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World factors continue to sway markets

Cesar Cruz of Advance Trading speaks at the Bank of Pontiac ag meeting at Fairbury.

FAIRBURY – As our own fields are still waiting to be planted here, farmers are closely monitoring the weather and other factors across the world.

Cesar Cruz from Advance Trading notes an agreement in the Black Sea region will soon expire between Russia and Ukraine. Ever since the Russian invasion a year ago, that caused a severe disruption in Ukranian exports of various products.

“Russia is probably going to try to benefit from something else,” Cruz told those attending the Bank of Pontiac ag meeting in downtown Fairbury.

Even if they keep exporting more than expected, we can still see problems in Ukraine this year.

“I don’t believe Russia is willing to sell fertilizer and diesel to Ukraine right now,” added Cruz.

Destroyed infrastructure from the war is a problem with big concerns over the quality of grain.

In China, people are going back to work but the question remains as to when China is going to come back to the market. There was a three percent increase in GDP for China this year which is not good compared to previous years.

“China has lost 40 million workers since the pandemic started,” explained Cruz.

When China slows down, they buy less products from everyone in the world such as corn, soybeans and crude oil. This impacts the United States. Year to date exports to China from the U.S. are the lowest in a few years. More exports will likely go from Brazil to China.

“There is more competition coming from Brazil.”

Argentina is having the worst drought in over 40 years and the upcoming WASDE report will likely have lower estimates for numbers out of Argentina. Things are getting worse there as they had a frost two weeks ago. This is the equivalent to having a frost in late July or early August here. Production estimates will likely be decreased in the coming weeks.

Growers in Brazil need to move at a faster pace because they have to plant the second corn crop. Frost is possible in southern Brazil in May, June or July.

Cruz noted Argentina has been importing beans from Brazil, buying from the northern ports. Brazil and the U.S. are the main players exporting new corn in the market.


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