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Ukrainian Grain, Planting Progress, Export Inspections, Markets & Rain Days Update 6/7/22

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?

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