Cotton, corn and wheat price continues to have upside potential. Developments regarding the Russia-Ukraine war and the Fed’s monetary policy are the main headlines that will affect prices. Evaluations and expectations in the Commodity Release prepared by Integral Investment are as follows:
Cotton
Cotton prices remained flat throughout the week. However, demand, which is expected to increase in the coming period with the news of China’s opening up, may be the driving force in the upward movement of prices along with supply issues. In the November USDA report, highland cotton production in the Southwest region (Texas, Oklahoma and Kansas) is estimated at 3.7 million bales, the lowest level since 2011. At the national level, all cotton production is forecast at 14 million 480 pound bales, down 20% from 2021. If realized, the 2022 US cotton crop will be the smallest in seven years. For these reasons, the pressure on cotton prices is expected to weaken during the year. Volatility in commodity prices is also expected with the Fed meeting next week.
Corn
Although corn prices were suppressed at the beginning of the week due to the weather conditions in the South American continent, new developments regarding the crisis in Russia and Ukraine led to a rise in corn prices. The news that some European countries, especially Germany, will provide military equipment support to Ukraine may put pressure on corn shipments in the grain corridor in the coming periods. According to the USDA’s report released in early January, corn production in 2022 declined on a global scale. It should be noted that the Russian-Ukrainian war and recession concerns have an impact on corn prices and production.
WHEAT
India’s wheat production is poised to jump to a record high after all-time high prices and good weather conditions prompted farmers to expand plantings with high-yielding varieties. Higher wheat production could encourage India, the world’s second-largest grain producer, to consider lifting a ban on exports of staple grains and ease concerns about persistently high food price inflation, it said. The world wheat production forecast of the Food and Agriculture Organization of the United Nations (FAO) was 781.1 million tons. The previous estimate was 738.8 million tons. FAO Global Grain Price Index was announced as -1.9% for December. It was realized as -1.20% in November. With these developments, wheat prices rose in the last week.
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