Ship full of corn leaves Ukraine
After weeks of negotiation, the first shipment of corn finally left the Odesa Port, passed inspection, and headed for Lebanon. The Russia/Ukraine/Turkey/U.N. deal that enabled the export is expected to allow a safe corridor for shipments of wheat, corn, and other agricultural products. Those goods are destined for countries that have become desperate for food since the war shut down Ukrainian exports.
U.S. grain futures initially fell on the news but gained traction and rose sharply toward the end of the week. The rally was related to Chinese buying of U.S. soybeans and fears that ongoing dry weather will threaten yields. The grain shipment out of Ukraine impressed analysts, but many believe logistics and politics could still delay the need to move so much so quickly.
Friday afternoon, corn for December delivery traded for $6.10 per bushel. September wheat sold at $7.76. September beans went for $14.62, down about 40 cents on the week.
No panda for Pelosi
Further complicating the political climate was the highly publicized trip of Speaker of the House Nancy Pelosi. Her trip, while receiving accolades from both U.S. political parties and democratic nations throughout the world, incited anger and military threats from China. By Friday morning, the Chinese had sanctioned Pelosi from visiting their country, and dropped missiles around Taiwan in retaliation. Since they are our biggest customer and trade partner for myriad commodities, agricultural and financial communities alike will keep a close eye on these developments.
Gas, diesel slide accelerates
The decline in crude oil and its refined product continued at a fast pace throughout the week. Even the saber rattling, which typically causes a rush to buy petroleum, couldn’t stop the liquidation of West Texas crude and unleaded gasoline. September gasoline futures traded for $2.86 per gallon, while September crude oil brought $89 per barrel.
Inflation Reduction Act includes funds for farmers
After a final struggle with Arizona Senator Sinema, Democrats moved forward with a $300 billion bill early Friday that’s intended to reduce inflation, aid human health, and fund climate-smart agriculture. Roughly $21 billion of that is slated to reduce carbon emissions through carbon sequestration and other conservation efforts.
Answers to last week’s commodity quiz
The seven nations bordering Ukraine, listed with their respective leaders, are Russia, Vladimir Putin; Belarus, Aleksandr Lukashenko; Poland, Andrzej Duda; Slovakia, Zuzana Caputova; Hungary, Katalin Novak; Romania, Klaus Iohannis; Moldova, Maia Sandu.
Opinions are solely those of the writer. Walt Breitinger is a commodity futures broker in Valparaiso, Ind. He can be reached at (800) 411-3888 or www.indianafutes.com. Th;is is not a solicitation of any order to buy or sell any market.