US farm markets were sharply down yesterday.

Corn prices eroded 1.25% lower.

Soybean prices had moved down 1.8%, despite plenty of bullish export data from USDA. 

All wheat complex also faded, with December Chicago SRW futures that fellmore than 1%.

December Kansas City HRW futures dropped around 1,58%.

December MGEX spring wheat futures eased 0,45%.

Corn and wheat took hit as part of a broad selloff that also dinged the stock markets and energy prices yesterday.

A large corn sale to Mexico and a healthy set of export sales data from USDA kept corn prices from falling further. 

Soybean prices suffered a big setback mainly due to a round of technical selling finalized to profit-taking, occurred despite the latest export data from USDA, which showed soaring soybean sales this past week. 

Wheat prices followed down corn and soybean. 

The lackluste export sales exercited additional pressure. 

On macro markets, oil prices continued to fall on this morning with Brent on track for its first weekly dip in seven weeks as demand for oil products in power generation cooled off amid easing coal and gas prices, while a forecast for a mild U.S. winter also weighed on the market.

Thus Brent crude futures dropped 48 cents, or 0.6%, to $84.13 a barrel at 05:02 GMT, extending a $1.21 slump in the yesterday’s session.

Brent touched a three-year high of $86.10 on Thursday, but was on track to slip 0.8% in the week, the first weekly dip since Sept. 3.

U.S. West Texas Intermediate (WTI) crude futures fell 37 cents, or 0.5%, to $82.13 a barrel, following a 92-cent loss on Thursday.

On the financial side, cyclical stocks dragged amid worries that central bankers will need to tighten monetary policy into slowing growth in order to tackle persistent inflation.

Regional bond yields rose with those on U.S. Treasuries, where the market priced in higher inflation by narrowing the spread between short- and long-term yields, and pushing breakeven rates to the highest since 2012.

The dollar held gains from overnight – when it rose the most since the start of last week against major peers – as better jobs and housing data boosted the case for a faster tapering of Federal Reserve stimulus and earlier interest rate hikes.

So, investors remain skittish that continued inflation will limit profit margins for corporations and put the pinch on consumer wallets. 

Thus, the S&P 500 added 0.3%, while the Nasdaq Composite rallied 0.6%, although the Dow Jones Industrial Average edged slightly lower.

Meantime, tech stocks climbed in Asia on this morning, following U.S. peers higher, while Chinese property stocks rallied following a surprise interest payment by debt-ridden property developer China Evergrande Group.

Thus, Japan’s Nikkei rose 0.7% led by technology shares, while energy shares were the biggest drag. 

The broader Topix added 0.3%, with a 0.6% jump in the Topix growth index handily outpacing a 0.1% advance for the value index.

Chinese blue chips gained 0.3%, with the CSI300 Real Estate Index rising 2.5%. 

Hong Kong’s Hang Seng rose 0.4%, as an index tracking Hong Kong-listed mainland developers rallied 4.3%.

Australia’s benchmark index, meantime, slipped 0.2% as commodity-linked shares fell.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.1%.

Coming back on grains market, US weather maps are set to bring harvest to a brief stop. 

They still are forecasting 3″+ of rain across the eastern Corn Belt into next week.

Meantime, yesterday the US weekly export sales reported a solid result for soybeans, at 2.9 million tonnes (Mt) of which 1.9Mt was for destination China and 0.5Mt unknown (not yet declared) destinations. 

Weekly wheat export sales were 0.36Mt, corn 1.3Mt and milo 0.26Mt of which 0.23Mt was to China/Unknown.

Corn volumes improved 22% from the prior week and was 67% higher than the prior four-week average.

Corn export shipments moved 36% higher than the prior four-week average.

Soybean export sales soared noticeably above the prior four-week average.

Soybean export shipments were also robust, moving 29% higher week-over-week

Wheat export sales were a bit lackluster, sliding 36% lower week-over-week.

Wheat export shipments also failed to impress, slumping 65% lower week-over-week and 66% below the prior four-week average

As we said, yesterday a new export sales flash had 0.13Mt corn business booked to Mexico.

On the other hand, the Environmental Protection Agency reported that the U.S. generated 1.16 billion ethanol blending credits in September, down a bit from August’s tally of 1.21 billion. 

Another 385 million biodiesel credits were generated last month, versus 421 million in August.

In this context, corn basis bids fell as much as 32 cents at an Iowa river terminal and saw more modest losses at three other Midwestern locations. 

An Illinois processor bucked the overall trend after firming 5 cents.

Soybean basis bids spilled 6 to 16 cents lower at three Midwestern locations while holding steady elsewhere across the central U.S.

