Tuesday was another mixed day for our markets. Harvest corn closed down 2 3/4, harvest soybeans closed down 3 3/4, harvest winter wheat closed up 7 and harvest spring wheat closed up 5 1/4. In the overnight trade all of our markets are now on the positive side. Oil closed up $1.20 yesterday at $79.34 per barrel. It is stronger again this morning with it now priced at $79.77. Our dollar had a low yesterday morning of $0.708 US and then trended higher going up to $0.712 US in the overnight trading. It has eased back just a bit this morning with it currently valued at $0.711 US.
The wheat market closed higher yesterday and has continued its rally this morning. It seems that the marketplace feels that the current bombings between Russia and Ukraine have brought some uncertainty about future shipments into the forefront and this is being rewarded with higher prices. More specifically Ukraine bombings on vessels in the Karch Strait where usually 25% of Russian Wheat Exports flow through have hit the newswire. Also continued bombings from Russia on grain export terminals in Ukraine are also being highlighted at this time. It is doubtful if the market will rally too much more as throughout this war both countries have always found a way to keep their exports flowing.
The current heat wave across most of the US Corn Belt is not really being reflected in the row crop markets. With the weather forecast looking at easing temperatures next week and increased probabilities of precipitation analysts are thinking that the stress on the growing crops will be limited. This of course will result in only minor yield damage. As always weather forecasts can change quickly and if the heat wave is extended we should see a risk premium come back into the row crops.
US soybeans are now priced even with soybeans from Brazil on the world market. If China was to waive their 10% tariff on US soybean imports it would give US soybeans that much of a price advantage. With that price advantage we would expect to see Chinese purchases from the US increase substantially. This is most likely part of what is required for China to meet the 25 million soybean purchase target that President Trump has repeatedly talked about.
Crude oil prices have seemingly balanced off at the $80 per barrel level with the end of the ceasefire between US and Iran. Hopefully no further increases come to crude oil as I am sure that everybody is tired of paying the current elevated prices at the gas pumps.
Geoffrey Guy | 613-880-2707
Delores Seiter | 613-880-7458
