US farm markets, were firmed again yesterday meanwhile traders finished squaring their positions ahead of the Christmas holidays.
In fact, corn prices were up 0.54%.
The soybeans had their eighth straight positive session, trending around 0.25% higher yesterday, a streak that saved them almost a dollar a bushel, or nearly 8%.
To note, oilseeds are at their highest since August 26 .
It owes it essentially to the deterioration of climatic conditions in the south of Brazil and the north of Argentina, respectively the first and third world producers of soybeans.
This bullish tone could have been thwarted by US export figures, with soybean volume at its lowest since the start of the 2021/22 campaign.
However, these data were offset by soybean oil exports, at the height of the season, and meal, up sharply from the previous week.
Consequentially, soymeal closed 0,82% higher and soy oil advanced 1,11%.
March Chicago SRW futures rose 0,09% to $8.1460.
March Kansas City HRW futures picked up 0,91% to $8.6140.
March MGEX spring wheat futures added 0,46% to close at $10.3240.
US markets are closed on this morning and will reopen on Monday.
In energy markets, oil prices have recovered this week as fears over the impact of the highly infectious Omicron variant on the global economy receded, with early data suggesting it causes a milder level of illness.
In fact, Brent crude futures snapped a three-day rally on Friday in light trade, with many investors away for the holidays, but the benchmark was still headed for a weekly gain, with the market focusing on the next step by OPEC+ and the impact of the Omicron variant.
Thus, Brent crude futures slid 39 cents, or 0.5%, to $76.46 a barrel by 0544 GMT, following a 2.1% gain in the previous session.
However the benchmark was still on track for a weekly gain of about 4%.
February WTI crude oil (CLG22) on Thursday closed +1.03 (1.42%), and February RBOB gasoline (RBG22) closed +3.83 (+1.77%).
On the freight market, the Baltic Exchange’s dry bulk sea freight index fell for the eleventh session on Thursday, as weaker capesize rates overshadowed gains in the panamax vessel segment.
The overall index, which factors in rates for capesize, panamax and supramax vessels, shed 10 points, or 0.5%, to 2,219, its lowest level since April 14.
The main index lost 6.7% this week.
The capesize index dropped 104 points, or 4.2%, to its lowest since end-March at 2,351.
It posted a 13.8% weekly decline.
Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, decreased by $869 to $19,494.
The panamax index added 131 points, or 5.5%, to its highest in a week at 2,515. It fell 2.9% this week.
Average daily earnings for panamaxes, which ferry 60,000-70,000 tonne coal or grain cargoes, increased by $1,178 to $22,638.
The supramax index fell 34 points to its lowest level in a month at 2,303.
On equities markets, U.S. stocks rallied again yesterday, in spite Thursday’s U.S. economic data was mixed.
Particularly, Nov personal income rose +0.4% m/m and personal spending rose +0.6% m/m, matching expectations.
Nov durable goods orders rose +2.5% m/m and +0.8% ex-transportation, mildly stronger than expectations of +1.8% and +0.6%, respectively.
However, core capital goods orders ex-defense and transportation (a proxy for capital spending) fell -0.1% m/m, weaker than expectations of +0.7%.
The inflation data was slightly stronger than expectations on balance, as the Nov PCE deflator rose +0.6% m/m and +5.7% y/y, matching expectations, while, the Nov core PCE deflator rose by +0.5% m/m and +4.7% y/y, slightly stronger than expectations of +0.4% m/m and +4.5% y/y.
The final-Dec University of Michigan U.S. consumer sentiment index was revised slightly higher by +0.2 to 70.6, which was stronger than expectations for an unrevised report.
The new home sales data was weaker than expected as Nov new home sales rose by +12.4% to 744,000 units, while expectations were for an increase to 770,000.
In this context, on Wall Street the S&P rose to 4,725.79, surpassing its Dec. 10 record.
The index ended up 2.3% for the week.
The Dow Jones Industrial Average gained 0.6% to 35,950.56 and the Nasdaq composite gained 0.8% to 15,653.37.
Certantly, U.S. stocks gained also thanks support from strength in overseas indexes.
Indeed, the Euro Stoxx 50 index yesterday closed +1.16%, adding to the +1.65% rally seen on Tuesday and the +1.01% rally seen on Wednesday.
China’s Shanghai Composite index Thursday closed +0.57%. Japan’s Nikkei index closed +0.83%.
On this morning mostly Asian stock markets continued to rise.
In fact, the Shanghai Composite Index lost 0.4% to 3,629.61 while the Nikkei 225 in Tokyo gained less than 0.1% to 28,815.17.
The Hang Seng in Hong Kong advanced 0.1% to 23,223.76.
The Kospi in Seoul added 0.6% to 3,017.93 and Sydney’s S&P-ASX 200 was 0.4% higher at 7,420.30.
New Zealand and Jakarta advanced while Bangkok retreated. Singapore was closed for Christmas.
On the weather side, the latest updates to the U.S. Drought Monitor, out yesterday, showed overly dry conditions are now present in 87.4% of the High Plains through December 21, up from 84.4% a week earlier.
That’s significant but still below year-ago results of 96.2%.
The Midwest is also experiencing some problems in areas such as Minnesota, Wisconsin and eastern Iowa.
Around 38.7% of the region is currently affected.
Meantime, until Sun Dec 26, is expects wet, wintry, windy, and a White Christmas for some in the West with hazardous travel conditions in mountainous terrain.
Anomalous, record-breaking warmth will continue to overtake much of the South.
Scattered rain showers and a wintry mix forecast along a frontal system moving across the Great Lakes and Northeast.