From South America, Argentina’s corn plantings for the 2021/22 season reached 23.2% as of late last week, versus a historical average of 29.4% by this time of year, per the Buenos Aires Grains Exchange. 

Drier-than-normal conditions are prevailing in key production regions for now.

Weather maps remain solid for the Brazilian soybean belt with a steady 1-2″ forecast across the short term runs.

On European market, wheat prices fell yesterday on Euronext amid profit-taking before the weekend, after the market posted new highs. 

Euronext corn, meantime, has stood out by managing to stay in the green.

In France, indeed, soaring fuel prices continue to strengthen demand for biofuels. 

Rapeseed gave way in the wake of canola and palm. 

However, volatility remains the order of the day on these markets, with an underlying trend that nevertheless remains upward.

Meantime, Strategie Grains has sharply increased its forecast for this year’s maize crop in the European Union due to good harvest yields and a revision to Polish estimates.

In a monthly grain report, the consultancy projected 2021 corn production in the 27-nation European Union at 67.5 million tonnes, up from 64.9 million tonnes expected previously and above the 2020 crop of 64.6 million tonnes.

Farmers are gathering maize in Europe, with a slow start to field work in some countries increasing attention on harvest prospects. 

The higher production outlook led Strategie Grains to trim its forecast for EU corn imports in the 2021/22 season to 13.9 million tonnes from 14.4 million last month and now slightly below the 2020/21 level.

Strategie Grains also trimmed its estimates for all-wheat exports during the 2021/22 marketing year, due rising prices putting pressure on both competitiveness in the world market as well as feed use.

From the Black Sea basin, little development in wheat, while corn prices gave ground under the effect of harvest pressure.

The return of dry weather in Ukraine allows an acceleration of the harvesting sites. 

However dryness starting to attract some renewed concerns as markets note that the weather maps have next to nothing on the forecast into November, and the latest runs are skewing even drier.  

Reports of poor germination in the driest areas starting to do the rounds.  

It is hard to kill a wheat crop at this point – but the perpetual concerns about poor establishment into winter are building with this pattern happening for the second year in a row.

Little activity in barley, although the latter seems competitive, particularly against wheat and corn.

From Australia, after opening unchanged, wheat and barley bids drifted lower as grower selling increased and harvest has started to get a good run in the north. 

All markets felt very heavy by the day end.

ASX east coast WM wheat drifted lower by A$4/t while the barley contract settled a buck stronger at $266/t.

Weather maps still holding very dry into early November, easing some concerns about harvest quality loss.

Thus, harvest pressure and a drop-off in demand from exporters and consumers have allowed prices to drop in the north, while the southern market has traded sideways as consumers ratchet back their buying ahead of harvest.

The firming Australian dollar has tempered spot bids for export coverage, and domestic consumers continue to hold out for downgraded or low-protein wheat.

Meantime, some mild and showery weather as well as storms in parts of NSW is slowing the ripening of an already late crop, and an increase in bids and volume can be expected from the domestic consumer if the pattern continues for another week or two.

Buyers are counting a lot on the coming Australian harvest to ease the market a bit, which will not, however, alleviate a global balance sheet which will remain tight.

Internationally, the International Grains Council (IGC) on this morning raised its forecast for the 2021/22 global corn crop, mainly due to an improved outlook for the United States production.

In fact, in its monthly update, the inter-governmental body increased its 2021/22 world corn crop outlook by 1 million tonnes to 1.210 billion tonnes.

Particularly, the IGC put the U.S. corn crop at 381.5 million tonnes, up from a previous projection of 380.3 million tonnes.

That is in line with the USDA’s current forecast.

The IGC, meantime, maintained unchanged its forecast for global soybean production in 2021/22 at 380 million tonnes.

Ditto for global wheat production that, in the 2021/22 season, was seen at 781 million tonnes, unchanged from last month’s forecast.

On the international trade side, Turkey is said to have bought around 300,000 t of milling wheat following its call for tenders.

Turkey notably concluded a purchase of 300 kt of wheat at $ 353.11 / t C&F.

Tunisia’s state grains agency has issued an international tender to purchase 100,000 tonnes of soft milling wheat and 100,000 tonnes of animal feed barley.

The origin was optional. The deadline for submission of price offers in the tender is Friday, Oct. 22.

The wheat and barley are both sought in two 25,000 tonne consignments.

The wheat is required for shipment between Nov. 15 and Dec. 15 depending on origin supplied.

The barley is sought for shipment between Nov. 25 and Dec. 20, also depending on origin supplied.

Japan purchased nearly 82.000 of food-quality wheat from the United States and Canada in a regular tender that closed earlier today. 

Of the total, 36% 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 milling wheat from optional origins that closes on October 27. 

The grain is for shipment in March and April.

We wish you a good day.

Comments are closed.