Commentary
Mondays WASDE report had USDA leaving its 2022-23 ending stocks forecast at 610 million bushels and made no changes to the supply or demand sides of the balance sheet. USDA 2022-23 farm price was at $9.00, down 25¢ from August. Global wheat carryover: 275.7 million metric tons for 2021-22, down 680,000 MT from last month; 268.6 million metric tons for 2022-23, up 1.2 MMT from August. As of Sept. 13, USDA estimated 54% of U.S. winter wheat acres faced some form of abnormal dryness/drought, including 87% of Kansas, 100% of Oklahoma, 75% of Texas, 60% of Colorado, 100% of Nebraska, 52% of South Dakota and 81% of Montana. Given the hot, dry outlook through December, the Seasonal Drought Outlook calls for drought conditions to persist or intensify across the Central and Southern Plains. Today saw a wide ranged swing in values today. In my opinion all wheat classes were steered off of Russian headlines that in my opinion altered direction in the US futures. Wheat falling 15 cents on a lull in headlines this AM amid some technical follow through selling. Then came Putin’s meeting details and his statements on the grain deal started seeping into the news carriers and wheat swung to 20 cents higher. Putin is now pressuring the UN to “explain” the implementation of the grain deal with Ukraine. Putin emphasized that it was US companies that were shipping Ukraine grain. Also said that Russia was willing to offer free fertilizer to developing nations if sanctions were lowered. Then Putin later implied the continuation of the grain deal would be threatened without some relief in export curbs on exports from Belarus and Russia. This is the second time the Russian President has issued this threat. In summation, with the war ongoing amid these comments, traders short covered into the close in my view.
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