Highlights
CONAB will update their Brazil production estimates this morning. How much will they reduce Brazil's corn production? April 27th was the last day there was any rain in the ten day forecast for Rondonopolis, Mato Grosso and that was after the driest April in Mato Grosso in 17 years.
The USDA will release their May WASDE report at 11 AM Central Time today. How much will they reduce Brazil's corn production?
Yesterday India received from Turkey a purchase order for 50,000 mt of wheat. Yet, the rumors persist India will restrict wheat exports.
France’s Ag Ministry raised their wheat ending stocks estimate by 200,000 mt to 3.2 million and reduced exports by 250,000 mt to 9.25 million mt.
The US April Consumer Price Index (CPI) was up 8.3% from April a year ago. The market was expecting an 8.1% increase. CPI is the measure of inflation at the retail level.
HPAI, avian flu, only one report of an infection the past six days. It was a commercial flock of 20,000 turkeys in Wisconsin. We all thank the warmer weather for fewer bird flu infections.
The G7 leaders told Putin to stop blocking Ukrainian grain exports. The written statement said that if Putin did not stop blocking Ukrainian ports for food exports, it would be seen as an attack on food supplies to the world. This is another part of laying the groundwork to prepare us emotionally for a major expansion of the war. We are going to war to save the world from starvation; what a noble cause.
Ukrainian wheat harvest starts in six weeks. The Ukrainian Port City of Odessa is under attack, but no hits on the grain facilities have been reported. If there had been, I am sure we would have heard about it. The Russians want that grain. Will the Ukrainians let them have it, die trying to stop the Russians from taking or destroy the grain and blame it on the Russians to provoke retribution against Russia for starving millions of children and little old ladies?
Wheat Put Discussion
After the Close Wednesday May 11th.
September 2022 CBOT wheat futures settled at $11.17¼, up 20 ¾ cents. All puts decreased in value since the futures price gained over 20 cents.
The delta is the percent change in an option's premium (price, value) compared to the price change in the underlying futures. As the futures market moves further away from an option's strike price, the delta diminishes. The delta of the $10 put went from .31 on Tuesday to .28 on the close Wednesday. The delta of the $9 put went from .18 to .16.
The $10 put lost 5 5/8 cents while the $9.00 put lost 3½ cents.
A short futures short position lost $1,037.50.
The $10 put lost $281.25.
The $9 put lost $175.
The wheat in the field or bin gained about $1,037.50 because cash price = futures plus basis.
Broilers & Ethanol Update
Last week:
Broiler egg set was up slightly than the same week a year ago.
Broiler egg hatch was down slightly than the same week a year ago.
Average daily ethanol production:
991,000 barrels last week.
969,000 barrels the previous week.
979,000 barrels the same week a year ago.
617,000 barrels the same week two years ago.
Ethanol inventory was 24.110 million barrels compared to 23.887 million barrels the previous week.
Market Data
This morning:
Crude oil is at $103.98, down $1.73
The dollar index is at 104.11, up 0.26
July palm oil is at 6,380 MYR, down 96. 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 $124.18, down $0.57 per cwt. The contract high was made May, 4th at $129.91 per cwt. Cotton competes with soybeans and corn for acres.
July natural gas is at $7.627, down 0.100. The contract high was made May, 6th at $9.052. Natural gas is the primary cost to manufacture nitrogen fertilizer.
July ULSD is at $3.7004 per gallon, down 0.0542. The contract high was made May, 5th at $3.9282. ULSD stands for Ultra Low Sulfur Diesel.
Rain Days Update
The Western Corn Belt has 19 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 6 more 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