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Highlights, Crop Conditions, Wheat Puts, Export Inspections, Markets & Rain Days Update 6/22/22

Highlights


The weather will move corn and beans prices higher. Corn probably will not make new contract highs, but that $7.50 area will be tested by July 6th (probably sooner) as it was last last Friday at $7.49¼.

Russia, Ukraine, and Turkey will meet in Istanbul next week to work on a grain trade solution. Market thinks this meeting will get Ukraine’s old and new crop wheat into the world marketplace. The market had priced that wheat out of the world S&D.

India’s food ministry may allow 500,000 mt of wheat to be exported to Egypt and Jordan. We suppose the “may allow” means they need to get Russia’s permission. Russia supplies India Russian crude at a 30% discount. India adds an equal amount of non-Russian crude and India is allowed (by the sanctions standards on Russian crude) to sell all of the mixed oil at world market price. India does not want to lose that money-making operation by selling wheat in competition with Russia’s wheat.

SovEcon (Andrey Sizov) raised its Russian wheat production estimate to a record large 89.2 million mt. The USDA is at 81.0 million. Last year’s “good” crop was about 75 million mt.

Yesterday, since the war is going to be multiple years long in the “world’s bread basket,” we stated we needed to rethink buying wheat puts or hanging on to the September puts already bought. The rethinking process is over.

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