A selloff plagued grain prices yesterday on Chicago.
The activity was triggered partly by more rain in the forecasts and a quickly approaching harvest that will bring much-needed relief to historically tight supplies.
Corn prices fell as much as 3%.
Soybeans down as much as 4%.
Losses in wheat were less severe, even if most contracts falling 1.25% to 1.5%.
On macro markets, oil prices fell on this morning on concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries at the same time global producers plan to raise output.
Hurricane Ida shuttered or curtailed output at six refineries in Louisiana that process 1.92 million barrels per day (bpd) of crude, around 12% of U.S. refining capacity.
Consequentially, U.S. West Texas Intermediate (WTI) crude futures were down 41 cents, or 0.6%, to $68.80 a barrel at 0245 GMT, reversing most of Monday’s gains.
Brent crude futures for October, due to expire on Tuesday, were down 46 cents, or 0.6%, at $72.95 a barrel, after gaining nearly 1% on Monday.
The more active November contract fell 42 cents, or 0.6%, to $71.81.
The prices were also weighed down by weaker manufacturing data from China, where factory activity expanded at a slower pace in August compared with the previous month.
On the financial side, the S&P 500 and Nasdaq were set to hit all-time highs on Monday anchored by strong performances in tech stocks, as dovish remarks from the Federal Reserve last week bolstered optimism in an economic rebound and eased fears of a sudden tapering in monetary stimulus.
While the Dow Jones, in contrast, fell 56 points to close at 35.399 as with investors looking ahead to U.S. non-farm payrolls data, which could be key to the Federal Reserve’s tapering decision.
Asia stock markets, meantime, opened lower on Tuesday despite fresh all-time highs on Wall Street, as worries about China’s slowing economic growth and regulatory changes weighed on investor sentiment.
Thus, MSCI’s gauge of Asia Pacific stocks outside Japan slipped 0.25%, while Japan’s Nikkei 225 fell more than 0.3% in the morning session.
Hong Kong’s Hang Seng Index .HSI and China’s benchmark CSI300 Index opened down 0.1% and 0.2% respectively.
Australian shares, however, rose slightly for a second straight session, led by mining and technology stocks.
The S&P/ASX 200 was up 0.2% by 0130GMT.
Coming back on grains market, a fresh round of rains is coming across the Midwest and Plains later this week, with parts of Dakotas, eastern Nebraska and western Iowa set to receive another 1” or more, per the latest 72-hour cumulative precipitation map from NOAA.
The remnants of Hurricane Ida will also move through the Mid-South and Mid-Atlantic later this week.
NOAA’s 8-to-14-day outlook predicts seasonally dry weather returning to the upper Midwest and Plains between September 6 and September 12, with some cooler-than-normal temperatures spilling into the eastern Corn Belt next week.
Meantime, hurricane Ida could cause short-term logistical disruptions.
Damage to a Cargill terminal will take some time to clean up and interrupted movements will delay grain export flows.
Meantime, US weekly export inspections were mediocre, with 0.3Mt wheat, 0.56Mt corn and 0.38Mt beans.
One boat of milo was loaded to China.
As we can see, corn exports inspections, fell moderately lower versus a week ago.
Soybean export inspections jumped 57% higher week-over-week.
Wheat export inspections took a sharp turn lower compared to the prior week.
At the same time, USDA reported a flash sale (business done last week) of 256,000t new season beans has been sold to China.
On the other hand, after the close of the sessions, USDA published weekly US crop progress report that showed corn condition rated 60pc good-to-excellent, soybeans were at 56pc, and milo at 58pc.
Corn harvest progress was pegged at 50pc complete in Texas with other southern states also starting to rapidly push forward.
Spring wheat was estimated 88pc harvested nationally after the recent weather, against 77% last week and 71% to date on the average of the last 5 years.
In this context, North American futures settled between 1pc and 4pc lower.
Meantime, corn basis bids were steady to mixed, tumbling as much as 25 cents lower at an Illinois processor and trending 3 to 10 cents lower at two other Midwestern locations.
An Iowa processor bucked the overall trend after firming 10 cents higher.
Soybean basis bids were steady to weak after eroding 10 to 32 cents lower across four Midwestern locations.
From Canada, the eagerly awaited StatCan report on the Canadian harvest put all wheat production at 22.94 million tonnes, slightly above expectations, but well below last year at -34.8%.
The situation is most tense in durum wheat with a harvest estimated at only 3.99 million tonnes, down -39% compared to last year.
In barley, the harvest is estimated at 7.8 million tonnes, against 10.7 last year.
In Canola, production is estimated by Canada at 14.7 million tonnes, above expectations but well below last year by -24%.
From South America, new season (safra) corn plantings in Brazil are picking up, reported at 5% complete the other day.
M. Cordonnier expects Brazil’s 21/22 corn production 116-118mmt(+32-34 above 84mmt for 20/21).
USDA seeing 118 vs 87 in Aug20/21 as acreage will increase by 1 million ha or 5%.
In 21/22 season soy acreage up 4-5% to 40.5 million ha, it’s imply 143-145mmt as per M.Cordonnier (+6-8mmt YoY).
USDA forecasted 144mmt.
CONAB seeing soybean production of 141.3mmt, and for corn 115.9mmt
As always most of the crop is safrinha, with the safra plantings focused on beans.
Will back to these numbers in 4-5 weeks.
On European market, Euronext started its week on a barely bullish note for wheat and rapeseed, despite a strong international demand for and StatCan reports.
While on corn has weighed by the approach of the new crop and the lower prices applied in the Black Sea area.
Rapeseed, meantime, remains close to its highest levels of the year in a context where Europe will have to import at least 6 million tonnes to balance its balance sheets and after the publication of a Canadian report which confirmed a catastrophic harvest of canola (Canadian GMO rapeseed) to be expected for 2021.
From South Africa, South Africa’s Crop Estimates Committee anticipates the country’s 2021 corn production will improve 6.6% over last year’s output, reaching 16.316 million tonnes, citing an uptick in acres and generally favorable weather.
The crop is expected to consist of 8.765 million tonnes of white maize, used for human consumption, and 7.552 million tonnes of yellow maize, used mainly in animal feed, the CEC said.
From the Black Sea basin, according to the Ukrainian government, grain exports could reach for the campaign which has just started, 56 million tons divided between 20.7 million tons of wheat, 30.7 million in corn and 4.1 million in barley.
This can be compared to 44.7 million grains last year, divided between 16.6 million wheat, 23.1 million corn and 4.2 million barley.
Prices in the Black Sea basin remained firm yesterday, especially in wheat, while in corn it was stability that prevailed.
From Australia, yesterday local wheat markets were up another couple of bucks, albeit in quiet trade and with little origination business happening.
Most growers appear happy to wait before making further sales.
Weather remains in focus amid warmer temperatures and more chance of rain.
Internationally, Egypt’s GASC bought three boats of wheat – two Romanian and one Ukrainian about US$340/t C&F (including costings), about $10/t higher than last tender.
Russian offers were $10-15/t higher than alternatives.
Algeria’s tender ends tonight and the competition should remain tough.
We wish you a good day.
