Tuesday June 5, 2022

  • Markets opened sharply lower after the long weekend with some follow through selling post report and a risk off attitude due to widespread timely rains in the US
  • US wheat harvest will continue to pick up steam this week supplying the world with another influx of new crop which will likely put pressure on the market
  • A Russian ship carrying alleged Ukrainian grain has been detained by Turkish customs with other deals still being made to Saudi Arabia, Iraq and Iran from Russian controlled Ukrainian ports
  • Drought and incoming frost has put Argentinian wheat harvest at the most delayed in a decade and traders are starting to question if further cuts will happen
  • Brazil June exports down 1 mmt yoy but StoneX has increase their 21/22 bean production 2.6 mmt to 127 mmt and corn up 2.5 mmt to 119.3 mmt and is reportedly 19 points ahead of last seasons pace
  • Russian 2022 wheat production is reported to be 85.4 mmt up from 75.2 mmt ly per Agritel
  • We saw money flow into commodities as a hedge against inflation. Now that prices have been strong for some time and the Fed is starting to actively combat inflation as well as traders hearing whispers of recession we see them locking in profits and selling off their position. The high volume of players in the market increased volatility as well as amplified trends, as they start to liquidate we could see things cool off. As usual with this time of year eyes will be on the forecast but currently things are looking good for much of the production region
  • Another COVID mutation in China has raised the risk of another round of lockdowns and with that comes the possibility of further demand destruction