The war in Ukraine and a dry climate in the Midwest are pushing US wheat higher, while the fall in oil is slowing the soybean complex.
LWheat prices quickly rebounded on Tuesday in Chicago, in a market still under great tension in the face of the war in Ukraine. Despite ongoing negotiations, fighting continues to escalate in the Black Sea and greatly disrupt trade flows.
The fears about the 2022 harvest are also growing with plantings that could fall by almost 40% if the conflict were to continue.
In the US too, the upcoming harvest is a source of concern. After another episode of drought in the Midwest in recent weeks, USDA downgrades winter wheat ratings by one point “good to excellent” in Kansas, at 23%, a drop of fifteen points from last year. Ratings in Oklahoma and Texas stand at 24% and 6% respectively!
The complex Soy on the other hand, evolved in a disorganized manner due in particular to a further drop in crude oil prices. The epidemic recovery in China and the news containment measures it entails threatens the country’s consumption in the short term.
The NOPA (National Oilseed Processors Association) provided some support for bean prices by estimating US crushing at 4.49 Mt last month, a volume in line with market expectations. This activity, however, resulted in a jump in soybean oil stocks at 934 kt, the highest since April 2020!
At the Chicago close, the SRW wheat maturing May 2022 jumped C$58/bu to $11.54/bu. the But May 2022 futures advanced 9.8 c$/bu to $7.58/bu. Soybeans for May 2022 delivery eased by 11.8 c$/bu, to 16.59 $/bu.
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