On Thursday, US farm markets bounced up finishing higher.
Corn and soybean prices each gained around 0.75% while some wheat contracts up more than 1.25%.
In fact, corn was up four and a half cents.
Beans gained eleven.
Chicago wheat contract, was up 6¢.
Kansas wheat was up +9 1/4¢.
Minneapolis gained +11 1/4¢.
On macro markets, oil prices climbed on Friday, heading for gains of more than 2% for the week, on increasing signs of robust demand and tighter supplies over the next few months as rocketing gas and coal prices stoke a switch to oil products.
Analysts pointed to a sharp drop in OECD oil stockpiles, to their lowest level since 2015.
On this wake, the International Energy Agency on Thursday said the energy crunch is expected to boost oil demand by 500,000 barrels per day (bpd).
That would result in a supply gap of around 700,000 bpd through the end of this year, until the OPEC+, add more supply, as planned in January.
Consequentially, global oil market is shaping up for a strong bull cycle, led by supply tightening and demand strengthening at the same time.
Thus, Brent crude futures rose 62 cents, or 0.7%, to $84.62 a barrel at 06:22 GMT, after picking up 82 cents in the previous session.
Front-month prices are set to rise for the sixth straight week, up 2.7% this week.
U.S. West Texas Intermediate (WTI) crude futures rose 56 cents, or 0.7%, to $81.87 a barrel, adding to an 87 cent jump on Thursday.
The contract is heading for a 3.2% gain on the week, up for the eighth consecutive week.
According to the Energy Information Administration, meantime, crude inventories (USOILC=ECI) rose by 6.1 million barrels in the week to Oct. 8 to 427 million barrels.
On the financial side, yesterday the S&P 500 jumped 1.7% to 4,438.26.
The Dow Jones Industrial Average rose 1.6% to 34,912.56 and the tech-heavy Nasdaq climbed 1.7% to 14,823.43.
The market’s gains came as investors welcomed another batch of encouraging quarterly report cards from several companies.
Investors were also reviewing the latest data on jobs and inflation as they try to gauge the economy’s health and path forward.
The Labor Department said the number of Americans applying for unemployment benefits last week fell to its lowest level since the pandemic began.
The Labor Department also said inflation at the wholesale level rose 8.6% in September compared to a year ago, the largest advance since the 12-month change was first calculated in 2010.
Meantime, Asian shares were also higher on this morning after technology companies powered the biggest gain on Wall Street since March.
All major regional indexes advanced, with Tokyo gaining 1.8%.
Taiwan shares jumped 2.4% on news that computer chip maker TSMC upgraded its profit outlook.
TSMC, the world’s biggest chip maker, climbed 4.7%.
Tokyo’s Nikkei 225 added 517.70 points to 29,068.63 and the Hang Seng climbed 1.4% to 25,305.65.
In Seoul, the Kospi advanced 0.9% to 3,017.34.
The Shanghai Composite index picked up 0.5% to 3,576.45 while the S&P/ASX 500 in Australia gained 0.7% to 7,362.00.
Coming back on grains market, US Corn Belt rains have continued to fall and are forecast to continue moving east. A 1-2″ fall on the ECB is expected.
Harvest reportedly stopped in almost all areas, although with drier weather on the extended runs they’re looking to get back into the fields this coming weekend/early next week.
For the second straight week, ethanol production improved, per the latest data from the U.S. Energy Information Administration.
Production improved to a three-month high of 1.032 million barrels per day for the week ending October 8, compared with 978,000 bpd in the week prior.
It was also the first time since late July that the daily production average topped a million barrels.
Private exporters announced to USDA the sale of 132,000t of soybeans for delivery to unknown destinations during the 2021/22 marketing year, which began September 1.
They are largely expected to be Chinese boats.
Regular weekly export sales will publish later in the afternoon.
Due to the Monday public holiday in the USA, indeed, the publication of weekly export sales figures was postponed by one day.
The trade expects to see between 700k and 1.6 MMT of corn booked. Projecting 22/23 bookings the trade expects fewer than 20k MT.
About soybeans, the trade is looking for between 600,000 and 1.6 MMT of soybeans during the week that ended 10/7.
As for meal and oil, traders expect between 100k and 320k MT and less than 30k MT were booked.
As for wheat, analysts surveyed are looking for wheat bookings between 250,000 and 500,000 MT during the week of 10/7.
Forward sales for 2022/23 are expected to be less than 20k MT.
On this morning will out also the NOPA report.
Analysts surveyed expect to see 155.07 mbu crushed in September.
If realized that would be down from 158.8 mbu last month and compares to 161.5 mbu in September 2020.
Soybean oil stocks are estimated at 1.663 billion lbs.
In this context, corn basis bids were steady to mixed after tipping a penny lower at an Illinois river terminal while firming 3 to 7 cents higher at three other Midwestern locations.
Soybean basis bids eased a penny lower at an Illinois river terminal while firming 4 cents at an Iowa river terminal and holding steady elsewhere across the central U.S..
From South America, USDA’s Ag Attache estimates Argentina soy production at 49.7 MMT.
That compares to 52 MMT in USDA’s official estimate – citing lighter planted area.
