Wheat Explodes on Russian Rumors
Moscow announced Friday morning that Russia is considering imposing a wheat export tax of $27 per ton to help stabilize domestic prices. A downgrade of the Russian crop size was at the center of the decision as Russia’s wheat crop is in poor condition. Some reports rate the Russian crop as the worst in a decade. Since Russia is the world’s largest wheat exporter, U.S. wheat prices should benefit. The U.S. domestic crop is large, and farmers welcome the demand to fill the potential Russian void. Wheat for March delivery in Chicago traded at $6.18, which is up over 40 cents compared to last Friday, while Kansas wheat was traded at $5.85 per bushel.
**Oats Lead Rally
Oats, currently in a significant upward trend, which started in August of this year, accelerated a rally during the first ten days of December. The cereal grain is most often used in livestock feed but is also grown for human consumption. The U.S., E.U., Russia, Canada and Australia are major oat producers. On Dec. 1, oats reversed dramatically and consistently, as other grains remained rangebound, testing the popular theory that oat prices lead other grains. Many experienced traders use the phrase “oats know” what the other grains will do in the future.
** Vilsack Picked to Lead USDA
President-elect Biden has chosen Tom Vilsack to lead the USDA. Vilsack previously served in the position for all eight years of the Obama administration. He has led the Dairy Council in the interim, and he’s also a former Governor of Iowa, which is the country’s largest producer of corn and hogs. Therefore, it’s logical producers of those commodities were fast to compliment the choice. The Vilsack nomination also got praise from the Corn Growers Association, Pork Producers Association and the American Farm Bureau. The USDA is well-known for supporting farmers, but it also plays a major role in funding food aid programs.
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