Good morning, Farmer Family …
US farm markets were shut for Juneteenth holiday, on Monday.
This morning, the most-active corn contract on the Chicago Board of Trade (CBOT) was up 1.6% to $6.07 a bushel, as of 04:01 GMT.
Soybean gained 0.9% at $13.54-1/2 a bushel.
Meanwhile, Chicago wheat prices edged lower, on profit takings, after reaching a two-month high in the previous session, losing about 0.2% to $6.86-1/2 a bushel.
Analysts expexts for the upcoming USDA 7-day crop progress report is for crop ratings to decline for corn and soybeans after lackluster rain events over the weekend.
On geopolitical front, Russia’s deputy foreign minister said on Monday that even if a deal allowing shipments of Ukrainian grain via the Black Sea ends, Russia’s agreement with the United Nations to ease its own exports will stay in force, Russian state news agency RIA reported.
In Canada, the Alberta Crop Report noted that for the week ending 13 June, soil moisture deficits remain significant, despite recent showers.
Hot and dry conditions, most notably in the central, northeastern and southern regions, have resulted in some crops exhibiting signs of stress and maturing at a faster than normal rate.
Meantime, crop conditions rated at 43pc good/excellent (75pc previous year, 76pc five-year avg).
Spring wheat is rated at 42pc (80pc year ago), durum at 63pc (61pc), barley at 36pc (77pc) and canola at 40pc (71pc).
Provincial surface soil moisture rated at 40pc poor (31pc previous week, 8pc previous year).
From South America, Brazilian farmers have harvested through last Thursday 4.7% of the area planted for their second corn crop in the center-south region, agribusiness consultancy AgRural said on Monday, up 2.5 percentage points from the previous week.
In Europe, wheat rose about 1% on dry weather concerns both in the EU and the USA.
Supporting wheat prices also the return of Algeria import tender.
Meanwhile corn market gained more than 2% despite a relative quiet session, as volumes were light due U.S. holiday.
In spite the recent rain in Europe, the latest European Commission MARS bulletin noted a strong weather contrasts, impacting negative on crop yield expectations in several regions.
The biggest downward revision has expected for spring barley.
Notably, average soft wheat yield was revised down marginally to 5.92 t/ha, from May 6.01 t/ha, but is still 2pc above the 5-year average.
Winter barley yields are now estimated at 4.76 t/ha, compared with 4.89 last month.
Average spring barley yield was revised down by 4pc and is now 11pc below the 5-year average.
For grain maize, MARS cut its 2023 yield forecast to 7.61 t/ha from 7.64 t/ha in May, though that was still well above last year’s drought-affected yield of 5.90 t/ha.
Rapeseed yield was expected at 3.29 t/ha, down compared with 3.34 t/ha in May, but is still 6pc above the 5-year average.
Thus, in spite a good volume of rain fell in east Germany in past days, persistent dryness in the north of Germany, continued to cause some concern.
Ditto in France, where storm showers in the weekend and widespread rain forecast this week in Europe have only tempered concerns a bit, capping gains.
From North Africa, Egypt’s strategic reserves of wheat are sufficient for six months, the state news agency reported on Monday, citing Supply Minister Ali Moselhy.
The minister said that Egypt has procured 3.6 million metric tons of local wheat so far, according to the agency.
As for rice and vegetable oils, the country’s strategic reserves are sufficient for 3.3 months and for 4 months respectively, the state news agency added, citing the supply minister.
Meantime, Egypt Minister of Agriculture and Land Reclamation, has said that 160,000 tonnes of fodder supplies worth $82m were released from Egyptian ports from 9 to 15 June.
He said, in a statement on Monday, that the released goods included 118,000 tonnes of corn at a value of $42m, 42,000 tonnes of soybeans at a value of $31m, and feed additives at a value of $9m, pointing out that the total that was released from 16 October 2022 to 15 June amounted to 5.8 million tonnes, including 4.3 million tonnes of corn, 1.5 million tonnes of soybeans and feed additives, with a total value of $2.8bn.
That aims to provide quantities in the markets of corn and soy, which are the basic ingredients for poultry feed as well as farm animals.
From Ukraine, the agriculture ministry said last week Ukraine’s 2023 spring sowing was almost complete at almost 13 million hectares.
Notably, Ag. Ministry reported that as at 16 June, 2023-24 spring planting was at 12.9Mha (13.4Mha previous year), including spring wheat on 271,100ha (191,100ha previous year), maize on 4.0Mha (4.6Mha) and spring barley on 810,000ha (951,400ha).
Sunflowerseed sowings complete on 5.3Mha (4.7Mha) and soybeans on 1.8Mha (1.2Mha).
Meantime, farmers in Ukraine’s southern region of Odesa have started the 2023 grain harvest, threshing the first winter barley.
