Yesterday, US farm markets followed a broad range of other commodities, including energy, closing moderately higher.
An afternoon rally left corn prices at $7.834, up 0.93%.
The May contract set a new high on the day at $7.86 1/4.
New crop prices also set new highs, with Dec at $7.37 1/2, although it closed at $7.356.
Soybean managed more modest gains in a sometimes choppy session.
The May contract closed at $16.76, up 0.34%.
July deadline was up by 0.27% ending at $16.65.
Soybean meal, in contrast, ended the day with 0.59% losse.
Soy oil set new highs, meantime.
For May delivery 78.11 cents/lb, was an all time high.
For the session the May contract gained 3.55%.
The wheat complex, on its part, continued its journey towards the peaks.
Amazingly, Chicago, Kansas City and Minneapolis contracts are all above $11 per bushel.
Indeed, May Chicago SRW wheat prices added 0.88% to $11.1340;
May Kansas City HRW wheat prices, rose 1.01% to $11.74;
May MGEX spring wheat prices picked up 0.24% to $11.59.
In energy markets, oil prices slipped this morning amid thin trading volumes ahead of a public holiday.
Asian buyers, indeed, have been absent today, with volumes potentially being curbed by the long weekend.
Also, traders weighed the larger-than-expected build in U.S. oil stocks against tightening global supply.
Oil stocks in the U.S., indeed, rose by more than 9 million barrels last week, the U.S. Energy Information Administration said on Wednesday, driven in part by releases from the nation’s strategic reserves.
U.S. gasoline stocks, meantime, fell 3.6 million barrels last week, far above anticipated levels, and distillate inventories also declined.
Thus, Brent futures were down $1.14, or 1.1%, at $107.64 a barrel, while U.S. West Texas Intermediate futures were off $1.32, or 1.3%, at $102.93 a barrel at 0632 GMT.
Both contracts Wednesday had ended the trading session roughly 4% higher.
The International Energy Agency on Wednesday warned that from May onwards roughly 3 million barrels per day of Russian oil could be shut-in due to sanctions or voluntary embargoes.
Major global trading houses are planning to curtail crude and fuel purchases from Russia’s state-controlled oil companies in May.
However, the probability of a EU ban on Russian oil being agreed may be almost zero, but no one will be able or wanting to say that clearly.
In freight markets, the Baltic Exchange’s dry bulk sea freight index rose to a one-week high on Wednesday, steered by gains across vessel segments.
The overall index, indeed, rose 33 points, or about 1.6%, to 2,068 points.
Particularly, the panamax index climbed 106 points, or about 3.7%, to 2,968 points.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, added $948 to $26,711.
The capesize index edged up 3 points, or 0.2%, to 1,371 points.
Average daily earnings for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, increased by $22 to $11,370.
The supramax index gained 13 points to 2,461 points.
On week 15, the Azov and Black Sea region maintains a high level of freight rates. Thus, the rate for a 3K wheat parcel from Azov to Marmara Sea ports is $83 per ton, Sea Lines shipbrokers report.
Despite the high export fees and some reduction in demand, freight rates are not decreasing, contrary to the expectations of many market players.
The main destination is Turkey, there are quite few requests for other destinations at the moment, although there are some shipments to Italy, Greece or Egypt.
The freight market is also actively growing in the Black Sea region, which affects the amount of tonnage in the Sea of Azov.
Market players expect that freight rates should still go down slightly in the coming week to allow charterers to successfully conclude trade contracts.
According to Sea Lines, on week 15, freight rates for wheat parcels from Azov made $78 to the Black Sea, $80 to Marmara, $95to Mersin and $97 to Egypt.
Freight rates from Rostov AB (after bridge) are $1 above, from Rostov BB (before bridge) the same, from Yeisk and Taganrog $1 below, and from Temryuk $3 below those from the port of Azov.
In the Caspian, freight rates remain stable.
On week 15, freight rates for shipping corn by 3,000 dwt bulkers to Iran make $20 from Aktau, $25 from Makhachkala, and $30 from Astrakhan.
In equity markets, U.S. stock indexes Wednesday closed moderately higher.
A decline in T-note yields Wednesday prompted a rebound in technology stocks.
The yield on the 10-year Treasury, fell to 2.68% also early Thursday from 2.72% late Tuesday.
Stocks moved higher Wednesday despite U.S. Mar producer prices rising more than expected at a record pace.
U.S. Mar PPI final demand, indeed, rose a record +1.4% m/m and +11.2% y/y (data from 2010), stronger than expectations of +1.1% m/m and +10.6% y/y.
Mar PPI ex-food and energy rose +1.0% m/m and a record +9.2% y/y, stronger than expectations of +0.5% m/m and +8.4% y/y.
Travel-related companies were among the biggest gainers on Wedsneday.
