Good morning Farmer Family …
US farm markets fell on Thursday.
Corn gave back 1.24% on the day.
Soybean was down 0.53% helding above $15.50.
Soybean meal prices went home with 2.07% losses.
Bean oil were firmer, closing mixed with Sep 0.47% higher and the other nearbys less than 0.1% in the red.
Wheat prices have setback in all three marktes, after 4 days of gains.
Particularly, CBOT SRW wheat price went home with double digit losses as was down 3.18% by the close.
Kansas City HRW wheat prices ended the day 3.04% weaker.
Minneapolis HRS wheat prices closed with 2.75% losses.
In its weekly export sales report, USDA yesterday released some extremely bullish data.
Particularly, the report had shown, 320k MT of old crop corn sold and 155k MT for new crop, accumulated exports were 58 MMT and the total forward bookings for next year were 8.954 MMT.
As for soybean, USDA reported as 503k MT of old crop soybean sales and 4.7 MMT for new crop.
Accumulated shipments were MMT, and new crop soybean bookings were 21.74 MMT going into the upcoming season.
The report had shown wheat bookings of 409k MT with a season total export at 3.587 MMT.
All that, should have sent grain prices soaring.
However, no one really has believed to those numbers and with that in mind, traders largely ignored the report and engaged in some technical selling and profit-taking that broke a winning streak.
Yesterday, indeed, USDA’s Foreign Agricultural Service launched a new Export Sales Reporting and Maintenance System.
During launch, FAS encountered challenges that affected the physical dissemination of the data as well as data quality.
As a result, the agency has taken the system offline and retracted the weekly export sales information disseminated.
Meantime, farmers and commodity traders are closely watching the Pro Farmer Midwest Crop Tour.
Iowa’s corn yield prospects are on par with the three-year average, while soybean pod counts are above the three-year average, scouts reported on Thursday.
The Tour average for Illinois corn was at 190.71 bp, down 2.8% from year ago (2.7% higher than the 3 year average) on higher ear counts but less grain per ear than last year.
Scouts found that soybean pod counts in a 3-by-3-foot square in Illinois, the top soybean producing state, averaged 1,249.70.
That was down from 2021 but above the three-year average.
Minnesota’s corn yield prospects and soybean pod counts are higher than last year and the three-year average.
Particularly, Minnesota corn yields were projected at 190.39 bushels per acre (bpa), compared to the 2021 crop tour average of 177.44 bpa and above the three-year crop tour average of 180.96 bpa.
The estimated the amount of soybean pods in a 3-by-3-foot square in Minnesota was at an average of 1,100.75 pods, up from last year’s average of 1,027.33 pods and above the three-year average of 1,026.16 pods.
On the weather side, at least some measurable moisture will fall on most of the Corn Belt between today and Monday, with a few spots set to gather another 1” or more, per the latest 72-hour cumulative precipitation map from NOAA.
The agency’s 8-to-14-day outlook predicts below-average precipitation for the Northern Plains and upper Midwest between September 1 and September 7, with warmer-than-normal conditions spreading across the Plains and western Corn Belt during that time.
In this context, corn basis bids were mostly steady to weak after fading 5 cents lower at two Midwestern ethanol plants and an Illinois river terminal.
An Ohio elevator bucked the overall trend after tracking 3 cents higher.
Soybean basis bids were steady across the Midwest with one noticeable exception after tumbling 90 cents lower at an Iowa river terminal.
Commodity funds were net sellers yesterday for 5,000 lots of corn, 6,500 lots of soybeans and 8,000 lots of wheat.
Funds were also net sellers of soymeal and soyoil.
On this morning, corn prices climbed 1%, at $6.56-1/4 a bushel, as of 0319 GMT.
The corn market is rising for a seventh session in eight and poised for a weekly gain more than 5%, as hot weather conditions continue to impact the U.S. crop, raising concerns over world supplies.
Corn is trading close to a two-month high.
Soybeans rose this morning, while wheat ticked lower, although both soybeans and wheat have climbed more than 2% each this week.
Particularly, U.S. wheat prices, fell as concerns that high prices for wheat were depressing demand on the export market.
In energy markets, oil prices rose as much as $1 on Friday on signs of improving fuel demand, although further gains were capped as the market awaited clues from the U.S. Federal Reserve chairman on the outlook for rate hikes in a speech later in the day.
