US farm markets were mixed but mostly higher yesterday.
Soybeans jumped more than 3% higher.
Corn moved higher too, but only firmed by 1% to 1.5%.
Wheat prices were narrowly mixed with Chicago settled down -1.25 usc/bu closing at 732.25usc/bu, Kansas was -0.25 usc/bu lower to settle at 717.25usc/bu, while Minni rallied 5 usc/bu to go out at 910.75usc/bu.
On macro markets, oil prices fell on Wednesday, taking a breather after a strong rally this week spurred by the loss of a quarter of Mexico’s production and signs that China, the world’s biggest importer, has curbed a recent coronavirus outbreak.
Thus, U.S. West Texas Intermediate (WTI) crude futures fell 25 cents, or 0.4%, to $67.29 a barrel by 01:51 GMT, while Brent crude futures dropped 22 cents, or 0.3%, to $70.85.
Both benchmark contracts rose by about 8% over the previous two days, erasing most of the slump from a seven-day losing streak.
Prices mainly climbed because of the loss of more than 400,000 barrels per day of supply in Mexico after a fire on an oil platform.
Demand in the United States, the world’s biggest oil consumer, appears to be holding up well.
Indeed, according to the latest data from industry group The American Petroleum Institute, crude inventories fell 1.6 million barrels for the week ended Aug. 20, while gasoline stockpiles fell 1 million barrels.
Official data from the U.S. Energy Information Administration is due to be released today at 14:30 GMT.
On the financial side, tech and pharmaceutical stocks have turned in strong performances so far this week.
Consequentially, on Wall St., the Dow trended 30,55 points higher trading to 35,366, while the Nasdaq carved out a new record high of 15,019 points.
The S&P 500 e-minis, were down 0.02% meantime even if remain at a record.
Asia has been anchored by overnight gains in all three major U.S. stock indexes.
Thus, MSCI’s broadest index of Asia-Pacific shares outside Japan was last up 0.34%, and about 4% higher so far this week.
Australia’s market rose 0.22%, South Korea gained 0.16%, Japan’s Nikkei was flat, though Chinese blue chips fell 0.07%.
In early European trades, the pan-region Euro Stoxx 50 futures and FTSE futures were both up 0.04%, meantime.
Coming back on grains market, ample rainfall is headed for Minnesota and Wisconsin between this morning and Saturday, with some areas set to receive another 4” or more, per the latest 72-hour cumulative precipitation map from NOAA.
Areas farther south could still see measurable moisture, but significantly lower accumulations are in store.
NOAA’s 8-to-14-day outlook predicts seasonally warm, wet weather for most of the central U.S. between August 31 and September 8, meantime.
Meantime, crop analyst Michael Cordonnier pegs the US national corn yield at 175.5bu/ac.
With crop conditions sliding the spread between condition-based models and boots-in-the-field models continues to widen.
In this context, the lower-than-expected row crop quality ratings lent support both to corn and soybean, stimulating demand with USDA that has confirmed yesterday sales of 132 kt of US soybeans to China and 125 kt of corn to Mexico.
Consequentially, total US new crop corn sales to date amount to 18.5 million tonnes (Mt) practically equal to last year’s record forward sales.
This compares with full year USDA forecast corn exports of 26Mt.
The next USDA report will be released on September 10.
Unlike soybeans and corn, wheat prices lost ground yesterday, mainly on profit taking due to the sharp rise in prices that followed the USDA report earlier this month.
In this context, corn basis bids tilted 5 cents higher at an Illinois river terminal while holding steady elsewhere across the central U.S..
Soybean basis bids dropped 5 to 20 cents lower at three Midwestern processors while holding steady elsewhere across the central U.S..
From Canada harvesting across the Prairies largely came to a halt over the weekend due to ample showers.
Parts of Saskatchewan and Manitoba received 25 to 75 millimeters of rain, which will benefit later planted and slower developing crops.
However, the moisture is of little benefit to canola and cereals.
Statistics Canada releases its next crop production report on Monday, August 30.
Ahead of that, analysts estimate Canadian all wheat production at 22.600.000 t.
That would be 35% below last year’s total, if realized.
From South America, Argentine growers have sold 27.9 million tonnes of soybeans from the 2020/21 season.
The data are updated through Aug. 18.
The pace of sales was behind that of the previous season.
The 2020/21 soybean harvest in Argentina ended in June with a harvest of 43.5 million tonnes
Regarding corn, the ministry said 37.7 million tonnes had been sold from the almost-concluded 2020/21 season, about 3 million tonnes more than sales registered at this time last year.
The exchange expects a 2020/21 corn crop of 48 million tonnes, with about 95% of the harvest having been completed.
Meantime, the low water level of the Paraná River pushes down FOB prices of Argentinian corn, soybean and its by-products.
On the other hand, Brazilian farmers who had coffee fields severely damaged a month ago by the worst frosts in 27 years have started taking out dead trees to make room for new plantings, with some of them planning to switch part of the affected land over to grains.