Ag Ministry reported that as at 16 June, cumulative 2022-23 grain exports totalled 47.7Mt, just shy of the 47.9Mt exported over the same period a year ago, including wheat at 16.3Mt (18.6Mt), barley at 2.7Mt (5.7Mt) and maize at 28.2Mt (22.9Mt).
From Russia, as of June 14, farmers sowed 30.2 million hectares of grains compared to 28.8 million hectares in 2022, including 13.7 million hectares of wheat.
Temperatures are expected to be around normal or colder in all regions, in the coming days, with weather conditions in the Urals and Siberia are becoming more favourable.
However, abnormally wet weather in the south, may reduce the gluten and protein content.
Also, there is a growing number of reports of fusarium contamination, particularly in Krasnodar.
Thus, Russian wheat export prices have stopped their decline of recent weeks.
Notably, according to the IKAR, the price of Russia’s new wheat crop with 12.5% protein content, delivered free on board (FOB) from the Black Sea in July, was assessed at $228 a tonne compared to $223 a tonne the previous week.
As for the other products, price for domestic 3rd class wheat, European part of Russia, excludes delivery was at 11,225 rbls/t, +25 rbls/t (Sovecon).
Price for sunflower seeds was at 20,600 rbls/t, -275 rbls/t(Sovecon).
Price for d domestic sunflower oil was at 63,675 rbls/t, -650rbls/t (Sovecon).
Price for domestic soybeans was at 29,625 rbls/t, 0 rbls/t (Sovecon).
Export price for sunflower oil was at $7360/t, +$25/t (IKAR).
Price for white sugar, Russia’s south was at $728.92/t, -$11.73(IKAR).
In this context, according to port data, Russia exported 680,000 tonnes of grain last week.
That was down compared to 800,000 tonnes a week earlier.
That included 560,000 tonnes of wheat, also down compared to 770,000 tonnes a week earlier.
As a result, Sovecon estimated total Russian wheat exports in June at 3.0 million tonnes, down .
However, that are compared to 1.0 million tonnes in June 2022 and 1.4 million tonnes on average.
From the Middle Kingdom, China Customs data showed May wheat imports at 1.2Mt, taking cumulative volume since January 2023 to 7.2Mt (+63pc from previous year), cumulative barley imports are at 4.0Mt (+19pc) and sorghum 1.6Mt (-68pc).
For corn, total Chinese corn imports in May contracted 20% to 1.66 million tons from last year.
Notably, arrivals from the United States fell to 568,434 tons, down from 1.9 million tons a year ago.
Ukraine was the dominant supplier with 865,880 tons.
As for soybean, total soybean arrivals last month were at 12 million tons, the largest volume ever in a single month.
Notably, China’s soybean imports from Brazil soared 40% in May, compared with a year-ago period, data showed.
China indeed imported 10.94 million metric tons of soybean from Brazil, versus 7.79 million tons a year earlier.
However, in spite these large May arrivals from Brazil, arrivals in the first five months of this year from the South American country, were still at 20.15 million tons, down from 20.47 million tons level at this time a year ago.
Meanwhile, imports from the United States reached 923,529 tons.
That was down 47% from the year-ago level.
Still, U.S. shipments for this year so far stand at 19.16 million tons, well above 16.77 million tons last year.
From South East Asia, Malaysian palm oil pricces advanced for a fifth consecutive session.
Concerns over dry weather, indeed, are taking a toll on global production of palm and soybeans.
Thus, the benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 15 ringgit, or 0.4%, to 3,758 ringgit ($817.91) per metric ton, its highest since May 9.
Refinitiv Agriculture Research said in a note that the contract might extend the rally towards the resistance levels of 3,830-3,850 ringgit per metric ton this week, with support at 3,680-3,700 ringgit per metric ton.
From Australia, the country exported 593,671 tonnes of barley and 400,170t of sorghum in April, according to the latest data from the Australian Bureau of Statistics.
The barley figure comprises 470,448t of feed and 123,223t of malting, with the feed total being down 26 percent from the 635,917t shipped in March, and malting total down 12pc for the month.
Vietnam on 122,438t, Japan on 91,644t and Thailand on 91,570t were the volume destinations for feed barley, with Mexico on 99,000t followed by Japan on 20,612t the largest malting markets.
Sorghum exports jumped 73pc for the month from the 231,216t shipped in March to reflect the arrival of new-crop volume, with around three-quarters of it leaving Brisbane in bulk bound for China.
The sorghum harvest is going at full pace in Central Queensland, and is over in New South Wales and southern Qld.
In its Australian Crop Report released on June 6, ABARES forecast the Qld crop now being harvest at 1.69 million tonnes (Mt) over 480,000ha, while the NSW crop is estimated at 760,000t from 190,000ha.
Meantime, local markets started the week slightly firmer yesterday on both current and new crop.
New crop wheat markets were bid a few dollars stronger.
