Good morning Farmer Family …
USDA released its highly anticipated September WASDE report with mixed but mostly positive results, yesterday.
After that, soybean market took off, with prices soared as much as 5.38% higher, though they were still below the $15 mark.
Soymeal led the complex higher with 6.03% gains.
Bean oil prices also rallied, but closed comparatively weaker on just 2.49% gains.
Corn prices moved 1.61% higher, but stayed just under the $7 mark.
Wheat prices failed to follow suit, succumbing to a round of technical selling that generated small to moderate losses.
At the close, Chicago SRW wheat prices were 1.24% in the red.
Kansas City HRW wheat was 0.24% weaker.
Minneapolis spring wheat went home 0.11% in the red as well.
Corn and soybean production is down from 2021, according to the Crop Production report issued yesterday by USDA’s National Agricultural Statistics Service (NASS).
Corn production is down 8% from last year, forecast at 13.9 billion bushels.
Soybean growers are expected to decrease their production 1% from 2021, forecast at 4.38 billion bushels.
In this report, corn and soybean acreage were also reviewed, a month earlier than usual.
As a result, area planted to corn is estimated at 88.6 million acres, down 1% from the previous estimate; area planted to soybeans is estimated at 87.5 million acres, down 1% from the previous estimate.
The average U.S. corn yield is forecast at 172.5 bushels per acre, down 2.9 bushels from last month’s forecast and down 4.5 bushels from last year.
NASS forecasts record high yields in California, Virginia, and Wisconsin.
Acres planted to corn, at 88.6 million, are down 5% from 2021.
Area to be harvested for grain is forecast at 80.8 million acres, down 1% from last month and 5% less than was harvested last year.
Area for soybean harvest is forecast at 86.6 million acres, down 1% from last month but less than 1% more than was harvested last year.
Planted area for the nation, estimated at 87.5 million acres, is up less than 1% from last year.
Soybean yields are expected to average 50.5 bushels per acre, down 1.4 bushels from last month’s forecast and down 0.9 bushel from 2021.
If realized, the forecasted yields in Arkansas, Georgia, Illinois, Indiana, and Mississippi will be record high.
Factoring the production through the balance sheet, the WASDE report showed a 415 mbu lighter production from the August report.
On the demand side, USDA slashed total corn use by 250 million bushels, which includes 100 million fewer bushels for feed and residual use, 100 million fewer exported bushels and 50 million fewer bushels for ethanol production.
All told, supply is falling more rapidly than use, with USDA lowering ending stocks by 169 million bushels to 1.2 billion.
As for soybean, production is projected at 4.4 billion bushels, down 152 million with lower harvested area and yield.
Factoring a net 138 mbu lighter supply through the balance sheet, USDA lowered their 22/23 crush estimate by 20 to 2.225 bbu, and their export forecast by 70 mbu to 2.085 bbu.
Those compare to 2.205 and 2.145 bbu in 21/22 respectively.
That was not enough to fully offset the fewer beans in supply, leaving ending stocks at 200 million bushels, down 45 million from last month.
As for wheat, the 2022/23 U.S. wheat outlook for supply and use is unchanged this month.
The only U.S. wheat number changed by USDA was the farm price.
The projected 2022/23 season-average farm price (SAFP), indeed, is lowered $0.25 per bushel to $9.00 on reported NASS prices to date and expectations for cash and futures prices the remainder of 2022/23.
Despite the decline, $9.00 per bushel would remain a record SAFP.
As for corn, the season-average corn price received by producers is raised 10 cents to $6.75 per bushel.
As for soybean, the U.S. season-average soybean price is forecast at $14.35 per bushel, unchanged from last month.
Soybean meal and oil prices are also unchanged at $390 per short ton and 69.0 cents per pound, respectively.
Globally, corn production was 7.03 MMT lighter as Ukraine and China were lifted to offset some of the U.S. and EU cuts.
Ending stocks, figured at 304.5 MMT, were down 2.15 MMT from August.
As for soybean, the USDA showed a net 3 MMT lighter output, as non-reportables offset some of the U.S. cut.
Global trade was 1.2 MMT lighter as Argentina picked up 400k MT from the August estimate.
Global soybean ending stocks at 98.9 million tons are down 2.5 million mainly on lower U.S. and China stocks.
As for wheat, USDA boosted global wheat production 4.32 MMT, via a 3 MMT higher Russian wheat crop (91 MMT) and a 1 MMT higher Ukrainian crop (20.5 MMT).