Thus, Brent crude futures climbed 99cents, or 1%, to $100.33 a barrel by 06:20 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 98 cents, or 1.1%, to $93.50.
Both contracts jumped in early trade by as much as $1 after slumping about $2 on Thursday.
However, both benchmark oil contracts on track for gains of around 3% for the week.
Signs of strong demand are emerging.
The most recent Congestion Index data from TomTom shows Asia Pacific, European and North American traffic levels all posting strong weekly growth in the week to August 24.
Congestion levels in China also rebounded.
In addition, the prospect of the OPEC curbing output to offset production increases from Iran supported prices this week.
In freight markets, the Baltic Dry index, fell 90 points, or 7.4% to reach a fresh 18-month low of 1,123 points on Thursday, extending losses for the second straight session.
Particularly, the capesize index, which tracks iron ore and coal cargos of 150,000 tonnes, tumbled 30.3% to an over two-year low of 474 points; and the panamax index, which tracks about 60,000 to 70,000 tonnes of coal and grains cargoes, continued its month-long decline, slumping 4.5% to 1,424 points.
At the same time, the supramax index snapped its nine-session winning streak, falling 10 points to 1,763 points.
In equity markets, US stocks moved sharply higher yesterday as falling T-note yields sparked a rally in technology stocks.
Stocks also received a boost from stronger-than-expected U.S. economic news.
Weekly initial unemployment claims indeed, unexpectedly fell -2,000 to 243,000, showing a stronger labor market than expectations of an increase to 252,000.
Also, U.S. Q2 GDP was revised slightly higher to -0.6% (q/q annualized) from the previously reported -0.7%.
Market sentiment also received a boost Thursday after China stepped up its stimulus measures with 1 trillion yuan ($146 billion) of funding focused largely on infrastructure spending.
In this context, on Wall Street, the S&P surged 1.4% to 4,199.12 for its biggest daily increase in nearly two weeks.
The Dow Jones Industrial Average rose 1% to 33,291.78.
The Nasdaq composite climbed 1.7% to 12,639.27.
Investors are waiting the Fed’s Jackson Hole meeting in Wyoming.
This meeting attracts economists from around the world, and often has been the setting for market-defining announcements in the past.
Thus operators hope for clarity from Powell after Fed officials said they still supported rate hikes despite hopes inflation might be peaking.
Meantime, Asian stock markets followed Wall Street higher on Friday.
Tokyo, Hong Kong and Seoul advanced.
Shanghai was little-changed.
Particularly, the Shanghai Composite Index shed less than 0.1% to 3,244.98 while the Nikkei 225 in Tokyo rose 0.6% to 28,643.15.
The Hang Seng in Hong Kong gained 0.5% to 20,065.69.
The Kospi in Seoul added 0.1% to 2,480.46 and Sydney’s S&P-ASX 200 surged 1% to 7,118.20.
India’s Sensex opened up 0.4% at 59,031.50.
New Zealand, Bangkok and Jakarta declined while Singapore rose.
In currency trading, this morning the dollar gained to 136.89 yen from Thursday’s 136.46 yen.
The euro edged up to 99.71 cents from 99.69 cents.
From Canada, Refinitiv Commodities Research increased is 2022/23 Canadian wheat production forecast 0.7Mt, to 34.0Mt.
Despite recent hot weather, high vegetation density levels were observed across the southern Prairies, with 2022/23 rapeseed production forecast raised by 1pc, to 20.1Mt.
In Europe, markets were once again down yesterday.
This week was marked by more inquiries about washing out (cancelling) German wheat export contracts made at high prices earlier in the season than inquiries about new business.
Meantime, FranceAgrimer has published its qualitative estimates for wheat in France relating to 95% of volumes.
For protein, 27% of soft wheat analysed so far came below 11% content, often a minimum standard for milling markets, compared with 24% in initial results published last week.
Last year, just 5% of the soft wheat crop showed protein below 11%.
Particularly, the updated results showed 31% of soft wheat with 11-11.5% protein, against a 33% share last week, and 23% of the crop at 11.5-12%, unchanged from the previous week.
Some 19% of soft wheat was showing protein at 12% and above, against 20% in last week’s results.
For test weights, the updated survey results were slightly higher than the previous week, confirming a recovery from last year’s rain-affected levels.
Some 87% of the crop analysed so far was above the 76 kilo per hectolitre level widely used as a milling standard, compared with 85% a week earlier and just 31% in last year’s harvest.
