with the coldest days expected for December 22 and 23. That could slow down crush activity, especially ahead of the holiday season. We are not overly concerned about a big loss in crush opportunity given the weather forecast, but December could come in slightly below expectations if these frigid temperatures do materialize. FBN®'s Take on What it Means for Farmers The cold temperatures in the forecast could negatively impact U.S. ethanol production and/or U.S./Canada crush for December, but based on what happened in February 2021, big negative impacts to grain producers due to the weather is not likely. Livestock producers may face the toughest headwinds with keeping animals healthy and warm enough during the cold weather. Being that the coldest temps are set for the weekend and into the holiday season, extreme losses in grain activity are not expected. FBN Market Advisory services, including FBN Market Intelligence, are offered by FBN BR LLC - NFA ID: 0508695. The risk of trading futures and options can be substantial and may not be suitable for all investors. We do not guarantee customers will receive specific benefits or value from participating; results will vary and may result in loss. All information, publications, and reports, including this specific material, used and distributed by FBN BR LLC shall be construed as a solicitation. FBN BR LLC does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This newsletter contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by FBN BR LLC. Past performance is not necessarily indicative of future results. For the purposes of quality assurance and compliance, phone calls to and from FBN BR LLC may be recorded. Copyright ©2022 FBN BR LLC. All rights reserved. The sprout logo, "FBN" and "Farmers Business Network" are registered trademarks or service marks of Farmer's Business Network, Inc.

[FBN Members: Click here to access the November 2022 U.S. Corn & Soybean Yield Forecasts Report ] [Not an FBN member yet? Click the link above and create a free FBN account to unlock the report.] On October 12, 2022, the USDA released their most recent Crop Production report. Based on initial survey-based U.S. corn and soybean yields, their results forecast U.S. corn yield to be 171.9 bushels and 49.8 bushels for soybeans. FBN®’s forecast was higher at 173 bushels per acre for corn but slightly lower for soybean bushels at 49.7.  This is down compared to 2021 yields of 177.0 bushels of corn 51.4 bushels of soybeans.  The USDA’s next report is slated for November 9, 2022 and will be the final report for the calendar year with next year’s yield estimates to be released on January 12, 2023.  Will yield increase or decrease compared to last month’s estimations? Click here to unlock the FBN Research team’s predictions in our latest report, free for FBN members .  [Not an FBN member yet? Click the link and create a new member account to access the report.] FBN yield forecasting The FBN Research team has been processing and analyzing data since the combines started rolling this season. We have collected 3,816 farm yield observations for corn and 1,954 for soybeans. We anticipate that data collection is close to or slightly above the halfway mark.  In our latest report, FBN will continue to predict both U.S. corn and soybean yield ahead of USDA’s report. We will also look at how FBN’s forecasts have historically presented low yield errors compared to other published predictions.  Unlock the Report Find out more by signing up to become an FBN member and downloading the November 2022 U.S. Corn & Soybean Yield Forecasts Report. By becoming an FBN member , you'll join a global network of farmers — 48,000+ strong and growing — who are already taking advantage of the opportunity to reduce their production costs and maximize the value of their crops.  You’ll also have access to unique insight from experts in the latest FBN Research publication for free in the Reports section of the FBN app. FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory - NFA ID: 0508695 Disclaimer : Commodity trading, including futures, hedging and speculating, involves substantial risk of loss and may not be suitable for all investors.  All information, publications, and reports, including this specific material, used and distributed by FBN BR LLC shall be construed as a solicitation. The information and data provided comes from sources believed to be reliable but FBN BR LLC does not guarantee its accuracy or completeness. Past performance is not necessarily indicative of future results.  FBN makes no representations, warranties, or guarantees as to this content. Copyright © 2014-2022 Farmer's Business Network, Inc. All rights Reserved. "Farmers Business Network," "FBN," and "Farmers First" are registered trademarks of Farmer's Business Network, Inc. All other trademarks are the property of their respective owners.