US farm markets were mixed but mostly higher yesterday.
Corn prices trended around 1% higher as operators have still showed plenty of optimism for bullish ethanol production trends.
Soybeans, meantime, failed to follow suit, falling around 0.45% lower after a disappointing set of weekly export sales data showed by USDA.
CBOT wheat prices, meantime, moved up around 1,68% reaching their highest levels since February 2013.
Kansas City gained around 0,92%.
Minneapolis jumped by 1,51% higher.
Both contract has been at or near multiyear highs yesterday.
On macro markets, oil prices edged up on this morning but yesterday were headed for their first weekly losses in at least eight weeks after U.S. oil stocks rose more than expected and Iran flagged it was resuming talks with Western powers which could lead to an end to sanctions.
Thus, Brent crude futures rose 27 cents, or 0.3%, to $84.59 a barrel by 06:00 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 12 cents, or 0.1%, to $82.93 a barrel.
Both benchmarks, which touched multi-year highs on Monday, yesterday were on track to fall about 1% for the week- the first weekly drop in 10 weeks for WTI and the first in eight weeks for Brent.
On the financial side, U.S. stocks yesterday rallied on generally positive earnings reports.
Also, there was relief the Democratic framework reconciliation deal announced Thursday morning did not contain any new corporate tax provisions.
Thus The S&P 500 rose 1% to 4,596.42, posting its third all-time high this week.
The Dow Jones Industrial Average rose 0.7% to 35,730.48, leaving it just shy of the all-time high it set on Tuesday.
The Nasdaq rose 1.4%, nudging the tech-heavy index to 15448.12, above its previous record high set Sept. 7.
Global stocks, meantime, were mixed.
Indeed, the Euro Stoxx 50 index closed up +0.31%, but China’s Shanghai Composite index closed down -1.23% and Japan’s Nikkei Stock Index closed down -0.96%.
However, Asian shares slipped on this morning, despite recent signs of optimism about the global economy.
Japan’s benchmark Nikkei 225 edged down 0.9% in morning trading to 28,559.89, as investors mostly took a wait-and-see attitude ahead of the nationwide parliamentary elections Sunday.
South Korea’s Kospi lost 0.7% to 2,988.09.
Australia’s S&P/ASX 200 declined 0.7% to 7,381.50.
Hong Kong’s Hang Seng dipped 0.8% to 25,343.14, while the Shanghai Composite shed 0.1% to 3,514.03.
In fact, heavy selling of some technology shares in after-hours trading cast a shadow.
As we have seen, Apple dropped 5.4% in after-hours trading (as the company’s fiscal fourth-quarter revenue fell short of Wall Street’s estimates).
Amazon.com fell 4% in after-hours trading (its third-quarter earnings missed analysts’ forecasts).
Coming back on grains market, rains will continue to fall across large portions of the eastern Corn Belt between today and Monday, delivering another 1” or more in some areas.
However, the Plains will remain almost completely dry during this time.
The agency’s 8-to-14-day outlook anticipates seasonally dry weather for much of the Midwest and Plains between November 3 and November 9, with below-normal temperatures for the eastern Corn Belt, Mid-South and Southeast.
Consequently, the delay in corn harvesting sites due to the rain are sustaining corn prices.
Corn consumption in the ethanol sector also remains very strong due to rapid growth in manufacturing margins in recent weeks.
In addition, the surge in nitrogen prices raises questions about sowing intentions in the USA for next spring.
Soybean prices, in contrast, weren’t able to find any positive traction, especially after a tepid round of export data showed by USDA.
Wheat prices, meantime, surged higher yesterday as traders are focused on solid global demand and tightening supplies.
A weaker U.S. Dollar lent additional support.
On the demand side, yesterday US weekly export sales data showed 890,448 MT of corn were booked during the week that ended 10/21.
They were down 30% week-over-week and 10% below the prior four-week average.
That was at the bottom of the expected range and included a 130k MT Mexican purchase previously announced.
The week’s shipments were 688,505 MT, which was also below last week and the same week last year.
Indeed, corn export shipments were down 34% from a week ago and 24% below the prior four-week average.
USDA said Mexico was the top destination.
FAS also reported 133k MT of milo were booked during the same week.
That was down from 262k MT last week but was up from 61k from the same week last year.
Sorghum shipments were seen at just 2,069 MT and were exclusively to Mexico.
As for soybean, weekly data showed US soybean sales were 1.18 MMT during the week that ended 10/21, slumping 59% lower week-over-week and tracked 22% below the prior four-week average.
That was below the expected 1.25 to 2 MMT range.
USDA reported China as the week’s top destination with 1.081 MMT booked, though 449k MT were switched from unknown and 66k from Hong Kong.
Exports were a marketing year high 2.406 MMT.
That set the 8-wk MY total shipment at 8.24 MMT.
Soybean export shipments jumped 81% above the prior four-week average.
Thus, shipments trail last season’s pace by 41% and the 5-yr average by 20%.
As for the derivate products, USDA’s weekly report showed 161,475 MT of soymeal was sold.
That was 33% lower on the week, and half of the same week last year.
For soybean oil export bookings, South Korea was the top buyer with 9,000 MT booked of the 14,623 total.
