Ag Calls Mixed, Wheat Higher on Demand

MORNING OUTLOOK

Grain calls are mixed. SU is near 14.16. SMU is near 401.2. BOU is near 63.35. CU is near 6.19. WU is near 8.46. KWU is near 9.08. MWU is near 9.48.

US stocks are lower. US Dollar is higher. Crude is mixed. Gold, silver, sugar are higher. Copper, coffee, cocoa and cotton were lower.

Since June 10, SU has dropped from 16.04 to 14.04 and near 200 DMA. CU has dropped from a Mid-May high of 7.78 to 6.19 and near 200 DMA. WU dropped from a Mid-May high near 12.86 to 8.46 and below the 200 DMA. Futures have taken out all of the weather and tight supply premium and are below the pre Ukraine price levels. Markets are oversold but have no reason yet to rally.

Selloff began after USDA failed to raise US corn and soybean demand in May, US Midwest and north plains weather improved, heavy losses in equities and energies triggered large fund selling on margin calls, drop in consumer confidence and lastly US Central Bank raising rates and increase chances for a recession. High gas and food prices are beginning to slow demand and higher wages adds to inflation and could prompt future lower companies earnings.

Egypt and Pakistan is tendering for wheat. This could help wheat futures open higher.

IA and IL rains could open corn and soybeans lower. Palmoil futures are lower on weak vegoil prices and increase Indonesia export quotas. China covid lockdowns also reduced their soybean, vegoil and hog imports. Dalian soybean, soymeal, soyoil, plamoil and corn are lower.

Ukraine war continues to tighten World supplies of corn and wheat. Some feel Black Sea wheat exports could end up down 12-14 mmt from USDA est. US Midwest forecast suggest normal weather north and east Midwest but warm and dry SW. Best crops are in IA, WI, SD and IL. Lowest rated crops are in MN, OH, NEB, TN, KY.

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