–Wheat for May delivery fell 1.6%, to $6.98 1/2 a bushel, on the Chicago Board of Trade on Monday, with traders shedding risk premium for wheat futures despite uncertainty regarding the length of the Black Sea deal extension.
–Corn for May delivery fell 0.2% to $6.33 1/2 a bushel.
–Soybeans for May delivery rose 0.5% to $14.85 a bushel.
Full Plate: Wheat futures led grain trading lower, with the terms for the length of the Black Sea export agreement extension murky – with Russia claiming the extension is only for 60 days while Ukraine said it’s for the full 120 days. On top of geopolitical concerns, domestic weather pressured wheat futures, said Donna Hughes of StoneX. “I think it’s reflective of where trader’s thoughts are, the condition of the short position and the anticipation in part of what conditions are like on the physical crop here in the U.S.,” she said. Precipitation is anticipated in the latter half of this week, according to the latest outlook from DTN, this after frost damage is anticipated earlier in the week.
The Bigger Picture: Uncertainty over the stability of the global banking sector made its way into markets across the board Monday, including grains. The negative momentum comes after UBS agreed to buy Credit Suisse for $3 billion, with traders unsure if the global banking crisis has been contained. “Prices are losing ground in the early Monday’s trading,” said AgriTel in a note. “The atmosphere remains gloomy on the markets with the specter of a banking crisis.”
Maintaining Optimism: Soybean futures bucked the downward trend seen in CBOT agricultural futures, amid indications of improving export demand – with the USDA confirming higher soybean inspections in its report today. Soybean inspections totaled 716,618 tons for the week, up from 633,367 tons last week, the USDA says. While corn inspections remain 36% behind last year’s pace, soybean inspections are 3% higher for the year. “Rumors of additional export demand due to losses in the Argentine crop are providing support,” said Karl Setzer of Mid-Co Commodities.
Looking to Brazil: China is likely to target Brazil for grain imports as the country looks to keep food price inflation at bay, according to Kona Haque, head of research at ED&F Man. While the rest of the world has seen sharp increases in food prices recently, China avoided this largely because it was in lockdown for the last two years, Ms. Haque said in a panel at the Financial Times Global Commodities Summit. “China does not like food inflation,” she said, adding that if the opportunity presents itself to build stocks of grains and softs then the country will do so. This is likely to come from Brazil, amid strained relationships with the U.S. and poor harvests in Argentina for corn.
Spreading Disease: Incidences of tar spot disease – the name for a fungal disease that creates dark lesions on corn husks and ultimately kills the plant – were discovered in fields growing in Kansas, Nebraska, and South Dakota last growing season, said Kansas State University in a study published earlier this month. The reports says these are the first instances of tar spot disease being discovered in the Great Plains, which could increasingly become a problem for U.S. cornfields. “It is estimated that it caused farmers to lose $3 billion in the United States from 2018 to 2021 and has the potential to become more destructive in states now seeing cases,” said Daniel Flynn of Price Futures Group in a note.
–The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
–The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
–The USDA will release its monthly Cold Storage report at 3 p.m. ET Thursday.
–The USDA will release its monthly Livestock Slaughter report at 3 p.m. ET Thursday.
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