May Chicago wheat finally traded overnight.
May Chicago wheat futures had traded up the daily limit six days in a row, and on the seventh day, it rested, releasing the trapped shorts and creating a massive record volatile trading range of $1.61. It opened on the high tic and plummeted its range for the day before stabilizing within an hour. May corn and soybeans also had moved lower initially with wheat and stabilized from early heavy losses.
Ahead of Wednesday’s USDA crop report, May soybeans are struggling at $17.00 and May corn near $7.80, which are now consolidating, waiting for the data release. But, more importantly, validity to Brazil’s crop, traders are waiting on CONAB, which releases their data Thursday at 6:00 a.m. Chicago time. If CONAB places the Brazilian crop below 121 MMTs, it’ll spark significant potential for Chinese exports of soybeans from the US in the current and 2022/23 crop year.
As expected, cash bids are sharply higher for grains, with China boosting its import demand. Corn in Brazil is at record highs near $8.70/Bu. The trade is pricing grains with the prospect that even new crop supplies out of the Black Sea region will not be available almost the entirety of the new crop year for 2022/23. The sleeper for new crop pricing is sunoil values, as 78% of the world’s sunoil exports come from the Black Sea region. Winter wheat represents 95% of Ukraine’s wheat crop, and it’s the spring planting of corn, barley, and sunoil production which is becoming a new concern if military operations continue beyond another two weeks. Ukrainian farmers are vowing not to be deterred in planting, it’s the availability of necessary supplies, with an estimated 70-80% of needed seed and fertilizer already on the farm. It’s the remaining balance that is the logistical concern for planting.
Russian oil exports have yet to be banned, as Germany continues to argue for leaving energy sanctions out of the mix, as over 40% of natural gas supplies for Germany come from Russia. It’s the wrong time of the year it appears, for the convenience of escalating sanctions in the energy sector. Crude oil pricing this morning is trading in the 123-124 price range awaiting further details. Just a reminder to the American population, the Keystone pipeline would have moved 1 Mil barrels of crude oil through the US, and Russian exports to the US are 600,000 barrels. The Keystone pipeline could’ve been considered a national security but was ignored by the current administration.
South American weather continued to produce soaking rains are crossed and Argentina and S Brazil on Monday with totals of .5-2.50”. High temps range in the 70s across S Argentina to lower 100s across Paraguay and S Brazil. A high-pressure ridge that has been over and E Brazil is now starting to weekend to prior days and is allowing needed rains into central Brazil. The lack of extreme heat for late maturing beans and Brazil’s winter corn crops with highs in the 80s to mid-90s and improved rainfall are helping to improve Brazil’s winter corn crop.
Cattle futures closed strong on Monday, and boxed beef values broke a long run of lower closes. Seasonally boxed beef prices turn higher this time of year into spring. The choice cutout gained $0.38, and the select value rose $1.81. The choice/select spread narrowed to $4.49 choice premium. It was a quiet day for cash cattle markets but over 700 had moved in Nebraska at $138, which was $2.00 lower from last week. Deferred cattle have not fallen nearly as far as the nearby market. August live cattle found support near its 200-day moving average. This is key for feeder cattle bottoming with surging feeder costs being maintained. 132.00 is a major weekly chart pivotal number for live cattle.