US farm markets were mixed again yesterday.
Indeed, corn prices end the midweek session in the red losing 0.97%.
Soybeans closed 0,68% lower.
Bargains buyers lifted the wheat complex but a rising dollar limiting gains.
Thus, spring wheat led the way, adding 1.46%.
HRW futures gained 0.54%.
CBT SRW prices closed 0.17% stronger.
On macro markets, oil prices dropped for a second session on this morning, under pressure from an unexpected rise in U.S. crude stocks that raised concerns over demand after prices rallied to multi-year highs.
U.S. crude inventories, indeed, rose by 2.3 million barrels last week, the U.S. Energy Information Administration (EIA) said, against expectations for a modest dip of 418,000 barrels.
Gasoline inventories also rose, while distillate inventories were down slightly.
Thus, U.S. crude slid 0.67%, or 52 cents, to $76.91 a barrel by 06:49 GMT, after the market climbed on Wednesday to $79.78, the highest since November 2014.
Brent crude lost 0.1%, or 8 cents, to $81.00 a barrel.
Gas prices also fell, a day after Russian leaders indicated that supply to Europe could increase, which contributed to a late rally on Wall Street after declines in European stock markets.
On the financial side, in fact, the Dow Jones Industrial Average rose 0.3%, the S&P 500 gained 0.41% and the Nasdaq Composite added 0.47%, also boosted by a proposal from the Senate’s top Republican, Mitch McConnell, to allow an extension of the federal debt ceiling into December.
The next U.S. event in focus for global investors is payrolls data due Friday, with investors anticipating that a reasonable figure will mean the U.S. Federal Reserve will begin tapering its massive stimulus programme at its November meeting.
Meantime, Asian shares rallied on Thursday, taking heart from a late recovery on Wall Street.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.25% in early trade, regaining ground lost in recent days to be little changed on the week.
Korea was up 1.3%, Australia up 0.64%, and Hong Kong up 2%.
Japan’s Nikkei rose 0.89%.
Chinese markets remained closed for a holiday.
Coming back on grains market, good weather has allowed rapid field work across the US Corn Belt, though rains remain on the longer run maps for mid-month.
Meantime, field corn yield reports continue to be generally positive.
Early yield ideas for next week’s USDA reports are right around the 176 bushels per acre level for corn, nearly unchanged, and around the 51 bushels per acre level for beans, up half a bushel.
EIA data reported ethanol producers averaged 978k barrels per day through the week that ended 10/1.
That was up 64k bpd from the previous week, and was the most production since the week of 8/6.
Ethanol stocks drew down 289,000 barrels through the week, to a 19 week low of 19.931 million barrels.
All eyes will now turn to the weekly US export sales figures released later in the afternoon by the USDA.
They will indeed have to accelerate in corn and soybeans to reach the USDA’s annual forecasts.
Traders are looking for USDA to report corn bookings from the week that ended 9/30 at between 350,000 and 800,000 MT.
Soybean bookings during the week that ended 9/30 are estimated between 600k MT and 1.2 MMT.
USDA’s Export Sales report is also expected to up to 350k MT of soymeal sold.
Traders anticipate USDA to show soybean oil bookings between 5k MT of cancelations and 40k MT of net new sales split between 20/21 and 21/22.
About wheat, the trade is looking for between 200-500k MT of bookings during the week that ended 9/30.
From South America, Brazil’s Trade Ministry reported soybean shipments to China reached 3.5 MMT during September.
In September 2020 Brazil shipped China 3.3 MMT.
Total bean shipments from Brazil during September were 4.8 MMT.
On European market, Euronext strongly accelerated in the green on Wednesday evening.
The session was particularly animated by the return to the purchases of Gasc for milling wheat with November loading.
Many other calls for tenders from Pakistan, Japan and Tunisia (for durum wheat) also confirmed the strength of international demand.
Wheat prices remains supported also by concerns over Russian winter plantings.
Additionally, the euro / dollar falling back towards 1.1550 supporting European grain prices.