However, the higher Black Sea wheat production was not shifted to exports, but rather their domestic use and stocks.
Global wheat stocks, indeed, were 1.23 MMT higher to 268.57 MMT.
Meantime, USDA’s weekly Export Inspections data showed that 446,620 MT of corn were shipped during the week that ended 9/8.
That was down from 531k MT last week, but was 267k MT above the same week a year prior.
As for soybean, data from USDA had 329,225 MT of soybean shipments for the week that ended 9/8.
That was down from 500k MT during last week, but was up form 193,894 MT during the same week last year.
The MY total shipment reached 381,524 MT.
As for wheat, USDA reported 736,225 MT of US wheat was exported during the week that ended 9/8.
That was up from 538,329 MT last week and compares to 567,438 MT during the same week last season.
Mexico was the top destination with +200k MT.
The MYTD wheat exports still trail last year by 783,715 MT with 6.4 MMT shipped through 9/8.
After the sessions close, NASS published the weekly Crop Progress report through 9/11.
As for corn, corn progress NASS found 95% of the corn crop was past the dough stage, with 77% dented.
That compares to 63% last week and 79% on average. A quarter of the national crop was mature, up from 15% last week and 5% points behind the average pace.
Harvest progressed 5% through the week and is running 1% point ahead of average.
As for crop conditions, NASS showed a 53% good/ex rating, down 1% from last week.
As for soybean, USDA’s report noted soybeans setting pods are at 97% across the top 18 soybean growing states.
The five-year average for this point in the season is 98%.
Twenty-two percent are dropping leave, behind the five-year average of 28%.
Soybean crop condition was rated 56% good/excellent, down 1% from last week.
Spring wheat is 85% harvested in the top six producing states, behind the five-year average of 89%.
Ten percent of winter wheat is planted, ahead of the five-year average of 7%.
In this context, corn basis bids were steady to weak on Monday, dropping as much as 40 cents at an Iowa processor and eroding 2 to 20 cents lower at five other Midwestern locations.
Soybean basis bids were steady to weak across the central U.S. on Monday after spilling 10 to 68 cents lower across five Midwestern locations.
The funds were net buyers yesterday for 9,000 lots of corn and 21,000 lots of soybeans.
They were net sellers for 7,000 lots of wheat.
On this morning, Chicago corn futures edged up in Asian trading, hovering near their highest levels since end June.
The most-traded corn contract on the Chicago Board of Trade, indeed, was up 0.1% at $6.96-1/2 a bushel, as of 04:10 GMT.
Soybeans rose 0.1% to $14.89-1/4 a bushel, also trading near the strongest since end June.
Wheat climbed 0.6% to $8.64 a bushel.
In energy markets, oil prices rose in volatile trade on Tuesday.
Worries about tight fuel supplies ahead of winter offset investor concerns about lower demand in China, and further increases in U.S. and European interest rates.
Thus, Brent crude had risen 50 cents, or 0.5%, to $94.50 a barrel by 06:44 GMT, while WTI crude increased by 52 cents, or 0.6%, to $88.30 a barrel.
Both contracts fell by more than $1 earlier in the session after WTI rose 99 cents to $87.78 on Monday, while Brent had gained $1.16 to $94.
In the United States, the Strategic Petroleum Reserve (SPR) fell 8.4 million barrels to 434.1 million barrels in the week ended Sept. 9, the lowest since October 1984, according to data released on Monday by the Department of Energy.
The American Petroleum Institute, will issue its inventory report at 4:30 p.m. EDT (2030 GMT) on Tuesday.
The U.S. EIA reports at 10:30 a.m. EDT (1430 GMT) on Wednesday.
Prospects for a revival of the West’s nuclear deal with Iran remained dim.
In ocean freight markets, the Baltic Exchange’s main sea freight index, rose on Monday as rates for larger vessel segments increased.
The overall index, indeed, was up for the fourth consecutive session, gaining 43 points, or about 3.5%, at 1,256.
Particularly, the capesize index gained 84 points, or 12.5%, at 756, marking its best day in a week.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as coal and steel-making ingredient iron-ore used in construction, were up by $696 to $6,270.
The panamax index was up for the eighth consecutive session, gaining 57 points, or 3.06 %, at 1,922, a one month-high.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, were up $516 at $17,302.
The supramax index, which has not seen a single session of gains since Aug. 24, lost two points to 1,473.
In equity markets, US stocks on Monday settled moderately higher for the fourth consecutive session.
A rally of more than +3% in Apple Monday lifted technology stocks as pre-order data for the latest versions of its iPhone point to strong interest and demand.
