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World Trade & Grain Prices, USD Outlook, Export Inspections, Markets & Rain Days Update 03/22/2022

Highlights


India is in the final discussions with Egypt to close an export wheat deal. Egypt’s supply minister said his country has enough wheat reserves to last 3½ months. Jordan’s trade minister says his country has enough wheat and barley to meet their domestic needs for a year. China sold 522,804 mts of government wheat at their March 16th auction at $12.65 per bushel, down 12.7 cents from their March 9th wheat auction.

 

Russian troops in Ukraine areseizing and destroying agricultural machinery, fertilizer, seeds and fuel stocks,according to several farmers in Ukraine.

 

Brazil’s safrinha (second crop) corn received good rains over the weekend in the central part of the country where 76% of the corn is grown. The dry southern areas of Brazil and Argentina are expected to have good rains over the next week, but it will take eight more weeks of above normal rainfall to make a decent corn crop.

The Argentine government extended the State of Emergency for the Parana River for 90 more days. The low water levels at the ports near Rosario are responsible for approximately 85% of the country’s agricultural exports. Ships are being loaded at 70% or less of normal loads on the river.

The front-month cotton contract hit its highest price in 11 years yesterday. There goes some more bean and corn acres.

 

Politicians in Washington are considering another round of stimulus money to help consumers offset higher prices. That is just what we need to destroy the economy: print more money to pay for the inflation we already have due to printing money. That is what socialist governments do.

The annual crude oil trade is estimated at 14 trillion US dollars with the world's foreign exchange reserve of 8 trillion, 7.1 trillion is traded with the US dollar. The British pound has 0.6 trillion, and the Chinese yuan is content with a modest 0.2 trillion.

Decoupling the oil trade from the US dollar has long been the desire of China and more recently, the EU. If that happens, there will be a sharp jump in the importance of the yuan and euro. The whole world will no longer work to maintain the value and importance of the American dollar. The current massive printing of American dollars by the Federal Reserve will lead to hyperinflation which will cause a decline in living standards in America as prices increase for goods, energy and services. Printing more money to pay for past inflation caused by printing new money is like trying to put out a fire with gasoline.

Back in the day before world economists really had an understanding of how to manage printed money (as a replacement for gold and silver currency), Germany, after WW I, printed massive amounts of paper currency in an effort to spur economic recovery after the country’s defeat in the war in November 1918. By late 1919, it took a wheelbarrow full of money to buy a loaf of bread. Burning the currency in the pot belly stoves at home was cheaper than burning coal.

 

The weather outlook favors a good corn crop in Brazil to be harvested in June and July. In the meantime, the USA is really the only corn exporter as long as the war continues. Good weather or not, there will be no more soybeans harvested anywhere in the world after early May until the USA bean harvest begins in 2022.

November beans traded above $15 overnight for the third day in less than month. It was also only the third day in 9½ years. Right now, it looks like we will be recommending pricing corn one to three months sooner than soybeans. No, we do not think the high is in on November beans, but they will set back soon, very soon before moving to new highs.

 

Export Inpections Update


Weekly Export Inspections yesterday were within the range of expectations:

 

Market Data


This morning: Crude oil is at $113.91, up $1.49 The dollar index is at 98.83, up 0.32 July palm oil is at 5,849 MYR, up 152. The contract high was made March, 9th at 6,531 MYR. Palm oil owns 36% and soybean oil owns 28% world market share. December cotton is at $107.53, down $0.63 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 $5.020, down 0.005. The contract high was made March, 7th at $5.270. Natural gas is the primary cost to manufacture nitrogen fertilizer. July ULSD is at $3.2848 per gallon, up 0.0723. The contract high was made March, 9th at $3.7675. ULSD stands for Ultra Low Sulfur Diesel.

 

Rain Days Update


Yesterday, in the dry areas of South America: Santa Maria high temperature 82°F with 0 inches rain. Cordoba high temperature 69°F with 0 inches rain. Salto high temperature 70°F with 0 inches rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 3.56 inches, 73 to 86°F. Cordoba 0.76 inches, 70 to 85°F. Salto 1.30 inches, 59 to 82°F. The Western Corn Belt has 6 less rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 5 less rain days than yesterday.


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