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Risk On, Risk Off. Grains Are Lower

MORNING OUTLOOK

Grains are lower. SF is down 8 cents and near 14.48. SMF is near 405.6. BOF is near 74.33. CH is down 5 cents and near 6.64. WH is down 16 cents and near 8.32. KWH is down 11 cents and near 9.42. MWH is down 10 cents and near 9.72.

US stocks are higher. US Dollar is lower. Crude is higher. Gold, silver, coffee, cocoa, sugar and cotton are higher. Risk on risk off. Some are reporting that missiles that hit Poland may have been from Ukraine air defense. So far, almost all G20 members have condemned the increase Russia attacks.

China Covid cases continue to rise with over 20,000 cases yesterday. This is increasing new concerns that the recent easing of restrictions might be reversed.  US NOPA October crush that was a184.4  mil bu. NOPA oil were below last year. S America was quiet yesterday with Brazil on holiday. Matif rapeseed was lower due to improved optimism over Black Sea movement of grains and oilseeds. Asian markets are again mixed with beans flat, meal is slightly higher, soyoil higher but the other vegoils are down. Palmoil is at a 2-week low and is extending the losses which began with last week’s October stocks number which rose for a 5th straight month to a 3-year high.

Corn futures also rallied on news of Poland city being bombed. Overnight corn is giving back some of Tuesdays gains. CH tested 6.77 on Tuesday and is now near 6.63. Support ranges from 6.60 to 6.50. Corn futures remain on a downtrend from Oct 31 high. Much of this is due to drop in demand for US corm exports. Both Brazil and Ukraine corn export prices remain below US. Prior to the attack there were strong rumors that Russia might extend the Ukraine corridor deal. There a few market watchers that will be watching S Brazil and S and E Argentina as forecast have turn drier. Recent rains will help Argentina farmers increase crop plantings.

WH had an outside day Tuesday with range of 8.20-8.62. Talk that missile that hit Poland may have been part of Ukraine defense system has overnight wheat futures lower. WH has had an inside day between 8.28 and 8.54 and is near the low at 8.28. The market now awaits NATO’s response from the G-20 summit, plus a decision on the Ukraine export corridor. In other words, the wheat market is still about geopolitics. Matif wheat closed lower despite another big week of exports and reports that France had sold several wheat cargoes to China for Jan-Mar. US south plains remains dry. Russia is cold. Australia wheat quality still in question. WH support 8.00 with resistance 8.50.

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