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Wheat Overprice, Put Options, Export Sales, Markets & Rain Days Update 5/6/22

Highlights


The Dow finished well over 1050 points lower yesterday as mortgage rates climbed and mortgage brokers and processors across the country continue to be laid off every day by the hundreds, if not thousands. The markets have no confidence that the Fed has inflation under control.


Inflation was why corn, wheat and beans were so strong yesterday morning before profit-taking set-in as the Dow crashed. Wheat managed to settle sharply higher on the continued world-wide panic that we will all run out of wheat. Dry weather in the US Southern Plains continues for the most part, but that is old, very old news. France’s wheat crop all spring was rated 95% good or excellent, but now a heat wave is expected there and the wheat buyers around the world have become suicidal.


If you look at last month’s wheat S&D we sent you April 9th (it is posted on our website), you can see there will be enough old crop wheat left over at the end of this marketing year to meet the domestic and export needs of the USA for 4 months and 10 days before we have to use one bushel of new crop wheat. The world is projected to have enough wheat to meet the needs of the world for 4 months 8 days. By those numbers, wheat is about $5 overpriced. The corn and bean carryovers are so small compared to wheat, they should be $20 to $30.


Andrey Sizov, the Black Sea grain market analyst asked Jagdish Joshi, an agriculture commodity market analyst of New Delhi, India about India’s wheat crop given that is all the market can talk about this week. Jagdish answered:

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