Beans Smashed, Wheat Sprouts

Soybeans saw heavy liquidation from funds, fears of recession and fears of big Brazilian supplies and exports. The decline in palm, rapeseed, canola and petroleum-based oil prices added pressure on soybean oil as well.

Wheat, on the other hand, rose dramatically on Friday on continued fears that dry weather in the upper Midwest will cause low winter wheat yields. Freeze damage may have occurred to winter wheat in other U.S. regions. Rumors are circulating that President Xi agreed to buy Russian wheat, along with the rumor that Russia halted wheat exports because of the recent drop in prices. Export sales of corn helped prop up that crop, with thoughts that China could return for more. Weather predictions continue to be watched closely. There are fears of flooding in California, especially in areas that have recently suffered from drought.

Climate Chaos Avoidable?

In an urgent report from U.N. climate scientists, the Panel on Climate Change provided some hope that our planet may survive the ravages of global warming. Although civilization as we know it would be drastically changed, the panel’s extensive report indicated we may at least survive if drastic cuts in greenhouse gas emissions are achieved, particularly if we are ahead of their scheduled recommendations. In order to realize the limits recommended by the U.N. scientists, China and the U.S. would need to drastically reduce coal, oil and natural gas projects and the use of petroleum-burning vehicles and industry.

Chinese—Russian Ties to Impact Futures

The invasion of Ukraine and China’s hints of favoring Russia’s side have, at least financially, been weaving in and out of grain and energy prices daily. China’s aggression in the South China Sea, particularly in Taiwan and the Spratly Islands, remains a constant worry for the U.S. and our allies. President Xi’s visit to Russia— the first since 2013 — highlights cooperation between their countries, while U.S. agricultural and industrial commodities trades remain threatened. Like the volatile weather and domestic bank failures and inflation, investors have to monitor the changeable relationships of our allies and competitors.

Winners and Losers

Cocoa and orange juice rose sharply, as did precious metals. Silver was up the most at $23.25 per ounce. May gasoline went up 12 cents per gallon.

Soy meal was down the most, dropping $25 per ton by Friday’s close at $443. Cotton fell roughly 3.5 cents per pound. Crude oil, although volatile, ended the week nearly unchanged at $69.20 per barrel. Cattle and hogs dropped mid-week but settled unchanged compared to last Friday.