US farm markets, were mixed once again yesterday, as traders finished squaring positions ahead of today’s WASDE, partially shrugging off other news come in the process.
Thus, corn prices were marginally up despite a very large export sale to Mexico, gaining only 0,21%.
Soybeans showed an upside trend, closing the session with more than 0.86% higher, partially spurred both by soybean meal price that jumped by 2,14% and by a big export sale to China.
Bean oil, meantime, continued to weaker, losting 2,71%.
Front month wheat futures were lower during the midweek session, with double digit losses in winter wheat futures.
Indeed, CBOT wheat futures fell 1,73%.
KC HRW tumbled 1,87%.
MPLS spring wheat was down 0,12%.
On macro markets, oil prices rose on this morning, extending gains into a fourth session on positive comments from vaccine makers about the Omicron variant, even as some governments stepped up curbs to stop its rapid spread.
Thus, U.S. West Texas Intermediate (WTI) crude futures rose 52 cents, or 0.7%, to $72.88 a barrel at 04:55 GMT, adding to a 0.4% gain in the previous session.
Brent crude futures rose 40 cents, or 0.5%, to $76.22 a barrel, adding to a similar gain on Wednesday.
On equities markets, US stock indexes on Wednesday posted moderate gains, with the S&P 500 and Dow Jones Industrials climbing to 2-week highs.
An easing of pandemic concerns lifted the overall market Wednesday after Pfizer and BioNTech said that initial lab studies show the omicron Covid variant is neutralized by the third dose of their Covid vaccine.
Also, Wednesday’s U.S. economic data was also bullish for stocks.
U.S. Oct JOLTS job openings rose +431,000 to a 3-month high of 11.033 million, showing a stronger labor market than expectations of 10.469 million.
Thus, the S&P 500 Index closed up +0.31%, the Dow Jones Industrials Index closed up +0.10%, and the Nasdaq 100 Index closed up +0.42%.
Meantime, Asian stock markets were mixed on this morning.
Traders are looking ahead to Friday’s report of U.S. consumer inflation in November for indications of whether the Federal Reserve will feel more pressure to cool prices by rolling back stimulus that is boosting stock prices.
Fed officials meet next week for the last time in 2021.
They said earlier they were ready to act if needed after inflation hit a 30-year high of 6.2% in October.
In this context, the Nikkei 225 in Tokyo lost 0.3% to 28,779.66 while the Hang Seng in Hong Kong advanced 1% to 24,225.09.
The Kospi in Seoul gained 0.5% to 3,016.10 while Sydney’s S&P-ASX shed 0.2% to 7,394.60.
India’s Sensex opened down 0.2% at 58,515.65.
New Zealand and Bangkok declined while Singapore and Jakarta gained.
The Shanghai Composite Index rose 1.1% to 3,676.71 after producer price inflation eased to 12.9% over a year earlier from October’s 13.5% as prices of coal and metals fell.
That gives the Chinese central bank room to support economic growth with easier credit if necessary.
On the freight market, the Baltic Exchange’s dry bulk sea freight index advanced yesterday, steered by gains in the capesize and supramax vessel segments.
The overall index, which factors in rates for capesize, panamax and supramax vessels, gained 71 points, or 2.1%, to 3,423, touching its highest level since Nov. 1.
The dry bulk market is mainly iron ore and coal driven at this point, with higher momentum in the Atlantic on relative vessels’ supply tightness, shipbroker Intermodal said in a weekly note dated Tuesday.
The capesize index advanced 206 points, or 4.1%, to 5,189, its highest level in a month-and-a-half.
Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, increased by $1,706 to $43,030.
Chinese stainless steel futures dropped to their lowest in more than three months, dented by sluggish downstream demand and easing raw material prices.
The panamax index shed 32 points, or 1%, to 3,221, snapping a 12-session winning streak.
Average daily earnings for panamaxes, which carry 60,000-70,000 tonne coal or grain cargoes, decreased by $283 to $28,992.
The supramax index rose 32 points to 2,520, a peak since Nov. 4.
On the weather side, the eastern Corn Belt is set to get plenty of wet weather between today and Sunday, with drier conditions more likely farther west, according to the latest 72-hour cumulative precipitation map from NOAA.
