US farm markets were mixed but mostly lower yesterday.
Corn prices moved around 0.75% lower.
Soybeans, in contrast, found some forward momentum jumping around 4% higher.
Wheat prices faded, meantime, ledding to double-digit losses for most contracts.
Indeed, winter wheat contracts fell between 1.5% and 1.75%, while spring wheat contracts were down around 0.5% by the close.
On macro markets, U.S. oil prices rose for a fifth day on this morning to their highest since 2014 amid global concerns about energy supply on signs of tightness in crude, natural gas and coal markets.
Brent crude prices also climbed for a fourth day on the supply anxiety, particularly after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, decided on Monday to say with their planned output increase rather than boosting it further.
Thus, U.S. West Texas Intermediate (WTI) oil CLc1 earlier rose to $79.18 a barrel, the highest since Nov. 10, 2014.
The market was up 0.15%, or 12 cents, at $79.05 a barrel, as of 0128 GMT.
Brent crude added 0.15%, or 12 cents $82.68 a barrel after rising to a three-year high in the previous session.
On the financial side, the US Senate will vote on Wednesday on a Democratic-backed measure to suspend the U.S. debt ceiling, a key lawmaker said yesterday, as partisan brinkmanship in Congress risks an economically crippling federal credit default.
Thus overnight the Dow Jones Industrial Average rose 0.92%, the S&P 500 gained 1.05% and the Nasdaq Composite climbed 1.25%, despite worries that the United States will default on its debt.
These fears, however, did help push the dollar back towards its 12-month highs and benchmark treasury yields to near their highest level since mid June.
In Asian trading, indeed, the dollar hovered close to its highs for the year against a basket of its peers, while the euro stayed near its 14-month low, struck last week.
Meantime, Asian shares dropped on this morning, reversing early gains, as analysts said sky-high oil prices meant stocks were quick to react to any hint of bad news such as a rate hike by New Zealand’s central bank.
Additionally, another Chinese real estate company, Fantasia Holdings, failed to make a US$206 million bond payment yesterday.
In this context, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6%, while Japan’s Nikkei lost 1.66%, having risen more than 1% in early trade.
There were falls in Hong Kong off 0.77%, Korea down 0.98% and Australia 0.8% lower, and U.S. stock futures, the S&P 500 e-minis shed 0.45%.
Coming back on grains market, we are a week before the next publication of the USDA monthly report.
Meantime, between today and Friday, parts of the eastern Corn Belt could gather another 0.75” in total rainfall, while areas farther west will stay completely dry, per the latest 72-hour cumulative precipitation map from NOAA.
The agency’s 8-to-14-day outlook predicts wetter-than-normal conditions for most of the central U.S. between October 12 and October 18, with warmer-than-normal weather likely for the Midwest and Plains.
In this context harvest progress brings a reassuring factor with the arrival of new availabilities and satisfactory yields to date.
On this wake analyst Dr Michael Cordonnier pegged US corn yield at 175 bu/acre and beans at 50.3 bu/acre, both predictions unchanged despite recent market suggestions of better yields.
Thus, corn prices in Chicago erased the increase of the last two sessions, while soybean, after having been under pressure by the USDA’s latest quarterly inventory, posted a slight rebound yesterday supported like other oilseeds by the firmness on oils, on oilseeds and energies.
On the other hand, the upward movement observed in wheat in the last few sessions, in contrast, led yesterday to some profit taking on the SRW contract.
In this context, corn basis bids were mixed at three Midwestern ethanol plants and firmed 3 cents higher at two other locations while holding steady elsewhere across the central U.S..
Soybean basis bids were steady to firm after moving 4 to 15 cents higher at four Midwestern locations.
From Canada, rains are also looking better across the prairies into later next week where recent weather has been abnormally warm and dry which had raised concerns about the total absence of soil moisture going into winter.
Meantime, latest CGC harvest sample data shows that average Canadian wheat protein levels are 14.8%, down 2 points from last week.
It is interesting to note that Canada has already bought 17.9 k mt of US SRW and 3.3k mt of US white wheat this marketing year.
This time last year Canada had only purchased 2.4k mt of white wheat.
Most of this wheat has not been imported yet, but its expect the majority of the SRW wheat will be brought to mills in S Ontario.