Also, the rally of more than +1% in crude oil prices lifted energy stocks and boosted the overall market.
A negative factor for stocks was the jump in the 10-year T-note yield Monday to a 2-3/4 month high of 3.375%.
Investors were waiting for U.S. government data they hope would say inflation peaked at a four-decade high of 9.1% in June and has fallen further after declining to 8.5% in July.
Hopes that inflation has peaked gave stocks a boost Monday.
Expectations are for Tuesday’s U.S. August CPI report to slow to 8.1% y/y.
Tuesday’s Aug core CPI is expected to edge a bit higher to +6.1% y/y from July’s +5.9%, but remain below March’s 40-year peak of +6.5% y/y.
In a note to clients Monday, Goldman Sachs said, “despite concerns that investors have about the U.S. equity market, we believe it offers greater absolute and risk-adjusted return potential than recession-plagued European markets.”
Thus, on Wall Street, the S&P 500 rose to 4,110.41.
The Dow Jones Industrial Average gained 0.7% to 32,381.34.
The Nasdaq composite rallied 1.3% to 12,266.41.
Meantime, Asian stocks followed Wall Street higher on Tuesday.
Shanghai, Tokyo, Hong Kong and Sydney advanced.
Particularly, the Shanghai Composite Index gained less than 0.1% to 3,253.92 and the Nikkei 225 in Tokyo added 0.2% to 28,614.53.
The Hang Seng in Hong Kong rose 0.4% to 19,442.89.
The Kospi in Seoul soared 2.9% to 2,452.69 and Sydney’s S&P-ASX 200 rose 0.7% to 7,013.70.
India’s Sensex opened up 0.6% at 60,504.83.
New Zealand declined while Southeast Asian markets gained.
In currency trading, the dollar eased to 142.11 yen from Monday’s 142.73 yen.
The euro rose to $1.0150 from $1.0117.
From Canada, Saskatchewan Ag reports that 40% of Saskatchewan spring wheat is harvested and assessed an average yield of 43 bu/acre.
This would be lower than the five-year average for Saskatchewan (excluding 2021) of 47.5 bu/acre for Saskatchewan.
The Canadian avg is 52.7 bu/acre.
Spring wheat harvest in AB is 40% done.
Alberta Ag assessed average yields at 52.8 bu/acre, which also is below the five-year average of 55.6 bu/acre.
In Manitoba, spring wheat is 31% harvested, with average yields reported at 60-70 bu/acre against a 59.2 bu/acre average.
Movement of wheat for week five was quite good with a very big 800k mt being taken into primary elevators and 248k mt loaded for export.
We note that there are 324k mt of wheat sitting in Eastern export terminals waiting for loading, plus another 181k mt on the West Coast.
As for durum, Saskatchewan Ag reports that 70% of Saskatchewan durum is harvested and assessed an average yield of 30 bu/ acre.
This would be significantly lower than the five-year avg for Saskatchewan (excluding 2021) of 40 bu/acre for Saskatchewan.
The Canadian avg is 40.3 bu/acre.
Spring wheat harvest in Alberta is 73% done. Alberta Ag did not give a yield assessment for durum.
Grain company purchases of durum picked up in week 5.
Particularly, 116k mt were taken into primary elevators, though only 11k mt were loaded for export.
We note that there are 165k mt of wheat sitting in Eastern export terminals waiting for loading, plus another 78k mt at the West Coast.
StatCan reports will due tomorrow.
From South America, forecasts for a return of rains in the later part of September should provide needed moisture for soybean farmers to plant a new crop.
Rains, indeed, are expected to reach most of the center-west area (Mato Grosso) as well as Southern states (Parana, Rio Grande do Sul), where soybean farmers are starting to plant the new crop.
In Europe, on Euronext, grain prices gave up some ground still in an undecided context on the sustainability of the export corridor in Ukraine, while the war seems to be taking another turn.
Meantime, France has signed an agreement with Romania to facilitate the transport of goods from Ukraine by land.
Rapeseed prices on their part, held up well yesterday in the wake of soybeans following the USDA report.
Meantime, France’s farm ministry on Tuesday reduced its forecast for the country’s drought-hit maize crop by 1 million tonnes to the lowest level since 1990.
Grain maize production was now expected to reach 11.61 million tonnes, or 11.33 million excluding crop grown for seeds, which was 8% below the ministry’s initial projection in August.
For soft wheat, estimated 2022 output was revised up for the second month, to 34.12 million tonnes from 33.87 million projected in August, although that would still be below last year’s volume and the five-year average.
