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Usually, the conversation in March centers around spring weather and planting intentions. However, that is currently being overshadowed by the escalation of the conflict between Russia and Ukraine. The U.S. and E.U. have placed sanctions against Russia, including removing them from the SWIFT financial system, a network that facilitates the transfer of money between banks. However, Russia can bypass this by going through China. If the U.S. wants to seriously squeeze Russia, it should lift restrictions on oil production, become energy independent again, and increase exports to Europe. Regarding corn, exports continue to improve with inspections last week at 60.7 MB. The pace of shipments to China is also increasing, rising 37 percent since early February.
A few weeks ago, dry weather in Brazil dominated the discussion among traders. However, it has since taken a backseat because of the conflict between Russia and Ukraine. In the meantime, soybean harvest is underway in Brazil and running ahead of schedule at 44 percent complete compared to 25 percent a year ago. Conab recently conducted a survey of the damage caused by the drought which should be released soon. Looking at exports, inspections were rather shabby last week at 27.0 MB. Since early November, the pace of shipments has fallen 59.7 percent. China continues to make purchases, but deliveries to them have declined 68.8 percent during the same period.
Wheat has accelerated sharply higher this week because of the conflict between Russia and Ukraine. They both account for 28.5 percent of global exports. A loss in exports from them would have to be made up from the U.S., the E.U., and Australia. However, no pickup in U.S. exports have been seen yet with inspections last week a token 14.9 MB. Meanwhile, the pace of shipments has risen since early January.
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