Futures File: Ship full of corn leaves Ukraine

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Aug. 6 – After weeks of negotiations, the first shipment of corn finally left the port of Odessa, passed inspection and headed for Lebanon. The Russia/Ukraine/Turkey/United Nations agreement that enabled the export is expected to provide a safe corridor for shipments of wheat, maize and other agricultural products.

Those goods are destined for countries desperate for food since the war halted Ukrainian exports.

US grain futures initially hit the news but gained momentum and rose sharply towards the end of the week. The rally was related to China’s purchase of US soybeans and fears that continued dry weather will threaten yields. The grain shipment from Ukraine impressed analysts, but many believe that logistics and politics can still delay the need to act so quickly.

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On Friday afternoon, corn for December delivery was trading at $6.10 per bushel. September wheat sold for $7.76. September beans went for $14.62, down about 40 cents a week.

No Panda for Pelosia

Complicating the political climate further was the much publicized trip of Speaker of the House Nancy Pelosi. Her trip, which received praise from both American political parties and democratic countries around the world, sparked anger and military threats from China.

By Friday morning, the Chinese had sanctioned Pelosi to visit their country and dropped missiles around Taiwan in retaliation. As our largest customer and trading partner for countless commodities, both agricultural and financial communities will be closely monitoring these developments.

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Petrol and diesel slide accelerates

The decline in crude oil and its refined product continued at a rapid pace throughout the week. Even the chatter of the saber, which typically causes a rush to buy petroleum, couldn’t stop the liquidation of West Texas raw and unleaded gasoline.

September gasoline futures traded at $2.86 a gallon, while September crude traded at $89 a barrel.

Reduction Act includes funds for farmers

After a final battle with D-Arizona Senator Kyrsten Sinema, Democrats moved forward early Friday with a $300 billion bill intended to reduce inflation, aid human health and fund climate-smart agriculture.

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About $21 billion of that is planned to reduce carbon emissions through carbon sequestration and other conservation efforts.

Answers to last week’s commodities quiz

The seven countries bordering Ukraine, with their respective leaders listed, are Russia, Vladimir Putin; Belarus, Aleksandr Lukashenko; Poland, Andrzej Duda; Slovakia, Zuzana Caputova; Hungary, Katalin Novak; Romania, Klaus Iohannis; Moldova, Maia Sandu.

Opinions belong solely to the author. Walt Breitinger is a commodity futures broker based in Valparaiso, Ind. He can be reached at (800) 411-3888 or www.indianafutures.com. This is not a request for an order to buy or sell a market.

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