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Wheat, Russia, Market Update & Rain Days 03/07/2022

May Chicago wheat did open up the 85 cent limit. One hour after the market opened, 5,300+ May contracts were traded. After two hours, 7,127 May wheat contracts traded. As of this mailing, 8982 contracts of May 2022 wheat have traded since the opening.

There are 1,389 May $18.00 calls open interest; 1,062 May $19 calls and 200 May $20 calls. The May $20 calls are trading at 32 cents per bushel. That means you can buy the right to buy May wheat futures at $20 for 32 cents. Or can let someone pay you 32 cents for the right to buy May futures from you for $20. No matter what happens, you keep the 32 cents.

 

Two years ago gasoline futures made the all-time low. Gasoline futures price made its all-time high today, taking out the 2008 high. Two years… What happened? Elections have consequences… It is true.

 

SberBank, Russia’s largest lender, stated the Visa and Mastercard it issues will continue to work in Russia.


Moody's downgraded Russia's credit rating close to default, less than junk bonds. They expect the Russian economy to shrink by 7% in 2022 and decline further in 2023.

 

Black Sea Wheat Market Analyst, Andrew Sizov said Sunday afternoon before the market opened:

I think we at last & at the least should see May wheat below the limit-up tonight. Chances of the rapid reversal are growing. According to our estimates, the market (has) already priced in a full stop of Black Sea exports until 22/23.


 

Market Data

This morning:

Crude oil is at $123.28, up $7.6

The dollar index is at 99.02, up 0.37

July palm oil is at 6,011 MYR, up 136. The contract high was made March, 3rd at 6,337 MYR. Palm oil owns 36% and soybean oil owns 28% world market share.

December cotton is at $101.18, up $0.53

per cwt. The contract high was made February, 10th at $106.36 per cwt. Cotton competes with soybeans and corn for acres.

July natural gas is at $5.201, up 0.088. The contract high was made today at $5.208. Natural gas is the primary cost to manufacture nitrogen fertilizer.

July ULSD is at $3.3961 per gallon, up 0.1824. The contract high was made today at $3.4873. ULSD stands for Ultra Low Sulfur Diesel.


 

Rain Days Update


Yesterday, in the dry areas of South America: Santa Maria high temperature 78°F with 0.3 inches rain. Cordoba high temperature 80°F with 0.2 inches rain. Salto high temperature 87°F with 0.3 inches rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 2.42 inches, 71 to 91°F. Cordoba 0.17 inches, 74 to 81°F. Salto 0.27 inches, 75 to 82°F. The Western Corn Belt has 2 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has the same number of rain days than yesterday.


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