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Crude Oil, Fertilizers, Inflation, Put Options, Markets & Rain Days Update 5/11/22

Highlights


One year ago yesterday, 85% of North Dakota was in a severe drought (rated D3). This week, North Dakota is rated 4% very short, 16% short, 54% adequate, 26% surplus topsoil moisture.

The soybean basis in North America’s soybean crush capital, Decatur, Illinois is 53 over the July. On the river in St. Louis, the basis is 75 over the July. Both were 2 cents firmer yesterday. With the soybean crush margin $2 a bushel more profitable than a year ago and the new crop soybean export book the largest ever by a very wide margin, we will have a basis bidding war like never before for soybeans deep into harvest. Corn will have a more mild bidding war. Note that the firm basis is why there have been no deliveries on the May corn and beans. With a positive basis, one actually would be paid a lower cash price for a commodity delivered on a futures contract. There were 50 meal, 2 KC wheat, 33 CBOT wheat delivery notices this morning.

JPMorgan says Russia's economy is stronger than expected and will only suffer a shallow recession despite sanctions. Some financial “experts” say inflation in Russia is running 20% this year. That is absolutely not true based upon our direct contacts in Russia.

 

The president and CEO of fertilizer giant, Mosaic, is Joe O’Rourke said he expects fertilizer prices in the second quarter will be $40 to $60 per ton higher than prices in the first quarter.

We are actively increasing productive capacity in our potash business. We're already running at a 10.8 million tonnes run rate per year. We have project teams working on two additional mines.

Updated Fertilizer Price on Barges at New Orleans:


NOLA urea

March 25 - $935

May 4 - $620

Down $315 or 34%


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