Wetter-than-normal conditions are likely for much of the country between Dec. 15 and Dec. 21, meantime, per NOAA’s 8-to-14-day outlook.
Widespread warmer-than-normal conditions are also probable for the Midwest and Plains during this time.
Coming back on grain markets, going into the monthly supply and demand update, that will out later in the morning, analysts on average are looking for USDA to trim corn carryout domestically, leave global stocks UNCH, and see offsetting SoAm production changes.
The average trade guess for U.S. stocks is 1.475 bbu, or 18.2 mbu tighter than the Nov forecast.
Global corn carryout is estimated at 304.5 MMT going in.
Argentina is expected to get a 300k MT trim to 54.2 MMT, while the trade is expecting Brazil to get a 400k MT boost to 118.4.
As for soybean, the trade expects to see a boost to U.S. soybean stocks, a bump to the global supply, and offsetting South America updates. The average pre report estimate for U.S. soybean carryout is 354.7 mbu, or a 14.7 mbu bump form the Nov figure.
Global stocks are expected to be raised 600k MT to 104.4 MMT on average.
For Argentina the trade is looking for a 100k MT cut to 49.4 MMT, while the average trade guess for a 100k MT boost in Brazil would leave their output at 144.1 MMT if realized.
As for wheat, the trade is on average expecting a 6.2 mbu rise in U.S. wheat stocks.
If realized that would leave carryout at 589.2 mbu.
On the world stage, the average of estimates is to see 276 MMT, which would be up 200k MT form the November figure, though the full range is from 270 MMT to 279 MMT.
On the other hand, USDA flashed a huge Export Sale announcement to Mexico yesterday.
Private exporters sold 1.844 MMT of corn, of which 1,089,660 MT were for 21/22 delivery and the remaining 754,380 MT were for NMY’s crop.
USDA confirmed that was the 6th largest single sale on record.
Also, USDA reported a large soybean sale to China, as private exporters sold 130k MT for 21/22 delivery.
Meantime, estimates for the weekly Export Sales report, that will come out also it today, show between 600k MT and 1.4 MMT of corn was likely booked during the week that ended 12/2.
New crop corn bookings were estimated at less than 50,000 MT for the same week.
As for soybean, analysts surveyed estimate soybean bookings during the week that ended 12/2 were between 1 and 1.7 MMT.
New crop business is expected to be below 75k MT.
For soymeal, Export Sales data is expected to show between 100,000 and 250,000 MT were sold.
Bean oil bookings are estimated between 5,000 and 40,000 MT.
As for wheat, traders surveyed expect between 50,000 and 400,000 MT of wheat was sold during the week that ended 12/2.
Meantime, yesterday EIA reported ethanol producers averaged 1.09m barrels of production per day during the week that ended 12/3.
That was 55k bpd above the prior week and the largest daily average since the week that ended 10/29.
Ethanol stocks came in at 20.464 million barrels, which was 163k above last week.
Stocks were down 230k in the Midwest and 146k in the west coast, but East Coast and Gulf supplies made up the difference.
In this context, corn March contract put on 1.2c/bu, soybeans January contract rose 10.60c/bu, meal gained USD$7.5/st and oil was down 1.55usc/lb.
Chicago wheat fell 14c/bu, Kansas March contract lost 15.4c/bu, while Minni shedded 1.2c/bu.
Corn basis bids were steady to mixed again yesterday, rising as much as 6 cents higher at an Indiana ethanol plant while sinking as much as 5 cents lower at an Iowa river terminal.
Soybean basis bids were largely steady but did see some shifts, after falling as much as 10 cents lower at an Iowa river terminal and firming as much as 3 cents at an Indiana processor.
The funds were net buyers yesterday for 1,500 lots of corn and 7,500 lots of soybeans. They were net sellers for 7,500 lots of wheat.
From South America, weather is getting some attention.
Specifically northern Argentina and southern Brazil.
For the moment, conditions are “swings and roundabouts” with better conditions in other parts of the growing belt largely offsetting the dry areas.
Meantime, Argentina’s Rosario Grains Exchange is forecasting the country’s 2021/22 wheat production at 22,09 MMT, which is 8.3% above its prior estimates.
