Russia news and crop pressure on markets – Agweek

Editor’s Note: Catch Randy Martinson every Friday after markets close at Agweek Market Wrap on Agweek.com.

The second week of September was a wild week. The week started with mixed cereals, with wheat opening from week lows, while corn and soybean gained. Markets react to USDA’s September crop production report. Wheat trade was mixed for the rest of the week, while corn and soybean declined. By the end of the week, Minneapolis wheat was posting a 6 to 10 percent gain, Chicago wheat was down 9 cents, Kansas City wheat was down 4 to 6 cents, corn was down 6 to 8 cents, and soybeans posted their gains at the end of the week. was cut. With 36 to 37 percent profit.

So, what changed so much from Monday to Friday? Wheat was supported by improvement in demand due to rice shortage in Asia. There was also support from unfavorable weather conditions in the US, as rain is expected to slow the spring wheat harvest, while warm dry conditions will help winter wheat sowing progress, but will not help the crop emerge. . Hedge selling pressure lowered corn and soybean contracts. Although early yields have been disappointing, seasonal corn and soybeans tend to backfire at this time of year.

On the positive side, the USDA finally released its export sales report on Thursday. Wheat sales were the best as they were lower than expected. Last month, maize sales were as expected and soybean sales were above expectations.

There was another potential black swan in the grain in the form of a potential railroad strike. The strike had the potential to cripple America because more than 30% of our products are transported by rail. At the end of the week, a deal was finalized, but it still has to be approved by rank and file. That vote will come at the end of September.

Grain appears to be in decision mode. Corn and soybeans hit recent highs. December Corn traded near $7 and November Soybean traded near $15. Technical sell-off and crop pressure have added to the pressure on both the markets.

The wheat itself remained on an island. It was the only grain holding gain at the end of the week as concerns mount that Russia is not going to renew Ukraine’s export program. The acreage needs to buy additional support. US wheat stocks and world wheat stocks are tight and the US needs to persuade producers to plant more winter wheat. The base price for crop insurance is definitely going to encourage more acres. The initial estimate for the crop insurance base price of soft red winter wheat is $8.40 over last year, an increase of 31%. For hard red winter wheat, the estimated base price is $8.79 versus the $7.08 estimated last year, also an increase of 31%.

To add to the week’s news, Stats Canada production estimates were negative wheat, but favorable canola. The report put all wheat production at 34.7 million metric tons versus 34.5 million metric tons and 34.57 million metric tons in August. The production of spring wheat in July was estimated at 26.01 million MT versus 25.57 million MT. Canola production was estimated at 19.1 million metric tons, in line with expectations but lower than August’s estimate of 19.5 million metric tons.

On a negative note, Russia’s Vladimir Putin and China’s Xi Jinping recently met and have agreed to increase cooperation and trade with each other. As a result Russia can supply all the wheat and corn it needs to China.

Montana, North Dakota, Nebraska and Kansas saw a sharp increase in drought conditions, while Texas saw an improvement in conditions.

The third week of September began with cereals on Monday with a mixed performance. Wheat gained momentum, while soybean gained momentum, while maize was able to recover. Wheat was under pressure from a strong US dollar. Selling pressure fueled by news Russian officials once again increased their wheat production estimates, this time by 2 million metric tons to 99 million metric tons. The USDA stands at 91 million metric tons. Reports of an increase in shipments from Ukraine added to pressure as the boats appear to be moving a bit faster now because of Russia’s concerns that the program will end at the end of the month.

Corn traded back and forth on 19 September, getting caught in a tug of war between the lower wheat complex and the higher soybean. Soybean won the battle as the corn jumped closer, but not much. There was early selling pressure from wheat, with hedge selling pressure adding to the losses. Harvest has begun, but is going slower than expected, according to a USDA crop production report.

We’re at the end of the growing season, and crop ratings are becoming less important as harvests begin, but Monday’s crop ratings were of interest. It seems that crop ratings were not consistent across individual states as Illinois dropped 1%, Indiana was steady, Nebraska dropped 5%, Ohio fell 3%, and South Dakota was down 4%. But the national crop rating slipped only 1%.

Soybean was the bright spot in cereals on Monday, fueled by a spurt in export news. was in China and bought 136,000 metric tons of US soybeans overnight. Lower-than-expected harvest momentum added support. Crop pressure pulled soybeans below their highs on Monday, but hopes of higher demand from China and lower-than-expected early yield reports supported soybeans. A strong soybean meal market extended support.

South America remains on the verge of drought, and this is supporting the soybean market. Brazil hasn’t rained as expected, slowing soybean sowing. Rain is expected until next week, and if it is felt, planting progress will proceed rapidly.

As with corn, soybean crop status ratings seemed slightly higher when individual states’ ratings were considered. Illinois was unchanged, Indiana fell 2%, Iowa was unchanged, Minnesota dropped 2%, Nebraska was down 3%, Ohio fell 2%, and South Dakota dropped 9%. North Dakota bucked the trend and was up 5%. The national crop rating dropped only 1%.

Traders, along with the rest of the world, are a little nervous about reports of Russian troops firing missiles at a nuclear power plant in northern Ukraine. Once again, on Monday night, Russian forces were firing missiles near the plant, causing damage not to the plant but to the infrastructure around the plant.

In addition, Putin is now looking to annex the four regions of Ukraine that are currently controlled by Russia. Russia controls about 15% of Ukraine’s volume. It is likely that any attempt to capture parts of Ukraine would result in escalation of war. This was subsidiary wheat as traders now expect that very little wheat will be planted in Ukraine, and it is likely that the export agreement to take the grain out of Ukraine’s ports will expire.

Cattle fell in the second week of September, with most of the sales stemming from economic concerns as well as a disappointing cash trade. Cattle were doing slightly better business in the third week of the month. The feed report was supported by position squaring before 23 September, which was due after this column’s deadline. Initial estimates are: On Feed: 100%, Placed: 99%, and Marketed: 106%. The Federal Reserve raised interest rates by 0.75%, which was as expected.

“The risk of loss in trading futures and/or options is substantial and every investor and/or trader should consider whether it is an appropriate investment. Past performance, whether real or indicated by simulated historical tests of strategies , is not indicative of future results.

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