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THE WEEK AHEAD
- Chinese markets are closed this week for Lunar New Year. Olympics begin at the end of the week as China and Hong Kong remain locked in to “zero COVID” policies. Hong Kong GDP was downgraded in the overnight as retail sales plummet.
- Economic price data comes hot and heavy this week as CPI,PPI and jobs data will be released in the Western world. The Bank of England is expected to hike rates this week, the ECB is not projected to hike at this point until 2023 at the earliest.
- US tech earnings will highlight as well, with Amazon being a bell weather considering wage inflation in this country.
- Exports will be key to watch this week as corn, beans and cotton break out above contract highs. FEB WASDE will be released next Wednesday. Until then it will be more weather watching out of S. America. Expect more private downgrades to bean crops in Brazil, Paraguay….the wild card is Argentina and the second crop corn in Brazil.
- Russia/Ukraine situation has not gone away over the weekend. US wheat traders will be very careful selling ahead as proposed US, EU sanctions on Russia could slash grain exports. The US and European allies have threatened to impose additional sanctions on Russia if the country’s forces enter Ukraine, something that’s sure to curb grain exports, according to Howard Shatz, a senior economist at the RAND Corporation .“Sanctions would make it harder to buy Russian products,” said Shatz. “There’s talk of cutting Russian access to SWIFT. An alternative would be to prohibit transactions with the US and European financial systems. ”The two proposals that would have the most impact on Russian exports would be cutting off Russia’s access to the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a global communication system linking financial institutions, and the other would be to block the country’s ability to use the US dollar and the euro. H/T Agricensus.
- GASC (Egypt) booked 230kmt on Friday, paying just over $325 dollars per MT (9.02 per bushel) before freight for Romanian, Russian and Ukrainian milling supply. Prices paid by GASC have leveled off from late fall bookings. Although one has to wonder how much of that has to do with quantity of supply purchased so far. With 5 months to go in the marketing year and only 1/3 of its projected purchases booked so far, Egyptian buyers have work to do in the coming few months.
CORN (front month continuous)
SOYBEANS / MEAL / OIL
KC WHEAT / CHICAGO / MINNEAPOLIS