Everything but soyoil rallied in March with wheat the upside leader. Funds covered shorts and got long wheat on US production risks and added risk premium for Ukraine/Russia tensions. Corn was supported on strong export demand and extremely strong ethanol margins. The same themes continued to support beans and meal – we have oversold our supply and need to ration for the remainder of the crop year. Oil made new highs early in the month in sympathy with strength in beans and on dryness in Southeast Asian palm production areas but sold off as rains materialized.
Simultaneous, intense logistical snarls in both ocean-going shipments and North American rail transportation made for divergence between cash grain values and underlying futures contracts during the month. Part of what we do is forecasting how futures will act to realign regional imbalances, but this proved largely impossible as “uneconomic” dislocations abounded as never before: Cancellation […]