US farm markets, were mixed but mostly lower yesterday.
Indeed, corn prices eased slightly, closing with losses of around 0.3%.
Soybeans took on the heaviest losses, tumbling 2% lower after USDA-NASS reported larger-than-anticipated stocks in yesterday’s Quarterly Grain Stocks report.
On the brighter side, wheat prices made substantial inroads, as US stocks fell to a 14-year low officially.
On macro markets, oil prices dropped on this morning on the prospect that the OPEC+ supplier alliance might step up a planned increase in output to ease supply concerns, with soaring gas prices spurring power producers to switch from gas to oil.
Thus all eyes are now on the meeting in program for Monday.
Meantime Brent crude futures fell 7 cents, or 0.1%, to $78.24 a barrel at 04:15 GMT, but were still heading for a small rise on the week, marking a fourth straight week of gains.
U.S. West Texas Intermediate (WTI) crude futures slipped 6 cents to $74.97 a barrel, though the contract remained on track to post a sixth consecutive week of rises.
On the financial side, a grinding rally in the dollar is picking up speed, fueled by a hawkish tilt from the Federal Reserve, rising Treasury yields and concerns over the possibility of a drawn-out battle to raise the U.S. debt ceiling.
The greenback is up 4.7% year-to-date and stands near its highest level in a year against a basket of currencies.
Meantime, Wall Street ended sharply lower on Thursday and the S&P 500 posted its worst month since the onset of the global health crisis.
Indeed, the Dow Jones Industrial Average fell 546.8 points, or 1.59%, to 33,843.92, the S&P 500 lost 51.92 points, or 1.19%, to 4,307.54 and the Nasdaq Composite dropped 63.86 points, or 0.44%, to 14,448.58.
For the month, the S&P and the Nasdaq suffered their biggest percentage drops since March 2020, while the Dow saw its largest monthly percentage drop since October.
Market participants now look to consumer spending, inflation and factory activity data expected on this morning for signs of economic health and clues regarding the U.S. Federal Reserve’s shifting timeline for tapering its asset purchases and hiking key interest rates.
Coming back on grains market, the September 1 stocks report released overnight delivered the US final year-end stock figures for corn and beans and the Q1 ending stocks for wheat.
Soybean stocks were 256 million bushels (mbu) and were a massive “miss”, coming in nearly double pre-report estimates.
Corn stocks were 1.2 bbu and wheat 1.78 bbu.
Particularly, corn stocks were down 36 percent from September 2020.
Soybean stocks were down 51 percent.
All wheat stocks down 18 percent.
Durum wheat stocks in all positions on September 1, 2021 totaled 46.9 million bushels, down 34 percent from a year ago.
On-farm stocks, at 21.0 million bushels, are down 52 percent from September 1, 2020.
Off-farm stocks totaled 25.9 million bushels, down 6 percent from a year ago.
The June – August 2021 indicated disappearance of 17.7 million bushels is down 56 percent from the same period a year earlier.
The Small Grains 2021 summary report, had all wheat production 1.65 billion bushels in 2021, down 10 percent from the 2020 total of 1.83 billion bushels.
Area harvested for grain totaled 37.2 million acres, up 1 percent from the previous year.
The United States yield was estimated at 44.3 bushels per acre, down 5.4 bushels from the previous year.
“All wheat” production 1.65 billion bushels (bbu), of which HRW was 750 million bushels, well below the previous NASS estimate.
Particularly, the levels of production and changes from 2020 by type were: winter wheat, 1.28 billion bushels, up 9 percent; other spring wheat (non-durum, but including some non-HRS white springs), 331 million bushels, down 44 percent; and Durum wheat, 37.3 million bushels, down 46 percent.
Particularly, about durum wheat, production for 2021 was estimated at 37.3 million bushels, down 46 percent from the 2020 total of 69.1 million bushels.
Area harvested for grain totaled 1.53 million acres, down 8 percent from the previous year.
