Grains are mostly lower in overnight trading:
July Corn – 8 cents/bu (7.20 ¾ )
July Soybeans unchanged (16.51 ¼ )
July Chi Wheat – 22 cents/bu (10.55 ¼ )
Cdn $ -0.00210 (78.39 cents)
WTI Crude Oil -5.29/barrel (104.04)
Grains started the overnight session in positive territory, reaching their highs in the first hour of trade. The escalating Russian military operations in the Ukraine were seen as supportive to prices, as it seems inconceivable that any grain exports or any spring field work can occur as long as missiles are flying. However, despite a weekend of intense bombing, including a Ukrainian military base located within 15 miles of the Polish border, there are news reports of some potential positive developments in Russian/Ukrainian ceasefire negotiations. A Russian delegate and a Ukrainian advisor to President Zellensky both suggested that progress had been made in talks, and that results could be seen in a matter of days. Whether or not anything substantive emerges remains to be seen, but the reality is that grain prices have soared since the February 24th Russian invasion began, with corn rallying over a dollar a bushel in those 18 days (currently up 94 cents/bu), Chicago wheat rallying as much as $4.30/bu (currently up 1.38/bu), and soybeans rallying 80 cents/bu (currently up 16 cents/bu). If the war was ever to come to an abrupt end, grain futures will definitely come under some short term selling pressure.
Volatility remains the name of the game in all markets, given the massive uncertainty over geopolitical risks at the moment. USA and Chinese officials are meeting in Rome today to discuss the proliferation of “misinformation” stemming from Russian claims of USA involvement in the development of biological weapons in the Ukraine. The USA also wants to ensure that China does not “dilute” the effectiveness of western sanctions against Russia, by supporting President Putin through clandestine economic support. How these meetings go could speak volumes about what happens with Chinese imports of USA grains going forward. Today, corn has already traded in a 20 cent/bu ranges, soybeans in a 33 cent/bu range, and Chicago wheat in a 65 cent/bu range.
Soymeal prices are stronger overnight, as Argentina’s Ag Secretary signed a memo to suspend soy meal and soyoil exports. The Argentine government is widely expected to raise their export tax from 31% to 33%, which just makes their exports more expensive to potential importers, thereby supporting the price for USA meal and oil.