On European market, wheat on Euronext again widened its losses Wednesday evening in the wake of world prices.
In contrast, rapeseed is still progressing significantly.
FranceAgrimer yesterday published its new estimate of balance sheets for France, raising their projected ending stocks for French wheat by 10.7% from their November forecast to 3.51 MMT – citing weaker than expected exports.
That is compared to 3,17 MMT estimated last month and 2,33 last year.
Particularly, they now expect total export at 17,11 million tonnes against 17,34 last month, reducing its objective of wheat exports to third countries by an additional 200 kt, to 9.2 Mt. At the same time they expect a drop in consumption estimated at 4,65 million tonnes against 4,75 estimated last month.
As for barley, the end stock fell last month from 1,41 million tonnes to 1,42 this month.
Finally, for corn, the final stock fell last month from 1,89 million tonnes to 1,85 this month with national production now estimated at 14.2 million tonnes against 13.7 million last month and 12.5 million last year.
Meantime, according to the USDA attache, despite a year-on–year increase in EU grain production, which is now forecast to reach 292.5 MMT, the overall EU grain balance looks tight with only a small recovery in ending stocks forecast, driven by improved corn availability.
EU domestic consumption and industrial uses are forecast up, while eroding margins, combined with COVID-19 related gathering restrictions, animal disease outbreaks across the EU, and the slowing demand in meat export markets are anticipated to curb food and feed grain use in MY2021/22.
From the Black Sea basin, beneficial rains and snow in recent days over Ukraine, allowed water reserves to be partially replenished after a deficit episode in the fall.
In Russia there is a spectacular drop in temperatures, especially in Moscow, but with much milder temperatures in the south of the country where winter crops are mainly present.
Meantime, wheat and corn prices fell yesterday, in a context where the USDA report tonight could revise production upwards in some countries.
From Australia, southern grain values have softened in the past week as good-quality grain from the fast-moving Victorian harvest hit the market.
In the north, the market has steadied as harvest undergone a patchy restart after recent rain, and truckloads has delivered to cover near-term requirements as the market juggled flood-related road closures.
Falls in NSW have been the lightest and patchiest seen for weeks, and while some growers continue to be impacted by storms and showers, many have gotten back into harvest and/or carting grain in the past week.
On the other hand, projections suggest Australia will run out of the diesel additive AdBlue by February.
On international trade scene, South Korea’s leading feedmaker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 69,000 tonnes of animal feed corn and up to 65,000 tonnes of animal feed wheat.
The deadline for submission of price offers in the tender is today Dec. 9.
The corn was sought for April 2022 arrival in South Korea, the feed wheat for March 2022 arrival.
Jordan’s state grain buyer has purchased about 60,000 tonnes of animal feed barley to be sourced from optional origins in an international tender which closed yesterday.
The barley was believed to have been bought at an estimated $303.70 a tonne c&f for shipment in the first half of July 2022.
Seller was believed to be trading house Agro-Chirnogi.
The tender is over and no more will be bought.
Six other companies participated in the tender: CHS offered $323.38, Cargill $308.75, Viterra $318.00, Ameropa $335.00 and
ETG $323.38 all dollars a tonne c&f, traders said..
Cerealcom Dolj also took part but its offer price was not revealed.
A new barley tender is expected to be issued closing on Dec. 15 for 2022 shipment in June, July and August.
In its last barley tender on Dec. 1, Jordan purchased about 60,000 tonnes at $307 a tonne c&f.
Bangladesh’s state grains buyer received the lowest price offer assessed at $404.11 a tonne CIF liner out in an international tender to purchase and import 50,000 tonnes of wheat which closed yesterday.
The lowest offer was believed to have been submitted by Indian trading house Bagadiya Brothers.
There were three other offers in the tender.
Aston offered an estimated $432.00, Agrocorp $430.38 and GTCS $425.00 all per tonne CIF liner out.
Liner out costs include ship unloading costs for the wheat seller.
Shipment in the tender is sought 40 days after the date of contract signing.
The wheat can be sourced from any worldwide origin except Israel and is sought for shipment to two ports, Chattogram and Mongla.
Author: Sandro F. Puglisi
