Clashing Markets



Chlashing markets-Market Insights_Feb 26-22
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Market Thoughts

Obviously, the Ukraine Russia situation is dominating everything. I’m not going to get into it here, but the ramifications to ag are pretty big. Both Russia and Ukraine are large agricultural producers. As it stands right now, we have zero clue on how this situation will play out. Questions like trade embargos, production issues and risk profiling will all play out in the next several months. These questions are important because they will ring home to Canadian farmers, which ultimately means price volatility.

Why This Matters

This matters because the global political situation is no longer stable. On top of that, inflation is running rampant. The ramifications are huge to any capital-intensive business, like farming, meaning that input prices are expected to rise and grain prices are also expected to rise. However, commodities will probably have some wild price swings that will make the difference between extreme profits or barely breaking even.

Bulls and Bears

Both Ukraine and Russia have become very large players in the world export market. If export programs in these countries have trouble, than expect a price rise for the respective commodities. Remember, the market is a fickle mistress. Don’t ever forget it. Ever.




Canola

Bullish:

· Ukraine/Russia conflict

· Dryness in Canada

· Indonesia palm oil export ban

Bearish:

· Most expensive oil

· Small supply causing export demand to dry up

· Neutral Soybean Market

Trend:

· Neutral old crop

· Slightly bullish new crop



Wheat

Bullish:

· Ukraine/Russia conflict

· Dryness in Midwest

Bearish:

· World supplies are ample

Trend:

· Neutral old crop

· Slightly bullish new crop



Barley

Bullish:

· Super Small Canadian Crop

· Dryness in Canada

Bearish:

· 90% of feedlots using corn exclusively

· Small supply prevents switching rations until sept.

· Export demand is dried up

Trend:

· Neutral to Bearish old crop

· Neutral to Bearish new crop

Quick Chart

Extreme Volatility. Price swings like this can be expected in the future as political instability and inflation have both raised their ugly heads. This is a good reason to purchase The Market Defender Program.






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