Commentary
Nearby soybeans rose for the third consecutive day behind strong demand and strength in global vegetable oil markets in my opinion. Malaysian palm oil futures rose for a third straight session, while crude oil futures are up more than $5.00 a barrel. Egypt’s state grains buyer bought 80,000 MT of soy oil, paying 14% more per MT than it did in its previous tender in February, Reuters reported. This is Egypt’s first purchase of vegetable oils internationally since Russia’s Feb. 24 invasion of Ukraine. Strong gains were seen across the all the grains last night into this morning. Old crop corn and bean contracts are near contract highs while new crop corn and beans make new contract highs. Wheat has been a wild roller coaster, but in my view still bough on breaks. Until the market sees potential resolutions to the war in Eastern Europe and the potential weather disruptions that have occurred in South America play out, with production numbers becoming a known, the grain markets may remain well supported. . There is some conviction that tight energy and agricultural supply will remain in short supply amid strong demand over the next year. That in my view is keeping the managed money deeply invested in the these sectors and unless the market sees supplies increasing to meet demand maybe unexpectedly, the buy the dips mentality may continue as an inflation play.
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