For Hagberg falling numbers, 96% of the crop volumes assessed so far were showing readings above 240 seconds, unchanged from the previous week and compared with just over half last year.
On the other hand, French corn crop conditions declined last week to their lowest rating in more than 10 years, data from farm office FranceAgriMer showed, suggesting that recent rain has brought limited benefit to fields damaged by heatwaves and drought.
An estimated 47% of French grain maize crops were in good or excellent condition by Aug. 22, down from 50% the previous week, FranceAgriMer said.
On this wake, the European Commission lowered its forecast for 2022/23 corn production by nearly 10% to 59.3 million tonnes against another 65.8 estimated last month, as a result of the drought which is worsening almost everywhere in Europe.
The smaller crop led the Commission to raise its forecast of EU maize imports in the 2022/23 season to 20 million tonnes from 16.5 million expected a month ago, and to lower projected EU maize exports to 4 million from 5 million tonnes.
In contrast, the EU’s executive raised its forecast for EU usable production of common wheat, or soft wheat, to 126.0 million tonnes from 123.9 million tonnes projected in late July.
Projected EU soft wheat exports were unchanged at 36 million tonnes, leading the Commission to increase its forecast for end-of-season stocks by 2 million tonnes to 15.7 million.
In oilseeds, the Commission lowered again its forecast of the EU’s sunflower seed harvest, to 9.9 million tonnes from 10.5 million, reflecting weather damage like in maize.
For rapeseed, estimated 2022/23 production was revised up to 18.8 million tonnes from 18.0 million forecast last month.
Meantime, Germany’s grain and rapeseed harvest is better than expected, the German agriculture ministry estimated on Friday.
Germany’s 2022 winter wheat crop is expected to rise 4.6% compared with 2021 to a little more than 22 million tonnes, the ministry estimated.
Average protein content is 11.8%, down from 12.7% last year.
Germany’s 2022 winter rapeseed harvest will increase 22.3% from 2021 to almost 4.3 million tonnes, which the ministry said would be pleasing in light of the hot weather.
The grain maize crop is forecast to fall 21.5% on the year to about 3.5 million tonnes.
Despite lost maize, Germany’s total cereals crop is forecast to rise 2% year on year to about 43.2 million tonnes, it said.
In other news, Germany’s cabinet has approved a decree that prioritises the transportation of materials and equipment for energy production on particular rail networks in case water levels on the Rhine River continue to fall.
According to ship operators, water levels in the Rhine have risen recently after localised rains but are predicted to fall again amid mostly dry weather forecasts.
From Russia, the Russian Union of Grain Exporters anticipates the country’s July-August wheat sales will slump as much as 20% lower from year-ago totals.
The union cites “invisible barriers” and other logistical challenges, despite the lack of sanctions following the Russian invasion of Ukraine.
Since September 1, 2022, the export duty on sunflower oil in Russia will be decreased from 15,987 RUR/t acting in August to 8,621 RUR/t, Ministry of Agriculture of Russia informs.
Also, the export duty on sunflower meal will be decreased from 2,265 RUR/t to 1,579 RUR/t.
The indicative prices serving as a base for duties calculations are 1,583 USD/t for sunflower oil and 269 USD/t for sunflower meal.
From Ukraine, as of August 25, 2022, Ukrainian agricultural producers harvested 25.3 million tonnes of grain.
In particular, Ukrainian farmers have already threshed 18.8 million tonnes of wheat from 4.6 million hectares (98% of the projected area) with a yielding capacity of 40.8 quintals per hectare and 5.5 million tonnes of barley from 1.6 million hectares (99%) with a yielding capacity of 34.6 quintals per hectare.
In addition, Ukrainian farmers have already gathered 18.8 thousand tonnes of sunflower seeds from 23.5 thousand hectares (1%) with a yielding capacity of 8.0 quintals per hectare and 3.1 million tonnes of rapeseed from 1.085 million hectares (99%) with a yielding capacity of 28.4 quintals per hectare.
Meantime, according to available data, 34 ships left three Ukrainian ports (Odesa, Pivdennyi and Chornomorsk) from August 1 to 23 carrying almost 724 thsd tonnes of agricultural products.
Corn accounted for 68% of the overall export volume, wheat – 14%, and meal – 10%.
Soybean, sunflower seed and oil, mix feed were also shipped for export through the ports.
