Despite frantic rhetoric by world leaders regarding Ukraine war’s impact on food availability/price, both corn and wheat are trading below pre-war levels. Global corn/wheat supply chains have adjusted to drastic cut in Ukraine grain availability via rationing, stock drawdown upping production and alternate sourcing.
Bottom line, analysts underscoring likely continuation of elevated ag price volatility (and higher prices) into 2023 may be preoccupied with supply concerns while ignoring cautions flags on demand outlined above. There is no doubt that 22/23 grain supplies must be clarified but so far, 2022 US weather pattern suggests that 2022 US yields are unlikely to stray far from trend.
Wheat will continue to be a bearish through September until the amount of wheat exiting the Black sea is determined.
4 more boats have been shipped from Ukraine ports over the weekend with 110k corn, 45k SFM and 6k SF Oil. Ukraine Infrastructure Minister expects Ukraine to step up to 3mmt/month (although still down from 6mmt each month).
The 1st vessel of corn to leave Ukraine ports has just had its destination changed to ‘unknown’ after nearly reaching its initial destination in Lebanon. The Buyer refused to accept the cargo due to delay of delivery terms (more than 5 months)
The US winter wheat harvest is moving North fast as hot and dry conditions aid farmers harvest efforts. Total harvest is now standing at 70% complete according to the US Wheat Associates. SRW harvest is already complete.
The heatwave looks set to continue for Europe and with very little rain since June are stressing already parched crops across the continent.
Rains fell in key corn and soybean growing areas.
Private analysts IHS Markit (formerly Informa) on Friday estimated 2022 U.S. corn yield at 176.9 bushels per acre, above StoneX’s 176.0 bpa August estimate but below the USDA’s 177.0 bpa July figure. Production was pegged at 14.497 billion bushels, just a few bushels below the government. Soybean yields came in at 51.8 bpa, above the 51.3 bpa StoneX figure and the USDA’s 51.5 bpa, with output there at 4.530 bln bu, 25 mbu above the USDA.
The second caravan of ships from Ukraine arrived in Istanbul to be inspected before they can move on to their destinations. Ukraine still has around 20 million tons of grain awaiting shipment according to the Turkish state agency, Anadolu.
The Zaporizhzhia nuclear site was bombed in Southern Ukraine. Moscow and Kyiv accused each other of the bombing. The largest atomic power complex in Europe remains under Russian control.
For four days in August, the Panama Canal will close the west lane of the Gatun Panamax Locks for 4 hours per day for scheduled maintenance. The normal rate thru the locks is 34-36 vessels per day. This is only expected to decrease the flow rate by three vessels per day.
The 2022 Hard Spring Wheat Tour sponsored by the Wheat Quality Council ended on July 28. The tour estimated the HRS wheat crop at 49.1 bushels per acre. The Durum crop is expected to yield 39 bushels per acre based on tour results.
Mpls wheat -8
KC wheat –11
Chic wheat -10
Matif wheat -4
Canola +6
Rapeseed +3
Soybeans -4
Soybean oil +88
Crude -85
Corn -7
CAD +45