Putin is unhappy Ukraine's grain not going to poor countries.
After a weak evening session, grain futures surged in the night as Pres. Putin voiced his concern that most of the Ukrainian grain export of the date has been going to EU countries and other Western nations, not the poor African or SE Asian countries that are facing dire shortages and starvation. Putin wants a full review of the Black Sea Grain Export Corridor Pact and wants to hold grain flow to the EU and other Western nations.
Putin also commented that Russian grain exports are not leaving their ports unfettered and are being hobbled by the West’s economic sanctions. Sergey Lavrov stated this on Monday. Russia has grown abundant crops for export and will likely in any export quotas on corn/beans. If the Russian 2022 wheat harvest is as large as 94-97 MMTs, Russia will not place an export quota on wheat either. And not food grains for humans. Ukrainian wheat exports were only now starting to pick up. Ukraine needs to export corn due to tightening storage availability with a soon-to-harvest new crop corn. The EU wants feed grains following their dire summer drought. Putin is targeting the EU/West and is weaponizing oil/grain.
The August data is in, and China imported just 7.88 MMTs of world beans due to slowing demand to their lockdowns and high prices. A year ago, China imported 9.5 MMTs, with this year’s August import total being the lowest since 2014. It’s possible that USDA’s export pace for China imports may be overstated and could be reduced in upcoming supply/demand tables.
The Central US weather has a Ridge/trough pattern holding into the weekend with additional dry weather across the Western and Central US. A pattern change occurs after September 12, producing a potentially more normal rainfall pattern with seasonal temperatures. No frost/freeze risk is noted into September 20. With the start of the season, Gulf hurricanes remain absent, but activity has dramatically increased in the Atlantic, where storms will be monitored.
Live and feeder cattle had follow-through buying on Monday from Friday strong technical performance. This morning’s opening is anticipated to be steady, with a potential weak tone in the feeder cattle due to overnight feed grain strength. Cash cattle trade is quiet to start the week, while Packers will be looking to book inventory at lower prices amid weakening margins and the seasonal trends, which are typically bearish after Labor Day for a few weeks. Feedlots are pricing their cattle $1-3 higher. With favorable weather across the US over the holiday weekend, beef moving is thought to have been strong. Box beef values were firm on Monday, with choice gaining $1.05 and select higher by $0.72.