Turkey and South Korea were the key destinations for Ukrainian food. In total, shipments were made to 12 countries.
As of 25 August, the total tonnage of grain and other foodstuffs exported from the three Ukrainian ports was 845,496 metric tons.
According to the State Customs Service of Ukraine, since the start of 2022/23 MY (July 1) and as of August 26, Ukraine has exported 3.408 mln tonnes of grains and pulses, including 1.707 mln tonnes so far in August, the Ministry of Agrarian Policy informed.
The total included 937 thsd tonnes of wheat, 274 thsd tonnes of barley, 2.18 mln tonnes of corn, 0.4 thsd tonnes of rye.
Ukraine has also exported 10.1 thsd tonnes of flour, including 8.8 thsd tonnes of wheat flour.
From the Middle Kingdom, as China’s record heatwave starts to subside, farmers are assessing the damage caused by a prolonged drought.
China’s water ministry said on August 11 that the drought had already affected nearly 33 million mu (22,000 square kilometers) of arable land and 350,000 livestock, but the final impact is likely to be far bigger.
Meantime, the government is urging farmers to replant or switch crops where they can.
The agriculture ministry, indeed, in an emergency notice on Tuesday called on farmers to harvest and store rice and take action to strengthen grain growth in coming weeks, encouraging to switch to late-autumn crops like sweet potatoes.
From South East Asia, Indian cooperative Krishak Bharati Cooperative has signed a long-term deal to import one million tonnes of phosphatic fertilisers from Saudi Arabia, Indian fertilisers minister Mansukh Mandaviya tweeted on Thursday.
KRIBHCO will invest in the new phosphate project of Saudi miner, Ma’aden, Mandaviya said.
India is signing long-term fertiliser import deals to hedge against international price volatilities.
Meantime, India’s cabinet on Thursday approved a policy to restrict wheat flour exports to calm prices in the local market, the government said in a statement.
In July India asked traders to secure permission before exporting wheat flour.
The ban on wheat exports boosted demand for Indian wheat flour and the country’s flour exports jumped 200% during April-July 2022 from a year ago and lifted prices in the local market, the government said.
Local wheat prices jumped to a record 24,500 rupees ($306.71) per tonne this week.
($1 = 79.8800 Indian rupees)
Tipu Munshi, Commerce Minister of Bangladesh, said twenty four global banks have agreed to provide Letter of Credit (LC) confirmation for importing food grains from Russia and Ukraine.
The minister made the remark during a Secretariat meeting regarding disbursal of payment in case of importing food grains on Thursday.
The commerce minister also said that there are no sanctions on fertiliser and food import from Russia and Ukraine.
From Australia, current crop markets continued to find a bid yesterday in wheat and barley at values a touch stronger.
New crop wheat and barley trade values continued firmer.
Grower bid prices were up $5-6/t.
Rainfall totals were mostly low in WA’s grain-growing regions, and were also low in northern NSW and Qld. SA, Vic and southern and central NSW had more substantial falls, receiving between 15-30mm.
More showers forecast for next week for Qld, NSW and Vic. SA and WA, at this stage, are expected to have a relatively dry week.
On the international trade scene, Japan’s MAFF purchased 118,881t wheat. The purchases included, from the US, 23,292t WW, 12,715t HRW, 21,800t DNS14, from Canada 34,434t CWRS13.5 from Canada and from Australia 26,640t ASW for Oct loading.
Egypt’s state grains buyer, the General Authority for Supply Commodities, is believed to have made no purchase of imported wheat in talks with trading houses on Wednesday.
The Taiwan Flour Millers’ Association purchased an estimated 34,025 tonnes of milling wheat to be sourced from the United States.
The grain is for shipment between October 12 and October 26.
Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley.
The deadline for submitting price offers is Aug. 31.
Jordan bought about 120,000 tonnes of barley in its previous tender on Wednesday, and the country’s continuing grain import requirement meant a new tender had been expected.
Shipment in the new tender is sought in a series of possible combinations in 60,000 tonne consignments.
Possible shipment periods are Dec. 16-31 and in 2023 for Jan. 16-31, Feb. 1-14 and Feb. 15-28.
Jordan has also issued a separate tender to buy 120,000 tonnes of milling wheat closing on Aug. 30.
That’s all, thank you.
We wish you a good day.
Author: Sandro F. Puglisi
