After what was a hot start to the morning sending soybeans to new contract highs, markets cooled a touch midday into the close. At the end of the day, we saw July wheat up 3, with Minneapolis wheat up 7. July corn was up 7 with December corn up 4, while July beans closed 12 higher with November up 18.
Little in the way of progress has been reported when it comes to reopening Ukrainian ports for grain shipments. Russia continues to contend that the ports under their control in the east are open, saying all Kyiv has to do is name the price and they’ll handle the rest. Ukrainian officials continue to express anger at the theft of Ukrainian grain out of Eastern ports saying upwards of 600,000 tonnes have been lost so far.
In addition to limited developments when it comes to reopening shipments, Putin continues to blame the West for limited grain movement out of Russia. In a conversation yesterday Putin emphasized that for Russian grain to be delivered to the world sanctions must be rolled back. The West of course adamant against any such rollbacks until aggression is stopped.
Elsewhere, Indonesian officials are rolling back their export ban on palm oil, looking to actually accelerate exports here in the short-term after a ban filled storage tanks to the brim and forced processors to shut down.
Similarly, we are hearing reports India will rubber stamp the exports of nearly 1.2 mmt of wheat that had been gathered at ports ahead of their export restrictions. Much of the wheat was being held in open air flat storage, and with monsoonal rains expected to start in the next couple of weeks, was at risk of spoilage if not shipped. Exporters report that movement of that grain back into the domestic market would be nearly impossible, further forcing the hand of both the commercials with ownership and the government to process shipments.
Meanwhile, the process of reopening Shanghai has run into a minor speedbump 8 days in, after a hair salon in one part of the city is responsible for a spike in cases. The spike in community spread resulted in another lockdown of the neighborhood for mass testing.
In addition to Covid problems, one of China’s largest hog producers announced yesterday one of its pig breeding subsidiaries was strapped with nearly $81 million in unpaid bills. After having lost $2.8 billion in 2021 due to poor hog margins the company continues to produce at a loss, though analysts remain positive a turnaround in the industry is coming later this year.
Here in the US, we saw ethanol production fall off significantly from last week, likely indicating those in the industry who thought last week’s numbers may have been in error were right. Stocks were up on the week and are back up to multiweek highs in both the Midwest and the Gulf. On a positive note, ethanol exports in April were a record high with shipments to Europe and Canada up significantly year over year.
Weather-wise above normal temperatures with below normal precipitation is still expected in the 6-10 and 8-14 day forecasts across much of the Midwest. Forecasters remain unconvinced regarding the long-term pattern with some expressing thoughts we shift back to a more normal pattern as we work into July, with others anticipating heat and dryness to remain entrenched across much of the Corn Belt.
This year’s weather market is likely to be far more volatile than any we’ve seen before.
Corn down 2 to 5
Beans down 10 to 15