The grain trade is higher again this morning, led by wheat and soybeans, while corn also presses new highs. There is no solution to the Black Sea conflict, and we even have Russia now threatening the UK as they build cruise missiles for Ukraine. Cash traders are now waking up to their shortsightedness. For the last month, they’ve been selling every rally, work the carry, and keep telling everyone there is plenty of grain around. There is plenty of wheat in the world, but it’s the dislocation and unavailability of roughly 15 MMT of Black Sea wheat that buyers will not have access to. Also, just because India says they have wheat for export, doesn’t mean anyone will buy it at this time. Their prices are still elevated and well above the world marketplace for anyone to have any interest at this time.

Soybeans are higher, led by soybean oil, up well over 1½ cents, as there is talk that the EPA and Pres. Trump are meeting with industry groups to discuss Small Refinery Exemptions (SREs). Expectations have suddenly fallen from 1.8 billion to 1.2-1.3 billion. This pushed soybean oil quickly higher overnight, as nobody seems to know what’s really going on. It’s like importing unknown-quality beef out of the blue with no origins identified.

The underlying support for row crops remains the revelation of smaller crops in the US. Now, global trade disruptions could mean less corn leaving Ukraine, forcing Europe, which just produced one of its smallest crops in 50 years and is down a minimum of 10 MMT from the USDA estimate, to look beyond South America for the corn they came up short growing this year. They will pick up more US corn, as they did this past spring. New-crop corn demand is picking up, and despite the naysayers, sales are the fourth highest on record for this time of year. 

Upward momentum overnight has wheat, corn, and soybeans pressing new calendar-year highs as we head into the end of the week, with Monday marking the end of the month. This will make for interesting positioning, given how large index fund ownership has grown. We’ll look at the COT report this afternoon to see where they are, but that will be based on Tuesday’s close. It is completely ridiculous that we are missing three days of data when it is all filed electronically and sitting on a computer. It’s almost like it’s being held for the advantage of others before the general public gets it. We are not living in the Stone Age anymore, when clerks wrote everything down in paper ledgers and transmitted it via facsimile machine to the CME. CME is a club, and you’re invited to play while they make the rules.

By the way, there are rumors that margins may be increased. This is usually a prerequisite to a correction. But that doesn’t necessarily mean the top is at hand, because end users are waiting in the wings for something to break the market so they can buy.

Major upside strategic pricing targets that could stall the current run are 542-553 for December corn, 1294-1304 for November beans, and 792-802 for December Chicago wheat, per yesterday’s video showing how those targets were developed.