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Ukrainian Attack Damages Russian Grain Ports
The Russian port of Novorossiysk suffered damage to two major grain export terminals as a result of Ukrainian drone and missile strikes Wednesday. Three people were killed in the attack. Four Russian warships were also hit. Novorossiysk is one of the largest Russian ports used to export wheat. Most of Russia's Black Sea fleet is docked there. A major grain trading company confirmed that its terminals were hit. Russia retaliated by attacking Ukraine ports while President Putin threatened to attack areas outside of the Black Sea. Wheat prices increased as much as 40 cents per bushel this week. Regarding corn and beans, China continued to make purchases ahead of President Xi’s expected visit to Washington helping corn and beans to rally. Thursday's USDA crop report indicated that corn and bean yields were lower than analysts had expected.
Wheat, the Staff of Life
While wheat was the most volatile of all agricultural markets this week, it is also the oldest grain feeding human civilization. 10,000 years ago, the first wheat was cultivated in the Fertile Crescent, reaching ancient Greece, Egypt, Europe and then Asia. Wheat was brought to America in the 16th century, becoming the foundation of our diet well before corn, soybeans or oats were added to the menu. Today, wheat remains the primary ingredient in bread, pasta, pastries, pizza crusts and cereals, while also serving as an important component of livestock feed. The US gets the majority of its wheat from the great plains states Kansas and North Dakota. While wheat became the staple grain of much of Europe and North America, rice followed a similar path, originating in Asia before spreading to the Middle East and North Africa and eventually becoming the primary food source for roughly half of the world’s population.
President Trump's Options Narrow
Oil prices remained somewhat subdued as Trump and the Iranians continued to spar and express different accounts regarding negotiations to open the strait of Hormuz. Crude gained about $3 per barrel this week.
CME midday prices - November Soybeans, $11.86; September Corn, $4.56; September Wheat, $6.71. Livestock per 100 pounds: October Cattle, $219; October Hogs, $81.67. Metals per troy ounce: December Gold, $4,437; September Silver, $65, September Copper per pound: $6.60. September Crude oil per barrel: (WTI) $82.15. September S&P futures traded at 7802.25.
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Walt Breitinger is a commodity futures broker in Indiana. He can be reached at 800-411-FUTURES (3888) or www.indianafutures.com.
Pinion Futures, LLC, a CFTC registered Introducing Broker and NFA Member (NFA #0284447,) is a fully owned subsidiary of Pinion Risk Management LLC. Information contained herein is believed to be reliable but cannot be guaranteed as to its accuracy or completeness. Futures and options trading involve substantial risk of loss and is not suitable for all investors.