Corn prices, for their part, benefited from the strength of wheat and remain largely supported by the lack of goods in the nearshore in Western Europe as well as in the Black Sea basin.
However, returns in Ukraine are very high.
Rapeseed, meanwhile, continues its bullish momentum driven both by the increase in energy and by the rise in palm prices which reached a new historic record yesterday in Kuala Lumpur.
Malaysian palm, indeed, is building historic highs after a month of September characterized by a surge in exports and a reduction in national production (-1.4% according to the Malaysian Palm Oil Association).
From Turkey, USDA’s Ag attache report stated, Turkey’s marketing year (MY) 2021/22 sunflower seed area and production is estimated at 760,000 hectares and 1.75 million metric tons (MMT) respectively.
Turkey continued imports of sunflower seeds to meet stable demand.
Accordingly, during the first eleven months (Sept-July) of MY 2020/21, oilseed sunflower seed imports were 899,000 MT, sunflower seed meal imports were about 788,000 MT, and sunflower seed oil imports were 732,000 MT.
Turkey’s sunflower seed oil imports and exports have increased significantly in recent years due to additional capacity for refining and re-exporting.
Turkey continues to be negatively affected by high domestic oil prices.
From the Black Sea basin, harvesting is progressing slowly in corn and sunflower.
Operators are impatiently awaiting the arrival of new availabilities and the confirmation of the good expected returns in order to initially meet the important short-term needs.
Ukraine’s Ag Ministry reported winter wheat planting at 46% complete through 10/4.
The Ag Ministry also reduced their 2021/22 output forecast from 32 to 31.55 MMT.
RusAgroTrans pegged Russia’s wheat output between 75 – 77 MMT with 119-121 MMT for all grain production.
Russia had reportedly harvested 108.4 MMT of grain as of 10/5.
Meantime, Russia’s Ag Minister, Dmitry Patrushev, saw 45-48 MMT of wheat exports for the 21/22 season.
That is down from the previous 51 MMT forecast, and was announced shortly after trade restriction discussions began.
The result of the GASC call for tenders finalized yesterday once again highlighted the attractiveness of Black Sea origins to the Egyptian market.
Romanian wheat was the most attractive but for a volume limited to 60,000 t.
Egypt suddenly indeed completed its purchase with 180,000 t of Russian wheat.
From the Middle Kingdom, USDA’s Ag attache report stated Chinese corn imports were likely 30 MMT through the 2020/21 season.
Meantime, they see 21/22 corn imports at 20 MMT, compared to 26 for each season in USDA’s Sept WASDE.
From Australia, weather maps still bringing that next 25mm plus for northern NSW into early next week though extended run maps have pulled back somewhat for mid-month to a drier bias.
Pre-harvest preparation is underway around the country for those who are not already in early harvest.
Meantime, nearby markets for wheat and barley have risen this week in response to limited selling from growers in the delivered-consumer market.
Accumulation for export continues to dictate values, and up-country and eastern seaboard consumers are lifting their bids prior to the arrival of previously booked new-crop barley and SFW wheat.
Global demand for Australian wheat has blown out the spread between it and barley in the domestic market, and increased barley’s attractiveness for consumers who are expecting to switch to low-protein wheat in coming weeks if the price is right and the volume is there.
Internationally, as we have seen, the Egyptian GASC bought yesterday 60,000 t of Romanian wheat at 350.5 $ / t CIF and 180,000 t of Russian wheat at 352 $ / t CIF.
Prices have increased by $ 7 / t compared to the last tender and it is also symbolically the first purchase of wheat from Egypt at more than $ 350 / t CIF for many years.
Most other offers were in the mid $350s to $360s levels.
Japan’s weekly MOA tender is for 130,963 MT from U.S., Canada, and Australia.
Jordan issued new tender to buy 120,000 tonnes wheat with closing date Oct 13.
Including Wednesday, Jordan has made no purchases in its past six wheat tenders after rejecting offers repeatedly in September.
We wish you a good day.