BO bookings were near the top of the expected range and the largest weekly sale since April.
As for wheat, export sales data from the week ending 10/21 showed 269,265 MT of wheat was booked, slumping 26% lower from a week ago and 31% below the prior four-week average.
That was at the low end of the range of estimates and the lightest sale since 115k MT during the week of August 19.
Mexico was the top buyer.
Shipments from the report were 185,559 MT during the week, bringing the MYTD total to 8.557MMT, fading 2% below the prior four-week average, but still improved 16% from a week ago.
It also should to note that is down 20% from the same week last year.
No new flashes to confirm the earlier rumours of Chinese business during this week.
In this context, corn basis bids moved 3 cents higher at an Iowa river terminal and 5 cents higher at an Ohio elevator while dipping 2 cents lower at an Illinois processor.
Other Midwestern locations held steady.
Soybean basis bids were steady to firm after rising between 1 and 10 cents higher across a handful of Midwestern locations.
From South America, weather maps remain optimistic for showers into this weekend across northern bean areas with drier weather following which will allow more plantings to kick off.
Temperatures have been spiking into Argentina but should cool down some with the rains there too.
Indeed, according to the Buenos Aires Stock Exchange, wheat production in Argentina is estimated this year at 19.8 million tonnes against 19.2 estimated last month, thanks to recent beneficial rains.
Soybean plantings are starting and would be achieved at 4.6% to date and those of corn at 27.6% according to the stock market.
On European market, from a meteorological point of view, rains are expected in Europe for this weekend, before a drop in temperatures projected for next weekend.
Meantime, Euronext fell sharply into the red yesterday despite the firmness of grains in Chicago.
Really we are witnessing a certain consolidation of prices after the sharp rise in recent months.
Indeed, the market needing new elements to resume a clear direction.
From North Africa, comments from Egypt have indicated that they will not be implementing the previously discussed bread price hikes anytime soon, despite the higher wheat prices.
However, from Nov. 1 the price of a 1 litre bottle of subsidised vegetable oil would increase to 25 Egyptian pounds ($1.60) from 21 pounds per bottle ($1 = 15.6600 Egyptian pounds).
Egypt, which imports 95% of its vegetable oil needs through state buyer GASC, offers buyers a blend of soybean and sunflower oil covered by its extensive subsidy programme.
From the Black Sea basin, weather maps in the Black Sea continuing to bring insufficient moisture along the Volga River valley.
There’s improvement for mid-month in parts of Ukraine but overall dryness concerns remain.
Conseqquently, the Russian Minister of Agriculture, cut grain production to 123 million tonnes, against 127.4 previously posted.
Wheat production is estimated to be between 75 and 75.5 million tonnes.
The ministry plans to plant 19.5 million hectares of winter cereals.
To date, sowing remains late, posted 17.6 million hectares against 18.3 last year to date, due to a water deficit.
Ditto in Ukraine where there is a certain water deficit, which could lead to a fall in autumn plantings compared to expectations.
As for prices, in the Black Sea basin rose sharply yesterday, both for corn and wheat.
From Australia, weather maps on the east coast swinging wetter again with a widespread inch forecast to fall across southern NSW into next week.
Drier bias to follow.
Meantime, Grain Producers Australia, is urging growers to be alert to recent changes that create additional red tape for the sustainability certification program that green-lights grain sales into the European Union market.
A recent email from Sustainable Grain Australia (SGA) – which facilitates growers’ compliance with the International Sustainability and Carbon Certification (ISCC) standard for trading grain with the EU – further confirms GPA’s concerns about the farm audit scheme’s creeping agenda.
GPA southern region director Andrew Weidemann said it was especially concerning given the significant impact on climate change of taxpayer subsidies that were handed out to EU growers directly from Governments, compared to Australian farmers.
“This also reinforces GPA’s views about the need to develop an Australian-owned and controlled certification scheme to protect grower interests and capture value from existing sustainability practices which have long underpinned production of world-leading, high-quality grains,” he said.
OECD analysis of agricultural policy released in June this year highlighted concerns about trade distorting subsidies causing adverse impacts on climate change goals.
This analysis says of $540 billion (USD) per year of government support paid to producers, over 60 per cent, or $338 billion (USD), is provided through the potentially most distorting instruments – namely market price support ($272 billion USD), and payments linked to output or the unconstrained use of inputs ($66 billion USD).
It also says Australia’s government support to agricultural producers is among the lowest in the OECD area, estimated at about 2pc of gross farm receipts for 2018-20, with total support to agriculture representing around 0.2pc of GDP.
Producer support in the European Union, as a share of gross farm receipts, has been about 19pc since 2010, compared to 18pc for all OECD members.
In another report, the UN’s analysis of these figures says under a continuation of current trends, this $540 billion (USD) per year support could reach $1.8 trillion (USD) by 2030.
On the international scene, Saudi Arabia is buying 655,000 t of wheat.
The grain is for arrival between January and April.
Results should be out early next week.
Jordan has bought 60,000 t of feed barley from Australia.
Pakistan cancelled an international tender to purchase 90.000 t of wheat but has just issued a new tender seeking the same volume.
Bids can be submitted through November 4.
South Korea, for its part, has bought more than 200 kt of corn.
We wish you a good day.
