Ukrainian Grain, Planting Progress, Export Inspections, Markets & Rain Days Update 6/7/22
- Wright Team
- Jun 8, 2022
- 3 min read
Highlights
No sooner did we talk about how great the Corn Belt weather forecast is and the forecast changes to hot and dry. All this means is the weather will become normal because normal weather includes hot and dry spells. This is actually good for the corn crop and good for you. The corn plants will get rooted down for more water the rest of the season and the market will rally on fears of the hot and dry weather extending into July. That combination will increase your corn yield and give you a chance to sell more corn and buy higher strike price puts. The talk in the trade is December corn below $7.00 this early in the growing season has no weather risk priced-in. We agree. Note yesterday’s ENSO update:
The Russian military shelled Nikolaev on Saturday, which is a minor grain port and major industrial product port including ship salvage and ship building. Supposedly one of the grain and oil terminals caught fire. Absolutely no confirmation by anybody yet about damage to grain facilities said to be owned by Cargill. Market overreacted yesterday, but we are surprised it did not over react even more. Given current news outlook with harvest around the Northern Hemisphere about ready to roll full bore, wheat looks very expensive.
For those of you with soft red winter wheat, set the basis three weeks before harvest begins in your area. Historically that is the strongest basis of the year.
American diplomats have alerted 14 countries, mostly in Africa, that Russian ships filled with stolen Ukrainian grain are headed their way. What would a hungry person do? More importantly, what will USA do if hungry people eat stolen grain? Do US diplomats really expect hungry people with no money are concerned about eating stolen food or politics?
Media sources reported early yesterday Ukraine, Russia and Turkey have developed a preliminary plan for transportation of Ukrainian grain from the port of Odessa, which is by far the leading grain export Port for Ukraine.
Late last evening, Turkey reported:
The Russian government plans to allow ships carrying grain supplies to leave the port of Odessa in Ukraine, according to a report, easing a blockade that has triggered fears of widespread shortages and hunger. The Russian leadership has agreed with Kyiv and Ankara on a scheme to release grain shipments from Odessa, which has been subject to a blockade, the pro-government Izvestia reported, citing government circles. In the territorial waters of the neighboring country, Turkish military forces will take over the demining and they will also escort the ships as far as neutral waters and Russian warships would then escort the vessels carrying grain to the Bosporus Strait in the Western Black Sea.
The Weekly Crop Progress Report issued after the market closed Monday said 94% of the nation’s corn is planted, which is 2% more than the five year average. Yes, 2019 was very wet and very late, but a five year average of just 92% planted seems to be a stretch. This week is the first corn crop conditions rating. It is 73% good or excellent, 5% better than the trade expected.
Export Inspections Tracker
Market Data
This morning:
Crude oil is at $119.42, up $0.92
The dollar index is at 102.61, up 0.17
July palm oil is at 6,714 MYR, up 39. The contract high was made April, 29th at 7,229 MYR. Palm oil owns 36% and soybean oil owns 28% world market share.
December cotton is at $118.98, down $0.82 per cwt. The contract high was made May, 17th at $133.79 per cwt. Cotton competes with soybeans and corn for acres.
July natural gas is at $9.354, up 0.032. The contract high was made today at $9.544. Natural gas is the primary cost to manufacture nitrogen fertilizer.
July ULSD is at $4.3899 per gallon, up 0.0298. The contract high was made yesterday at $4.4084. ULSD stands for Ultra Low Sulfur Diesel.
Rain Days Update
The Western Corn Belt has 13 less rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 11 less rain daysthan yesterday.
The 6 to 10 day forecast updated every day at: https://www.cpc.ncep.noaa.gov/products/predictions/610day/
Explanation of Rain Days
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