Early Market Talk September 22, 2022

Emtwebsite

Two-sided overnight trade on decent volume especially in soybeans. At 0545 CZ22 1¢ higher at $6.86 1⁄2 in a 9 1⁄2¢ range. SX22 6 3⁄4¢ higher at $14.68 in a 27 1⁄4¢ range Soybean trade vol at just over 30K contracts.

Dow futures 51 pts higher at 30,337. US $ higher and at the highest level since June of 2002. I’m old enough to remember when daily market calls were based on the US $ price moves. The highest $ level since ’02 and its crickets. 

One group loving the strong US $.........The Brazilian soybean and corn producer. 

Federal Reserve will raise interest rates as high as 4.6% in 2023 before the central bank stops its fight against inflation according to their report yesterday. 

Recession looms with the above. Adding a thousand dollars a month to a modest mortgage payment will crush home sales and housing starts. Select “elected” leaders will then scream for higher wages. The wage / Price spiral that every first- year economics student learns continues. 

Trade can talk about demand all they want. Well respected Farm market consultant points out an interesting fact. The reason CZ22 is nearing $7.00 into the teeth of harvest is that this year and the previous few, production is near a combined 4 billion bushels less than early projections. A couple years of trend yields solve for X. 

“Vote” in portions of eastern Ukraine on whether the regions will join Russia is set to start on Friday. Tensions rising. 

Ethanol production down 3% from a year ago, stocks 12% above. Weekly corn grind totaled 90.8 mln bu. And below the weekly target of 100.5 mln bu. Ethanol margins remain positive this week. 

Export sales report this morning at 0700. Corn sales expected between 400 – 850K tonnes. Soybean sales of between 500 – 1,000K mmt. 

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