US farm markets continued to be mixed but mostly higher yesterday.
Indeed, corn and soybeans both trended higher with gains around 0.3% – 0.4%.
Wheat prices offered a mixed bag, with spring wheat contracts firming as much as 0.5% while winter wheat contracts trended moderately lower.
On macro markets, oil prices continued to be volatile, gaining on signs some industries have begun switching fuel from high-priced gas to oil and on doubts the U.S. government would release oil from its strategic reserves for now.
Thus, Brent crude rose 1.2% to $82.94 a barrel on this morning, heading back towards a three-year high of $83.47 touched earlier in the week, while U.S. crude gained 1.39% to $79.38 a barrel approaching its seven-year high of $79.78 also touched this week.
On the financial side, traders are waiting for U.S. payroll data for September due out later in the day.
They expect employment figures that are near consensus will lead the Federal Reserve to indicate at its November meeting when it will begin tapering its massive stimulus program.
Meantime, the U.S. Dollar Currency Index , which measures the greenback against a basket of six peers, was little changed at 94.202 after trading in a tight range on Thursday, staying within sight of last week’s high of 94.504, a level not seen since late September 2020.
The dollar edged up 0.06% to 111.69 yen , drifting toward the upper end of the trading range of the past week and a half.
The euro consolidated around $1.1555, after dipping on Wednesday to a 14-month low of $1.1529.
Overnight, on Wall Street, the Dow Jones Industrial Average gained 0.98%, the S&P 500 rose 0.83% and the Nasdaq Composite moved up 1.05%.
Asian shares held onto gains on Friday, and were set to snap a four week streak of weekly losses as Chinese markets came back a bit more positive after a long holiday, encouraged by a survey showing services sector activity improving.
Thus Japan’s Nikkei index advanced 1.8%, and MSCI’s broadest index of Asia-Pacific shares outside Japan traded either side of flat, last up 0.03%, but set to gain 0.6% on the week, its best week in a month thanks to gains on Thursday.
Australian shares rose 0.84%, helped by mining stocks amid surging commodities prices, but Hong Kong fell 0.26%.
Coming back on grains market, rains will continue to land on some parts of the central U.S. later this week, while missing other areas entirely.
Between Thursday and Saturday, North Dakota, Minnesota and parts of the eastern Corn Belt are likely to see the biggest totals, according to the latest 72-hour cumulative precipitation map from NOAA.
The agency’s 8-to-14-day outlook predicts near-normal precipitation for much of the Midwest and Plains between October 14 and October 20, with a prevalence of warmer-than-normal conditions also likely.
However, regular US crop conditions and inspections will be delayed this coming week with the holiday of Columbus day on Monday, thus they will out on Tuesday.
US international sales accelerated.
Indeed, regular weekly export sales out yesterday were for the wheat at 0.3 million tonnes (Mt), corn 1.2Mt, beans 1.0Mt and sorghum/milo effectively zero (2.4 kt Mexican).
Meantime, yesterday we have seen also a flash export sales that had 261k of beans and 314k of corn to Mexico.
In this context, corn basis bids were mostly steady to weak Thursday after dropping 3 to 10 cents lower at a handful of Midwestern locations.
An Iowa river terminal bucked the overall trend after firming 6 cents higher.
Soybean basis bids were mostly steady to firm, rising 2 to 5 cents higher at three interior river terminals and as much as 15 cents at an Iowa processor.
An Ohio elevator bucked the overall trend after dropping 5 cents.
From South America, Brazil’s corn production was significantly hampered by drought during the 2020/21 season, but Conab expects it to rebound to 116.3 million tonnes against 87.0 million tonnes this year, which would be a 34% year-over-year improvement, if realized.
Factors include the potential for more favorable weather this year, plus Brazilian farmers are expected to increase plantings by 4.75%.
Brazil’s Conab expects also to see 2021/22 soybean production tilt another 2.5% to reach 140.75 million tonnes against 137.3 this year – a record also this, if realized.
Soybean plantings could also rise 2.5% this season, reaching 98.632 million acres.
On European market, wheat prices marked a new high yesterday on the December Euronext deadline, with reduced volumes, however, as a number of operators were present on the European Stock Exchange in Copenaghen.
Rapeseed prices were once again very volatile yesterday, closing again higher after a start to the day in the red.
Thus, rapeseed continued its course towards 700 € / t while maize chained a twelfth session in the green to approach 250 € / t on its November deadline!
Markets, indeed, continued to be firm, fueled by successive downward revisions in production in many countries, particularly coupled with the energy markets.
Soaring oil and gas prices are disrupting the data, still leading to fears about fertilizer supplies.
In this context, food prices are back to their decade highs, according to FAO.
Cereal prices at the world level increased by + 2% in September alone and those of oilseeds by + 1.7% in September and + 60% over one year, according to the FAO.
From the Black Sea basin, weather maps continue to bring some light rains across the rest of the month in latest models, but on the drier side of hopes.
Meantime, the delay in corn harvesting continues in Ukraine.
Russia’s 2021 grain harvest progress as of Oct 5, have already seen at home 108.4 million tonnes of grain before drying and cleaning .
Operators fear that Russia will take other measures to limit inflation such as the introduction of export quotas after the introduction of taxes.
Meantime, Russian wheat exports are down nearly 20% year-over-year during the first quarter of the 2021/22 marketing year, with around 9.198.780 t since the beginning of July.
Demand, however, remains strong in the Black sea area, despite competition with other European origins.
Thus, continued to rise both wheat and corn prices, particularly in close delivery.
From Australia, Aussie local markets were slightly firmer on wheat and barley yesterday, while canola was nominally higher, with almost the entire country pushing that A$1000/t mark.
Freight into harvest remains a concern with logistical delays noticed and more concerns as grain starts to move more heavily.
Demand on the international scene is not waning.
Tunisia’s durum tender saw them reportedly purchases wheat at a US$680/t for Nov/Dec shipment, with the ongoing squeeze in the global durum market well reflected.
The Philippines issued a tender to purchase 223.165 t of animal feed wheat that recently closed.
European traders speculated today that offers were already submitted and are awaiting results.
The grain is for shipment between December and March.
The Taiwan Flour Millers’ Association purchased 48,000 tonnes of milling wheat from the United States in a tender that closed yesterday.
The grain is for shipment between late November and early December.
Jordan issued a new international tender to purchase 120.000 of milling wheat from optional origins that expires October 13.
The country made no purchases in a similar tender that closed yesterday.
Jordan makes no purchase in tender for 120,000T feed barley.
Trading houses participating were believed to be Cargill, Viterra and Australian Grain Export.
We wish you a good day.