On European market, wheat prices changed little yesterday, despite the slight decline in Chicago.
Wheat was mainly supported by the production estimate posted by Agritel for France, at only 34.93 million tonnes, well below the figures expected a few weeks ago.
Admittedly, the 2021 harvest will be much higher than the catastrophic one of last year, 29.18 million tonnes, but it is below the average for the past 10 years.
This further reduces availability in the main exporting countries, putting the global balance sheets strained.
Corn prices firmed yesterday amid new fears over US production, in the grip of a new heat wave, which is combined with that which continues in Argentina.
On the other hand, rapeseed started to rise sharply yesterday, supported by the rebound in canola prices, with a climatic situation that has been most adverse in Canada in recent months, penalizing production in the leading exporting country of this seed in the world.
Meantime, European Union soft wheat exports for the 2021/22 marketing year have reached 2.903.112 t through August 22.
That’s 8.6% above last year’s pace so far.
EU barley exports are also moderately higher year-over-year, with 1.991.395 t.
European Union soybean imports during the 2021/22 marketing year reached 1.730.894 t through August 22, which is down 22% versus a year ago.
EU soymeal imports are lagging 35% below last year’s pace, with 1.83 million metric tons over the same period.
The European Commission also reported that EU corn imports for the 2021/22 marketing year reached 1.844.136 through August 22, which is trending 9.8% below last year’s pace so far.
From the Black Sea basin, according to the Russian AgMin, grain was harvested from 29.9 MHA, for a total of 84.7 MMT, with a yield of 2.83 MT/HA.
That included wheat harvested from an area of 19.9 MHA, for a total of 62.2 MMT, with an average yield of 3.13 MT/HA.
Barley was harvested from an area of 6 MHA, for a total of 15 MMT and an average yield of 2.5 MT/HA
Meantime, russian farmers started also sunflowers harvesting.
According to Rosstat total area planted was at 9.7 mln ha, usda reported 9.3mln ha.
From the Middle Kingdom, China released new guidelines to manage price indexes for commodities and services while seeking public consultation for them until Sept. 6, as part of broader measures to regulate the country’s commodities markets and manage price and information transparency.
The guidelines apply to the collection or usage of price information of goods and services in China, or price index behaviour that has “important impact” on the commodity and services market within China, said a statement by the National Development and Reform Commission (NDRC).
Price regulatory departments under the state council or provincial governments will evaluate and review commodity and service price indexes, according to the guidelines.
Price index providers are to carry out self-assessments every first quarter from 2022 onwards, and price indexes should undergo a trial for at least six months before being officially launched.
If price index providers are found to be non-compliant or in violation of regulations, their activities will be suspended and they will be included in the “dishonest enterprise” list, as well as the national credit information sharing platform.
The guidelines however do not give further information on the “dishonest enterprise” list.
The agricultural sector, indeed, is not immune from those with what would be regarded as having extreme wealth.
Meantime, China has sold 295k of soybean reserves.
Sinograin is about to go through weekly auctions up to 2 mmt total sales.
From Australia, there is more confidence in growers, given the recent rainfall through NSW in the past 48hrs.
However, frost risk remains on the cards towards the back end of this week through parts of NSW even if it still feels like there is enough moisture underfoot through WA, SA, and parts of Victoria at the moment to minimize that risk over the next week or so.
Scattered showers are predicted over the next 8-10 days for southern parts of WA, SA, and 5mm across most Victorian cropping belt.
Consequentially, the early crops up in northern NSW and Queensland are now coming out in head and looking fantastic, but big bulky crops will need a kind finish as always.
Meantime, local cash markets were a fraction stronger across the day on both new and old season, however liquidity in the trade has been thin.
Grower activity on new crop has been quiet so far this week, even if growers could stepping higer for another round of selling at current high values.
In this context, old crop bids continue to come to the table for September onward for cover as those bids take a step higher by $5/t along the east coast and the domestic South Australian market.
SA remains very tight and, with values around $385-390 on wheat, it continues to open up that Victorian drawing arc on grain to flow back into SA.
Internationally, importers in the Philippines are tendering to purchase an estimated 168,000 tonnes of animal feed wheat.
The deadline for price submissions is Thursday, Aug. 26.
The wheat was sought for shipment in September and October in three consignments of 56,000 tonnes from differing origins.
The first consignment was sought for shipment from the European Union/Black Sea region between Sept. 17 and Oct. 7 or between Oct. 2-22 if supplied from Australia.
The second consignment was sought for shipment from the European Union/Black Sea region between Oct. 1-21 or Oct. 16 and Nov. 5 from Australia.
The third consignment was sought for shipment from the European Union/Black Sea region between Oct. 14 and Nov. 3 or between Oct. 29 and Nov. 18 if sourced from Australia.
Importers in the Philippines bought a total of around 165,000 tonnes of Australian animal feed wheat and Australian feed barley in a tender last week.
In Moroccan import tender for US Durum wheat, as predicted, there was no offers.
We wish you a good day.