Canola was again the shining light, with bids firmer and more liquidity continued to trade.
East coast port values were around $670/t and some buyers had reached their tonnage limits by the end of the day.
The 8-day forecast has rainfall building, with a wider area of NSW now expected to see 5-15mm with some isolated falls of up to 25mm expected in the northeast and southeast.
SA is now expected to pick up a widespread 10-25mm that will extend into Vic.
WA is looking at 5-15mm and unfortunately Qld is still looking at a dry week ahead.
On the international trade scene, Algeria’s state grains agency OAIC has bought milling wheat in an international tender which closed on Monday with supplies expected to be sourced largely from Russia.
Tonnage bought was initially estimated at around 400,000 tonnes, but is believed to be around 570,000 metric tons.
About 300,000 metric tons was bought at around $261.50 a metric ton cost and freight (c&f) included.
About 100,000 metric tons mostly in a range of about $1 to $2 a metric ton above this level with the highest price spoken of at $264.50.
The wheat was sought for shipment in two periods from the main supply regions including Europe: Aug. 1-15 and Aug. 16-31. If sourced from South America or Australia, shipment is one month earlier.
Saudi Arabia state grain buyer booked 355k wheat from SALIC at an average price of 302,90 usd CnF for arrival August -December 2023.
Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 92,529 tonnes of food-quality wheat from United States, Canada and Australia in a regular tender that will close on Thursday.
In outside markets …
Energy markets were mixed, on Tuesday.
Brent crude was up 47 cents or 0.6% at $76.56 a barrel at 08:50 GMT.
U.S. West Texas Intermediate (WTI) crude for July was down 13 cents from Friday’s close at $71.65.
The July contract expires at the end of trade on Tuesday.
The more active WTI crude contract for August delivery was down 18 cents from Friday at $71.75 per barrel.
China on Tuesday cut two benchmark lending rates by 10 basis points each.
The cuts, the first in 10 months, were less aggressive than some forecasts.
Still, China’s 2023 crude oil demand is expected to rise 3.5% on last year.
On the other hand, two policymakers at the European Central Bank argued for more rate hikes.
Higher interest rates reduce appetite for spending and can drive down oil demand.
On the supply side, Iran’s crude exports and oil output have hit new highs in 2023 despite U.S. sanctions.
Russia is also set to increase seaborne diesel and gasoil exports this month, outweighing cuts by the OPEC+.
In ocean freight markets, the Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, edged lower on Monday, pressured by lower rates of the larger capesize vessel segment.
The overall index, indeed, lost 11 points, or 1%, to 1,065.
Notably, the capesize index was down 36 points, or about 2.4%, to 1,492 – its lowest in more than a week.
Average daily earnings for capesize vessels, which typically transport 150,000-tonne cargoes carrying commodities such as iron ore and coal, dropped by $299 to $12,375.
The panamax index was unchanged from the previous session at 1,193.
Average daily earnings for panamax vessels, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, dropped by $5 to $10,733.
Among smaller vessels, the supramax index rose 3 points to 751.
In equity markets, global shares mostly declined on Tuesday.
The Chinese government said the meeting between Xi and the top U.S. diplomat, Secretary of State Antony Blinken, produced “candid and in-depth” talks.
Both sides indicated a willingness to cooperate.
However, bilateral relations are at their lowest point in decades.
The meeting, indeed, yielded no signs of progress from either side on Taiwan, human rights, technology and other issues of contention.
Meantime, markets are watching the direction of interest rate hikes.
Chinese central bank cut its benchmark 1-year loan prime rate on Tuesday by a tenth of a percentage point to 3.55%.
The 5-year rate was lowered to 4.2% in a move to help ease credit and encourage spending and investment to boost economic activity.
Last week, the Federal Reserve held its benchmark lending rate steady, the first time in 10 straight monthly meetings.
Two policymakers at the European Central Bank, in contrast, argued for more rate hikes.
In this context, Japan’s benchmark Nikkei 225 inched up less than 0.1% to finish at 33,388.91.
Australia’s S&P/ASX 200 added 0.9% to 7,357.80.
South Korea’s Kospi lost 0.2% to 2,604.91.
Hong Kong’s Hang Seng dipped 1.5% to 19,607.08, while the Shanghai Composite edged down 0.5% to 3,240.36.
France’s CAC 40 inched down less than 0.1% to 7,312.73 in early trading, while Germany’s DAX slipped 0.4% to 16,134.01.
Britain’s FTSE 100 added nearly 0.1% to 7,592.28.
The futures for the Dow Jones Industrial Average and the S&P 500 were down 0.4%.
In currency trading, the U.S. dollar edged down to 141.66 Japanese yen from 141.91 yen.
The euro cost $1.0941, up from $1.0921.
That’s all, thank you.
We wish you a nice day.
Author: Sandro F. Puglisi
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