Delta Air Lines gained 6.2% after it reported strong revenue during its first quarter and solid bookings in summer travel.
Technology stocks also gained, particularly cybersecurity stock, after the Biden administration warned that hackers might try to access U.S. industrial control systems.
Also, U.S. stocks had support Wednesday also on signs that China may soon boost stimulus measures after China’s State Council vowed to cut banks’ reserve requirement ratios when needed to boost the economy.
Meanwhile, banks slipped following a disappointing earnings report from JPMorgan.
JPMorgan Chase fell 3.5% after it reported a -$524 million loss in Q1 and writing down nearly $1.5 billion in assets due to higher inflation.
In this context, the S&P 500 index rose 1.1% to 4,446.59, breaking a 3-day losing streak brought on by persistent worries about inflation and the tough medicine the Federal Reserve is planning to use against it.
The Dow Jones Industrial Average rose 1% to 34,564.59 and the Nasdaq picked up 2% to 13,643.59.
The Russell 2000 index surged 1.9% to 2,025.10 and is on track for a weekly gain.
On Thursday, the Commerce Department will release its retail sales report for March, which will show whether and where consumers are pulling back on spending.
U.S. stock and bond markets face a shortened week and will be closed on Friday for the Good Friday holiday.
Meantime, Asian shares were mostly higher Thursday after the advance on Wall Street.
Indeed, Tokyo’s Nikkei 225 index gained 1.2% to 27,167.69 and the S&P/ASX 200 in Sydney climbed 1.6% to 3,238.51.
Hong Kong’s Hang Seng rose 0.8% to 21,549.12 and the Shanghai Composite index advanced 0.7% to 3,207.85.
The Kospi in Seoul, meantime, slipped less than 0.1% to 2,715.27.
South Korea’s central bank raised its benchmark interest rate by 25 percentage points to 1.50%.
That was its fourth increase since August 2021.
Shares in Singapore were flat after the Singapore Monetary Authority tightened its policy by adjusting currency exchange rates in a more aggressive move than had been expected.
It also raised its forecast for 2022 inflation to 2.5%-3.5% from 2.0%-3.0%.
New Zealand’s central bank raised its benchmark interest rate on Wednesday.
Chinese government indicated China’s central bank may ease policy to counter the blow to its slowing economy from pandemic-related shutdowns in major cities like Shanghai and Guangzhou.
In currecy trade, the U.S. dollar slipped to 125.43 Japanese yen from 125.63 yen.
The euro rose to $1.0913 from $1.0888.
The dollar index on Wednesday fell by -0.379 (-0.38%) to 99.913.
On the weather side, there’s plenty of wild weather so far this week depending on where you live, from ample rains in the Midwest to a blizzard in the Northern Plains and tornadoes in the South.
Later this month, NOAA’s 8-to-14-day outlook predicts seasonally wet weather for the Plains and western Corn Belt, along with warmer-than-normal conditions for the Central and Southern Plains between April 20 and April 26.
On the demand side, the EIA reported ethanol producers cut back daily production by another 8k barrels per day in the week that ended 4/8.
That left the average daily production at 995k barrels, the first sub 1 million since the week of 2/25.
Ethanol stocks tightened by 1.1m barrels to 24.8 million.
Ahead the weekly Export Sales report, survey respondents expect between 850k and 1.7 MMT of old crop corn were sold during the week of 4/7.
New crop bookings are estimated to be between 300k MT and 800k MT.
As for soybean, are estimated to be reported between 300k MT and 1 MMT in today’s report.
New crop bean sales were estimated between 100k and 500k MT.
For the products, analysts surveyed expect between 50k and 300k MT of soymeal and less than 25k MT of soy oil was sold.
As for wheat, are estimated between 100k and 250k MT were sold for the week that ended 4/7.
New crop sales are expected to be between 100,000 and 400,000 MT ahead of USDA’s weekly report.
Also, NOPA is set to release March crush data on Friday.
Ahead of the release, analysts expect NOPA members crushed 181.991 mbu of soybeans in March.
Estimates range from 179.2 to 186 mbu, compared to last year’s 177.98 and Feb’s 165.05 mbu.
Member soy oil stocks are estimated at 2.135 billion lbs.
In this context, corn basis bids held steady at most Midwestern locations on Wednesday but did shift 4 cents higher at an Indiana ethanol plant.
Soybean basis bids were steady to mixed after rising 5 to 10 cents higher at two Midwestern processors and falling 3 to 8 cents lower at two other locations.
The funds were net buyers yesterday for 4,000 lots of corn, 1,500 lots of soybeans and 4,500 lots of wheat.
From South America, Brazil’s Anec estimates that the country’s soybean exports will reach 12 MMT in April, which is 8.1% higher than the group’s forecast from a week ago.
Anec also anticipates soymeal exports will reach 2.070 million metric tons this month.