Argentine farmers, meantime, have sold 31.5 mln tonnes of 2020/21 soy – gov’t.
The 2020/21 soybean harvest in Argentina ended in June at 43.1 million tonnes, according to the Buenos Aires Grains Exchange.
Brazilian farmers have reported a shortage of oilseeds and grains storage capacity in the state of Mato Grosso – the country’s agriculture powerhouse – in a move that raises questions on potential market impacts as new production comes off the fields.
Limited storage options could be particularly significant for the domestic corn supply as Brazil prepares to harvest what is expected to be a massive soybean crop.
The shortage of silos and warehouses in Mato Grosso is structural as the state has capacity to store up to 38 million mt of grains and oilseeds from an estimated 2021/22 production of 77 million mt, according to data from the state’s agriculture institute IMEA.
On European market, grains have started a rebound and rapeseed confirmed its bullish recovery.
The wheat market thus managed to recover again above 270 € / t for the December 2021 deadline.
The prospect of a particularly tight carry-out stock in the US, boosted the prices of the straw cereal and the strength of international demand continues to be confirmed.
Meantime, FranceAgriMer forecasts 21/22 wheat carryout at 2.36 MMT, which was down 500k MT from their Sep estimate, while had carry-in at 2.34 MMT, or a 6-yr low.
Corn prices, on the other hand, have changed little, trying to stabilize.
The progress of the harvests in the Black Sea and in France is indeed accompanied by excellent returns of yields.
However, the global fertilizer rally is continuing to attract more attention and speculation about next season acreage shifts.
New highs are being reported in cash markets globally for both N and P.
On this wake, FranceAgriMer reported a potential reduction to the 2022/23 corn area citing expensive nitrogen costs.
FranceAgriMer, indeed, reported nitrogen based fertilizer cost’s have more than doubled, translating to ~ 300-350 euros/ hectare for wheat (~$850 – $1,002/acre).
Fertilizer prices has continued to climb since August.
Rapeseed for its part accelerated on the rise, still driven by an extremely limited supply on both sides of the Atlantic and a demand from the biodiesel industry reinforced by the holding of the barrel of oil above 80. $ / b.
Today on Euronext the options for the November 2021 expiry date for the corn and rapeseed contracts will expire.
From the Black Sea basin, weather maps are remaining fairly dry along the Volga through the end of the month and little improvement was evident in the latest runs.
Meantime, corn harvests are gradually advancing in Ukraine.
The works now exceed 22% of the potential of the areas to be harvested.
With a yield currently estimated at 5.75 t / ha, a volume of 6.9 Mt has now been harvested.
The arrival of new availabilities leads prices to begin a slight decline after several weeks of consecutive increases.
On the other hand, the progress of the sowing of winter crops, for the next season, is also being followed with great interest with the sowing of colza which is finalized, in winter wheat 63% of the surfaces are now in place and the sowing of barley of winter are approaching 40%.
From the Middle East, more talk about of Iranian wheat needs doing the rounds, with comments earlier this week suggesting that they will need to more than triple their wheat imports this year after poor crops there.
Indeed, reports on the wire calculate Iranian wheat needs at ~8 MMT, citing the strongest drought in 50-yrs.
From Australia, harvest has commenced in Western Australia’s northern farming region with small areas of canola, barley and wheat taken off, according to the latest report issued by the Grain Industry Association of Australia (GIWA).
Early indications are that grain yields and grain quality are not as bad as feared considering the lack of rain in the spring.
The top half of the grainbelt has had virtually no useful rain for the last nine weeks, finishing solely on subsoil moisture.
Whilst it is expected there will be a range in grain yields, influenced by soil type and other factors, total grain tonnage for the region will be at least that estimated.
Whilst the variance in potential final tonnage per hectare across the state is wide, the record planting of close to 9.2 million hectares will contribute to there being a lot of grain produced in WA this year and it could still end up being a record total tonnage despite the dry spring, frost in large areas of the grainbelt and severe winter waterlogging in the higher rainfall regions.
Meantime, Aussie local markets slid yesterday with the overseas weakness and firmer Australan dollar.
Wheat was down $5/t or so and barley a couple bucks, while canola tracked the boards up $5/t in SA/WA.
Internationally, Turkey has made provisional purchases of 325,000 tonnes of animal feed corn from optional origins in an international tender that recently closed.
Shipment in the tender was sought between Nov. 15 and Dec. 6 for unloading in the Turkish ports of Derince, Iskenderun, Mersin, Izmir, Bandirma, Tekirdag, Samsun and Karasu.
These purchases are still subject to final confirmation.
Turkey also issued an international tender to purchase 300.000 t of red milling wheat from optional origins, which closes October 21.
The grain is for shipment in December.
Japan purchased 120.000 t of food-quality wheat from the United States, Canada and Australia in a regular tender that closed yesterday.
Of the total, 49% was sourced from the U.S.
The grain is for arrival by the end of January.
Jordan issued an international tender to purchase 120.000t of wheat from optional origins that closes on October 20.
The grain is for shipment between January and March.
Jordan bought 60,000 MT of barley from Cargill at $329.75 for SH Jan shpt!
Agents saying that Viterra offered $338 and ETG offered $340.49.
We wish you a good day.
