The Federal Reserve governors issued some rather harsh words Wednesday afternoon about inflation needs to be dealt with “aggressively”, but they did not raise rates. None-the-less, higher interest rates are coming and that knocked commodities and stocks down a notch yesterday afternoon.
Ukraine AgroConsult predicts Ukraine:
2022 corn production down 900 million bushels from 2021 (China needs that corn!)
2022 wheat production down 452 million bushels from 2021
The detailed numbers from Ukraine Agro:
Ukraine corn planted area will be 8.15 million acres (3.3 million hectares) vs. 13.5 million acres (5.46 million hectares) in 2021, corn production at 19 million mt vs. 41.87 million mt in 2021; corn exports at 28.5 million mt vs. 19.3 million mt last year. They see wheat planted area at 12.77 million acres (5.17 million hectares) vs. 17 .53 million acres (7.10 million hectares) last year; production at 19.8 million mt vs. 32.08 million mt last year with wheat exports at 16.3 million mt vs. 19.0 million last year.
The wheat markets are in for a rude awakening when the hostilities in Ukraine come to an end - Andrey Sizov, SovEcon, the Black Sea Wheat Guy. We agree wheat prices will fall like a rock.
When wheat rallies to the top of the sideways trading range it has been in the past month, load up on September put options. A $9 September CBOT put now is in the 44 cent area and the $8 put is in the 17 cents area. When September wheat gets to $7.00, the $9 put will be worth more than $2 a bushel. See the September wheat chart below.