Wheat Retreats On Tuesday’s Trade…

Wheat retreats on Tuesday’s trade

As the market grapples with what the counter offensive in Kherson means and the uncertainty it brings for grain exports out of Ukraine

Ukraine managed to ship out 1.45mmt through the grain corridor during the month of August, most of which was corn.  If the pace end of the August is kept up, the grain corridor could get close to 3mmt.

In tender news, Jordan booked 60k of MW at $379.50/mt CFR Aqaba for LH Jan shipment.

Algeria tendered yesterday for Sep/Oct shipments with prices reported at $364-365/mt CFR from Russia.

Egypt was rumoured to be in the market yesterday for more private purchases for Nov/Dec shipments.

 

While profit taking was the main factor pressuring grains on the CBOT yesterday, it is not the only one.  With weakness seen in crude oil prices also taking a bite out of agricultural futures.  Oil prices are down over 2%, which in turn is pressuring grains due to their exposure in energy via renewable fuels.  The energy complex is still a big influence, with crude and corn very correlated lately.  When crude is down, the ags markets will struggle also.

 

Wheat futures are lower.  Most month end short covering may be done.  Concern about global stagflation and inflation quickly turning to deflation could reduce global food demand.

Many US jobs go unfilled while many workers are struggling to pay higher total bills.  This could also slow food demand and restaurant dining.

US wheat export prices are uncompetitive.  US SRW export price is near $346 while Black Sea is near $315.  Russia continues to lower export tax which is giving buyers some new confidence in buying wheat forward.

 

Mpls wheat -10

KC wheat -10

Chic wheat -8

Matif wheat -1

Canola -12

Rapeseed +3

Soybeans -14

Soybean oil -34

Crude -160

Corn -12

CAD -7