Around 85% of this season’s crop has been harvested, which is in line with last year’s pace.
Meantime, forecasts that Brazilian producers will expand soybean planted area at a slower pace, to 42.5 million hectares (ha) in 2022/23, up from the estimated 40.7 million ha planted in the 2021/22 season.
USDA attaché forecasts 2022/23 soybean production at 139 million metric tons (MMT), up from the estimated 124.8 MMT harvest this season, assuming return to normal weather conditions.
The forecast is based on current market conditions and trends – including strong demand, high prices, and a favorable exchange rate.
However, the Russia/Ukraine war and resulting fertilizer supply concerns may constrain expansion.
Soybean exports are estimated lower at 77 MMT for 2021/22, then forecast to rebound to 87 MMT for 2022/23.
Meantime, Argentine grains truck owners, industry groups and government officials failed to make a breakthrough in talks to defuse strike action on Wednesday, raising a threat to shipments of corn and soy in the middle of the country’s key harvest season.
In Europe, markets remained extremely nervous.
Euronext, indeed, showed a turbulent session as wheat contracts has moved in scattered order according to deadlines, while corn prices were under pressure.
Rapeseed prices changed little, meantime.
Front-month wheat futures, extended a rally to a new one-month high, as a large purchase by Egypt provided an unexpected boost to France’s end-of-season export prospects.
Farm office FranceAgriMer, indeed, had earlier on Wednesday cut its monthly forecast of French soft wheat exports outside the European Union this season, citing uncompetitive prices.
Thus, the large volume of French wheat bought by Egypt surprised traders after French supplies were expected to miss out on an estimated 120,000 tonne purchase by Algeria on Tuesday, with cheaper Bulgarian and Romanian supplies tipped by traders to fill the Algerian order.
Export sentiment in Germany too was also boosted by Egypt’s tender, despite the importer passed on a rare offer of German wheat.
There are, indeed, many recent sales of German wheat to private importers in Egypt.
One ship sailed from Germany in recent days with about 60,000 tonnes for a private buyer in Egypt, traders said.
This followed another ship which sailed from Germany in March with about 50,000 tonnes for Egypt.
In this context, May futures, the last position for trading the 2021 crop, settled up 0.9% at 403 euros ($438.54) a tonne, after earlier climbing to 409.50 euros, its highest since March 7.
The front-month contract had already surged 5% on Tuesday.
As we said, FranceAgriMer had cut its monthly forecast of French soft wheat exports outside the European Union this season.
However the farm office FranceAgriMer , leaved its wheat carryover stock estimate almost unchanged at 2,996,000 t.
Third country exports indeed, is estimated at 9,500,000 t against 9,700,000 posted last month, but it was offset by a rise in intra-community exports to 8,057,000 t against 7,812,000 posted last month.
Thus their full export forecast was upped to 17.7 MMT.
In barley, the carryover stock stands at 1,265,000 t against 1,368,000 t last month and 786,000 t last year.
In corn, the carryover stock stands at 2,015,000 t against 1,969,000 t last month and 1,768,000 t last year.
FranceAgriMer has also raised its corn export target by 100 kt for the current campaign, to 5.8 Mt.
Meantime, non-commercial market participants added to their net long position in Euronext’s milling wheat futures and options in the week to April 8, data published by Euronext on Wednesday showed.
Non-commercial participants, which include investment funds and financial institutions, increased their net long position to 184,165 contracts from 176,175 a week earlier, the data showed.
Commercial participants expanded their net short position to 206,703 contracts from 191,261 a week earlier.
Commercials’ short positions accounted for 66.7% of the total short position, while commercial long positions accounted for 34% of total long positions.
Non-commercial short positions represented 33.4% of total short positions, while non-commercial net long positions accounted for 66% of the total longs.
In Euronext’s rapeseed futures and options, non-commercial market participants raised their net short position to 5,143 contracts from 1,830 contracts a week earlier.
Commercial participants flipped to a net long position, going to a net long of 3,423 contracts from a net short position of 12,439 contracts a week earlier.
Note that Euronext will be closed tomorrow Friday and next Monday due to the Easter holidays.
From the Black Sea basin, Ukraine’s corn exports could fall to 17 million tonnes in 2021/22, a senior agriculture official said on Wednesday, down from 23.1 million tonnes the previous yea.
Sunflower oil exports over the same period could drop to 3.4 million tonnes, down from 5.3 million tonnes, Deputy Agriculture Minister said.
Ukrainian officials have said the country’s corn stocks totalled about 13 million tonnes at the end of March, with only 300,000 tonnes of the grain exported during the month.
Ukraine has no plans to restrict exports of barley, corn, rapeseed, soybean, sunflower seed and oil, Taras Vysotsky, First Deputy Minister of Agrarian Policy and Food stated.
He added that Ukraine aimed to continue agricultural exports, despite the blockage of the seaports.
