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Russian Debt & Wheat, S&D Estimates, Markets & Rain Days Update 04/06/2022

Highlights


Saudi Arabia has increased the price of crude oil for May delivery to all buyers: Arab Light to Asia (which gets two-thirds of Saudi crude exports) increased $4.40 to $9.35 per barrel and oil to the USA up $5.65 per barrel.

 

Gulf corn basis last evening for July was 5 cents higher. Soybean basis was a penny higher for the first half April, two cents higher for the last half April and all of May. Backdoor rumors are China is in the process of buying 2 to 3 million mt of US corn. Sunflower yields in Argentina are a bit less than last year and they weren't great last year.

 

Russia’s government has big bucks deposited in financial institutions controlled by the US Treasury. Those funds are frozen as part of the sanction policy. The US Treasury (so far) has refused to release Russian government funds they need to pay $600 million on national debt later this week. The refusal will require Russia to make the debt service payment from operating cash flow, which will be difficult to maintain their military operations… or they could default. The holders of Russian government debt are probably investors from Western Europe and the USA with China further down the list.

The European Union has proposed a ban on coal imports from Russia. Other sanctions proposed would bar Russian imports worth 9 billion euros and EU exports to Russia worth 10 billion euros. Putin supported wheat prices yesterday when he said, When the whole world wants to buy Russian wheat in 2023, Russia will remember who put sanctions on Russia in 2022.

 

The USDA will release its monthly World Supply and Demand Report at 11 AM Friday. The suspense will be what USDA does with production numbers of South American crops and US demand. There will be no US crop production changes. Estimates are:


 

Market Data


This morning: Crude oil is at $102.30, up $0.34 The dollar index is at 99.69, up 0.22 July palm oil is at 5,721 MYR, up 47. The contract high was made March, 9th at 6,531 MYR. Palm oil owns 36% and soybean oil owns 28% world market share. December cotton is at $114.69, down $0.13 per cwt. The contract high was made yesterday at $115.00 per cwt. Cotton competes with soybeans and corn for acres. July natural gas is at $6.226, up 0.056 The contract high was made yesterday at $6.336. Natural gas is the primary cost to manufacture nitrogen fertilizer. July ULSD is at $3.2139 per gallon, up 0.0333. The contract high was made March, 9th at $3.7675. ULSD stands for Ultra Low Sulfur Diesel.


 

Rain Days Update


The Western Corn Belt has 4 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 2 more rain days than yesterday.


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