From U.K., Britain’s wheat imports fell in July compared with the same month last year but corn imports rose, customs data showed on Monday.
Wheat imports for the month totalled 127,872 tonnes, down from 274,785 tonnes in the same month in 2021.
France was the largest supplier, shipping 52,744 tonnes followed by Canada with 34,798 tonnes.
Corn imports totalled 206,272 tonnes in July, up from 119,828 tonnes in the same month last year.
The Netherlands was the largest supplier of corn, shipping 66,360 tonnes following by Canada with 51,516 tonnes.
From North Africa, Egypt’s supply minister reported yesterday that the country’s strategic wheat reserves are sufficient to cover more than six and a half months.
From the Black Sea basin, the Ukrainian Agrarian Council said today that the country’s winter grain plantings could be 30% lower compared to a year ago due the war.
Ukraine has already started 2022 winter grain sowing and the agriculture ministry said last month it expects the winter wheat sowing area could shrink to 3.8 million hectares (9.3 million acres), down from 4.6 million a year earlier.
“The main reasons that encourage agricultural producers to reduce sown areas are the high cost of fertilizers, problems with the sale of grain, as well as too low purchase prices for agricultural products,” according to UAC.
Meantime, the ministry said that farmers had already sown 141,000 hectares of winter wheat, or 3.5% of the expected area, 7,100 hectares of winter barley, or 1.1% of the expected area, and 5,400 hectares of rye.
It also said farmers had sown 841,000 hectares of winter rape, 87% of the forecast.
Meantime, corn production in Ukraine this year is 24% lower than last year, and 5% below the five-year average to 32.0 million tonnes, the European Union’s crop monitoring unit MARS said on Monday.
For sunflower, the harvest is expected to drop 15% from a year ago to 13.9 million tonnes, 2% below the five-year average.
Some 4% of the grain maize, 10% of the sunflowers, and 7% of soybean production is in areas currently subject to hostilities, MARS said.
For winter crops, for which the harvest is over, the share is at 22% of total soft wheat production, 20% for barley and 13% for rapeseed.
Meantime, according to APK-Inform, the bid prices of Ukrainian corn continued growing at western borders and for delivery to certain European countries last week.
Particularly, the bid prices of corn for delivery in September-October increased to 225-240 EUR/t DAP Poland and Slovakia, 235-250 EUR/t DAP Hungary, 230-245 EUR/t DAP Romania and 305-325 EUR/t for delivery to Greece.
According to APK-Inform, the indicative FOB prices of Ukrainian wheat also strengthened last week for the first time in 3 months.
From the Middle Kingdom, China’s agriculture ministry on Tuesday kept its outlook for the corn crop unchanged from last month, despite high temperatures and low rainfall that impacted corn yields in parts of southern China.
The impacted area was limited and growth in northern China was better than last year, according to the Chinese Agricultural Supply and Demand Estimates (CASDE) report.
Corn consumption from the industrial processing sector is falling, it added, but demand from the livestock sector is set to increase thanks to better farming profits and lower use of wheat in feed.
From South East Asia, India’s palm oil imports in August jumped more than 87% from the previous month to 994,997 tonnes, while vegetable oil imports rose about 15% to 1.40 million tonnes, a trade body said on Tuesday.
Imports of soyoil fell about 53% to 244,697 tonnes while sunflower oil imports shed about 13% to 135,308 tonnes, a release said.
From Australia, Monday’s local markets were mixed.
Trade wheat markets gained $4-5/t over the course of the day, and firmer new crop grower bids fell away by $4-5/t as the day went on.
Canola bids eased $5-10/t.
Barley gained a little.
The 8-day forecast is for another wet week across NSW, Vic, SA and southern WA, predicting widespread 15-50mm.
On the international trade scene, Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy 97,373 tonnes of food-quality wheat from the United States and Canada in regular tenders that will close on Thursday.
Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 tonnes of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa.
The deadline for submission of price offers in the tender is Wednesday, Sept. 14.
Price offers are being sought for one consignment of yellow corn at a premium over the Chicago March 2023 corn contract CH3.
Shipment is sought between Nov. 1 and Nov. 20 if the corn is sourced from the U.S. Gulf, Brazil or Argentina.
If sourced from the U.S. Pacific Northwest coast or South Africa, shipment is sought between Nov. 16 and Dec. 5.
A similar tender from the group last week ended without a purchase.
That’s all, thank you.
We wish you a good day.
Author: Sandro F. Puglisi
