The leadership of Ukraine accepted that as fact overnight. They concluded the EU and the USA, who had promised in 1999 to protect Ukraine from Russian (and any other) aggression was simply not going to happen.
Ukraine gave up its nuclear weapons and heavy military equipment left over from the Soviet days in exchange for the “security” guarantee. The EU and USA hung Ukraine out to dry to be used for target practice by the Russians.
All that remains is for the world to accept it as fact, clean up the mess and learn to live with the new reality. The market already has accepted it. The Dow Jones is up 743 points and climbing with ease. Crude oil is down $2.41 and, as you know, commodity prices are sharply lower.
All three commodities were way overdue for a round of profit-taking. Wheat had gone hysterical on the war news, so its correction will be much more severe than for corn and beans. Wheat will gain speed to the downside because the seasonal trend is down plus winter wheat will look a million times better as it comes out of dormancy in the next few weeks.
The corn and soybeans have the benefit of being in short supply and growing demand. No matter how deep the correction, corn and beans will make new highs in the coming weeks or few months. The fundamental and technical outlooks have not changed.
Get this:
May soybeans can decline $4 and still be in a technical uptrend.
May corn can lose $2.20 and still be in an uptrend.
This morning, the USDA announced the sales of:
334,000 mts of new crop soybeans to China
159,000 mts of old crop soybeans to unknown
126,000 mts of new crop soybeans to unknown
The USA is not supposed to be selling soybeans in February.
This is Brazil's sales window. Gosh, do you think maybe soybeans importers suspect Brazil and Argentina might be a little short on bean supplies last this year?
Weekly Export Sales Released this Morning by USDA. Note that:
Old Crop Corn Sales above the range expectations
Old & New Soybean Sales above the range of expectations
Old & New Wheat Sales above the range of expectations