The United States yield was estimated at 24.3 bushels per acre, down 17.2 bushels from the 2020 yield.
Production in North Dakota, the largest Durum wheat-producing State, was down 44 percent from 2020.
The decrease in production is a result of dry conditions in the major Durum wheat growing States.
Harvest began in the two major Durum-wheat producing States of Montana and North Dakota in early August.
Harvest was 96 percent complete in both Montana and North Dakota by September 12.
There are normally some small adjustments to come, noting that not all the spring wheat and durum harvests are yet fully complete.
Meantime, the US weekly export sales numbers reported 1.1 million tonnes (Mt) beans sold, three quarters of which was to China, 0.4Mt corn and 0.3Mt wheat.
Corn export shipments fared better, with 676,200 MT.
Mexico was the No. 1 destination.
Soybean export shipments were for 528,700 MT.
China accounted for more than half of that total.
Wheat export shipments fell 27% week-over-week and 19% below the prior four-week average, to 368,900 MT.
In this context, corn basis bids moved 10 cents higher at an Iowa processor and slid 2 cents lower at an Ohio elevator while holding steady elsewhere across the central U.S..
Soybean basis bids held steady across most Midwestern locations but did tilt 5 cents higher at an Indiana processor.
On European market, Euronext has experienced a choppy session Thursday after the release of a highly anticipated USDA report on US inventories at 1 st of September.
Additionally, the fall of the euro against the dollar brings an adjustment factor for European prices.
Faced with this movement, European importers remain very vigilant, especially as this exacerbates an already complex situation faced with the price level of freight and products ‘import that were already high.
Meantime, the European Commission has revised its outlook for soft wheat production up from last month.
With harvests now finalized, volumes should thus reach 131 Mt, raising estimates by nearly 3% from August.
Export figures, however, remain unchanged.
But this news, had no effect on the prices which marked new highs on Euronext yesterday.
Thus the December 2021 contract traded during the day up to € 262.75 / t to be displayed at the end of the session at € 258 / t.
Meantime, the European Commission lowered its 2021/22 corn production estimates by 3.1% from August, falling to 68.8 Mt.
EU corn import estimates were unchanged, at 14,4 Mt.
The progress of the harvests will thus validate this hypothesis, knowing that in the short term the prices of maize also mark new highs at the start of the season.
Thus, on Euronext, yesterday’s session was marked by a new high due on the November 2021 contract.
The most noticed movement, however, concerned the rapeseed market. Thus, after having exceeded on the November 2021 deadline the level of 650 € / t during the day, a new all-time high for this contract on Euronext, prices fell sharply at the end of the day in the wake of soybean prices in the United States and canola in Canada.
From the Black Sea basin, Ukrainian corn harvest is continuing without currently weighing on prices because of the still visible tensions.
The delays observed in the works maintain the firmness of prices, in a context where it is necessary to quickly find goods in order to honor close loads.
Sunflower prices in Ukraine increase by 15% since the beginning of the season.
The rise in wheat prices is also visible in Ukraine where the FOB price marks a new all-time high.
Moldova’s wheat harvest has reached 1.551 million tonnes, the highest since records began 30 years ago.
The ministry said the country could export 500,000 tonnes of wheat in the current 2021/22 July-June season versus around 350,000 tonnes in 2020/21.
From the Middle Kingdom, the ongoing China energy/fertilizer situation has seen markets focus on comments indicating China’s government is actively securing energy supplies.
With the Chinese power crunch, China soybean crush continues to slow.
From Australia, Aussie’s APW and ASW outlooks diverge as rain raises protein fears.
The fertiliser rally after the Chinese export bans has seen prices kick once again and attracted more interest in pre-buying and filling sheds.
Cereal markets were also firmer by a couple of bucks and are firming in early discussion again today after the board moves.
Canola continuing to draw excitement locally with trades hitting $1000/t in WA yesterday.
Internationally, Tunisia’s ODC tenders for 125k mt wheat and 100k mt barley.
We wish you a good day.