Annual inflation in Russia accelerated to 17.49% as of April 8, its highest since February 2002 and up from 16.70% a week earlier, the economy ministry said on Wednesday, as the volatile rouble sent prices soaring amid unprecedented Western sanctions.
Prices on nearly everything from vegetables and sugar to clothes and smartphones have risen sharply in recent weeks.
The central bank warned on Wednesday that consumer inflation in Russia will keep on accelerating in annual terms due to base effects, saying that rouble volatility will lead to upside inflationary pressure.
Weekly inflation in Russia slowed to 0.66% in the week to April 8 from 0.99% a week earlier, taking the year-to-date increase in consumer prices to 10.83%, data from statistics service Rosstat showed on Wednesday.
In the same period a year ago, consumer prices rose 2.72%.
In March, consumer prices in Russia jumped 7.61%, their biggest month-on-month increase since January 1999.
The central bank, which aims for annual inflation of 4%, cut its key rate to 17% from 20% on Friday and said future cuts were possible.
Inflation in Russia could reach between 17% and 20% this year, Alexei Kudrin, the head of Russia’s audit chamber, said on Wednesday.
Analysts in late March had on average forecast 2022 inflation to accelerate to 23.7%, its highest since 1999.
From South East Asia, Indonesia’s Energy and Mineral Resources Ministry reported Q1 biodiesel consumption at 2.5m kL.
The department aims to utilize 10.1 million through the year.
Malaysian palm oil futures ended lower on Wednesday after gaining for three straight days, as investor focus shifted to data that signalled a drop in exports.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange, indeed, fell 49 ringgit, or 0.79%, to 6,128 ringgit ($1,449.04) a tonne.
Exports of Malaysian palm oil products for April 1-10 fell 20.7% from the same period in March, according to cargo surveyor Societe Generale de Surveillance on Tuesday.
From Australia, feedgrains have traded mostly steady to higher this week as storm lotto continues in the north and a record grain-export program is at full tilt in the south.
With Australia this week in the first of three holiday-shortened weeks, and Queensland with an extra one for its May 2 Labour Day, trade sources say finding available drivers to carry booked loads is a major problem.
COVID-19 cases have further tightened the availability of drivers.
Consumers appear to be mostly covered into early May to cover the Easter and Anzac Day holiday weeks, and are nipping into the market when trade and export shorts are not.
Meantime, liquidity picked up leading into Easter.
Local trading activity continued to find a trading point yesterday and current crop wheat values were a touch firmer across the board. There is still a large premium for prompt delivery wheat if you can sort the logistics.
New crop wheat values firmed again, multigrade grower bids stronger by another $5-10/t.
Canola yet again went from strength to strength, another $10-15/t firmer by close of business.
Supply chain pressure leading into Easter not doubt will continue into the following short week, Anzac Day which will round out the month of April.
Domestic mills are running out of grain and export terminals facing mounting delays.
Deliveries are unlikely to become any easier any time soon now that planting is underway, the grower truck fleet drying up and rail issues likely getting worse now the Sydney line is down due to flooding.
Moisture has been added back into the BOM 8-day model for South Australia with the Eyre Peninsula set to see a system feed in from WA which is predicting 10-15mm event.
On the international scene, Egypt (GASC) purchased 350k MT of wheat for early June delivery.
The sale was primarily French origin with 240k, though Bulgaria was included for 50k MT and Russia sold 60k MT.
Thus, Russia will still feature in this program, as the seller supposedly has their own boats which allows them to get around the current constrictions on shipping.
It should to note, since the previous purchase made by Egypt, two months ago, CNF values have moved US$140/t, so far.
As for Algeria, it would have bought 120,000 t of wheat from optional sources, but probably Romanian or Bulgarian.
The price delivered in port is estimated at around 460 USD/t compared to 448 USD/t during its last call for tenders.
South Korea of 121,000 t of soybean meal of South American origin.
South Korean feedmaker Nonghyup Feed Inc (NOFI) has issued an international tender to purchase up to 138,000 tonnes of animal feed corn with the Black Sea region excluded as an origin.
The deadline for submission of price offers in the tender is also Thursday, April 14.
NOFI had only on April 12 bought 207,000 tonnes of feed corn in an international tender.
The yellow corn in the new tender is sought in two consignments of 45,000 tonnes to 69,000 tonnes.
For the first consignment for arrival around Aug. 10, shipment is sought if sourced from the U.S. Pacific Northwest coast between July 8-27, if from the U.S. Gulf between June 18-July 7, from South America between June 8-27 or from South Africa between June 23-July 12.
For the second consignment for arrival around Aug. 20, shipment is sought if sourced from the U.S. Pacific Northwest coast between July 18-Aug. 6, if from the U.S. Gulf between June 28-July 17, from South America between June 18-July 7 or from South Africa between June 3-22.