Imports of SRW will be higher this year as Canadian mills will need more low protein wheat than usual to blend with high protein Canadian wheat.
Meantime, in shipping week 7, Canadian spring wheat exports were 265.3k mt for a season total of 2.34 million mt, 73% (-876.8k mt) of last year’s volume.
About Canadian durum wheat, shipping week 8 durum exports were 36.5k mt for a season total of 575.7k mt, 39% (139.6k mt) more than last year.
From South America, Brazilian weather maps are still looking fairly good for later next week with 1-2″ widespread across bean areas.
Planting is just starting to get going on beans but safra corn about a third complete according to a private estimate.
Meantime, Brazil’s Anec expects the country’s soybean exports to reach 98.4 million bushels in October, while Brazilian corn exports could top 55.9 million bushels this month.
On European market, Euronext ended in dispersed order with a slight consolidation in wheat but a new jump in rapeseed to new records.
The oilseed is now carried away in the wake of a surge in crude prices which are currently moving to records of nearly seven years!
Rapeseed prices on Euronext thus marked a new high in the session yesterday, trading at € 666.75 / ton on the short-term contract.
However it should to note that prices display significant amplitudes of daily variation which exceed that observed on August 13 on this same contract.
Wheat prices, menatime, traded down slightly after the recent highs seen the day before.
However, the sharp rise in prices does not seem to contain demand for the moment.
European wheat export activity, indeed, has shown despite the price level, a good pace since the start of the season.
Wheat export total is a historic rate, with 8.1 Mt loaded from the 1 st July, against just 5.6 Mt last year at the same period.
Its 45% higher year-over-year so far.
EU barley exports are also trending higher from a year ago, with 2,46 Mt.
On the other hand, corn imports are estimated at 3.6 Mt, down 800 kt over the year.
European Union soybean imports so far in the 2021/22 marketing year have reached 3,19 Mt through October 3, which is trending 16% below last year’s pace so far.
EU soymeal, canola and palm oil imports are also down year-over-year.
On the other hand, corn harvest are not progressing much in France, a factor which is maintaining firm prices for the moment.
From the Black Sea basin, extended weather maps look better for the Black Sea winter wheat areas, but drier areas of Russia largely are missing out.
In this context, Ukraine’s winter wheat plantings for the 2021/22 season are 46% complete through October 4, per the country’s agriculture ministry.
To date, more than 3.1 million hectares are in place in soft wheat, thus marking a strong increase compared to the previous week.
There is still a little more than half of the areas to be put in place at present, but sowing work should actively progress due to more favorable weather conditions linked to less rain forecast for the coming week.
The winter barley areas are also increasing.
Thus the Ministry maintains the hypothesis of seeing more areas of production of winter cereals in progress compared to last year when the dry conditions had led the producers to revise the rotations.
There’s speculation Russian export quotas/bans, similar to those imposed last year, might commence sometime in January or February.
The early season export pace is slower than last year.
From Australia, new crop wheat bids were up A$5-6/t.
Harvest continues to gain pace in Queensland, with most of northern NSW still 1-2 weeks away.
Canola, on its part, remains firm and looks to be starting today firmer again after the board moved overseas.
Internationally, Egypt purchased 36,000 metric tons of soyoil from optional origins in an international tender that recently closed.
The soyoil is for delivery between late November and early December.
Japan issued a regular tender to purchase 130.633t of food-quality wheat from Australia, Canada and the United States that closes later this week.
Of the total, 39% is expected to be sourced from the U.S. The grain is for shipment in November and December.
Ethiopia issued an international tender to purchase 300.000t of milling wheat from optional origins that closes November 9.
Suffering from extended drought, the country has more than 13 million food-insecure citizens, per the World Food Programme.
Turkey issued an international tender to purchase 325.000t of animal feed corn that closes October 13 as the country continues to resupply its stocks following a drought this summer.
The grain is for shipment between November 15 and December 6.
Egypt’s GASC is finally back tendering again for wheat for late November.
Egypt is in fact launching for today a call for tenders for soft wheat for shipments expected over the period from 11 to 30 November.
The level of the Black Sea proposals will obviously be carefully observed on the part of West European exporters.
We wish you a good day.
