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Futures Brief: Wheat and corn tumble on export reports | Company

Walt Breitinger

Wheat and corn prices fell all week on reports that Russia may allow exports from Ukraine. Domestic plantings also finally progressed, and foreign countries encountered shipping problems or ran out of funds to purchase US grain.

The price declines occurred despite high input prices (fuel, fertilizer, pesticides and labor), most of which were factored in last month.

Investors also ignored weather issues, especially extreme drought and fires in the southwest. Nationally, only 86% of our corn has been planted, 73% of our spring wheat and 66% of soybeans.

As of Friday’s close, July corn was trading at $7.27 and July beans at $17. July Chicago wheat was trading at $10.40, down more than $1 a bushel from last Friday.

Lumber stumbles as rates rise

The pandemic-related record boom in lumber prices slowed and then turned into a free fall as rising interest rates spooked home buyers and bankers.

Home prices have continued to rise, but builders and buyers can’t afford to chase higher prices with 30-year mortgage rates now above 5%.

Lumber for July delivery fell below $600 per thousand board feet, down 50% from the March high. July Wood was $629 at Friday’s close.

Crude, Diesel and Gas Sail to New Heights

On Monday, European leaders finally agreed on a Russian oil embargo. The response to the invasion of Ukraine will be phased over several months and will exempt oil delivered by pipeline.

Sanctions may punish Russia but will also increase energy prices and inflation across Europe and beyond.

The Organization of the Petroleum Exporting Countries has agreed to increase production to help struggling countries, but prices for crude oil and its refined products have soared all week.

OPEC countries are clearly taking advantage of the situation as they try to help by supplying the fuels.

On Friday, July crude hit $119.40 a barrel, July gasoline $4.25 a gallon and diesel for July delivery topped $4.30.

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