In this context, wheat prices continues to benefit from drought in the southern plains of the United States, where a significant portion of the HRW (Hard Red Winter) variety is grown.
On the demand side, USDA data showed corn bookings were 982,870 MT from the week that ended 9/16.
That put sales 29% below the prior four-week average, but totals still came in near the middle of trade guesses which ranged between 725,000 to 1.4 MMT expected.
USDA said 1.1 MMT of corn was shipped during the same week, which was 32% higher yr/yr.
Corn export shipments tilted 14% above the prior four-week average and now only trail last year’s pace by 1.1% with 12.74 MMT shipped MYTD through 12/16.
Mexico was the No. 1 destination.
Total commitments were still 6.5% behind last year’s mark at 39.5 MMT or 1.555 bbu.
Sorghum export sales climbed to a marketing-year high of 422,078 MT, with that grain largely bound for China and unknown destinations.
That was up from 332k MT last week and just 64k during the same week last year.
Milo commitments were 5.1 MMT as of 12/16, which is 1.2% above last year’s pace.
Soybean export sales stumbled 42% below the prior four-week average, with 811,502 MT of soybeans booked.
That was a MY low and at the bottom of the expected range.
Analysts were generally expecting a bigger haul.
Cumulative totals for the 2021/22 marketing year are struggling to match last year’s pace.
Indeed, as of 12/16, 40.9 MMT of soybeans (1.504 bbu) have been committed with 67% already shipped out.
That compares to 54 MMT (1.98 bbu) committed at the same point last season and 64% already shipped during last season.
Soybean export shipments fared much better but still fell 17% below the prior four-week average.
China accounted for more than half of that total.
Egypt, Mexico, Saudi Arabia and Turkey filled out the top five.
As for soymeal, the weekly FAS data showed soymeal bookings were 299,999 MT during the week that ended 12/16.
That was above the pre-report estimates and a MY high.
Meal exports came in at 397k MT for the same week, which was also a MY high and left the MYTD shipment at 2.74 MMT – a 15.6% lead over last year’s pace.
For soy oil, the weekly Export Sales report showed 109k MT were booked, which included a previously announced 53k MT sale to India.
The range of estimates were to see between 50k and 75k MT reported.
Accumulated soy oil commitments went from a 20% lag to 2020/21’s pace last week to a 5% lead yr/yr as of 12/16.
As for wheat, USDA’s weekly Export Sales data showed 425,397 MT of wheat was booked during the week that ended 12/16.
That was at the high end of the expected range but still down 35% from last week.
Compared to the same week last season, bookings were 8% higher, led by +100k MT sales to Japan and Philippines.
New crop sales chipped in another 32.658 t, for a total of 457.217 t.
The data showed spring wheat as the top variety sold with 1/3 of the total.
White wheat was also about 1/3 of the total.
HRW still accounts for 40% of the MY total commitments with spring wheat for 27%.
The season’s total wheat export commitments at 15.6 MMT (574.5 mbu) as of 12/16, remain moderately behind last year’s pace.
Meantime, wheat export shipments slumped 28% below the prior four-week average, with 190.507 t.
Mexico was the No. 1 destination.
South Korea, Nigeria, Italy and the Dominican Republic rounded out the top five.
In this context, corn basis bids trended a penny higher at an Ohio elevator while falling 1 to 4 lower at three other Midwestern locations and holding steady elsewhere across the central U.S..
Soybean basis bids trended 5 cents lower at three Midwestern processors and firmed 6 cents higher at an Ohio elevator while holding steady elsewhere across the central U.S..
The funds were net buyers yesterday for 4,000 lots of corn and 2,000 lots of soybeans.
They were neutral in wheat.
The delayed CFTC CoT report will be published on Monday.
From South America, dry conditions developing, continue to support corn and soybean prices.
Brazil’s state ag acency for Parana, Deral, meantime, reported their 2nd crop corn output at 15.1 MMT with 3.7 MMT from the first crop harvest.
CONAB had the states output at 3.53 MMT and 11.4 MMT in their official December data.
Also, Brazil’s Panara state ag agency, Deral, reported the soy crop 12% lower citing dryness.
They reduced the Parana state yield 7.7% under last year with a 1% boost to area for a net 18.4 MMT crop.
CONAB had Panara beans at 21.6 MMT in their official December data.
Heavier rains are expected in January, but some Brazilian farmers are already worried that the amount will disrupt soybean pod ripening and harvest.
The latest forecasts point to some showers in these regions in the next two weeks, “but nothing that will change the fact that everything is generally quite dry,” commented Jack Scoville, analyst at Price Futures Group.
According to the Buenos Aires Stock Exchange Argentina could harvest 21.5 million tonnes of wheat this year.
The harvests are carried out up to 78.3%.
The stock exchange estimates the next corn crop at 57 million tonnes and soybean crop at 44 million.
Meantime, farmers in Argentina have sold 36.3 mln tonnes of 2020/21 soybeans – agriculture ministry said.
Argentine farmers are now planting 2021/22 soy.
The grains exchange expects 44 million tonnes to be harvested.
On European market, the lack of activity puts an end to the rebound in wheat and corn, but have seen new records in oilseeds.
Indeed, Euronext ended its session on a slightly more mixed note Thursday evening with the return into the red for wheat and corn.
The lack of activity linked to the arrival of the end of year holidays and a rather stingy meeting in terms of information have indeed put an end to the rebound of the last days.
The oilseed complex benefited from a further upward acceleration in crude prices.
Fertilizer prices remain at record levels, even if there was a decline in gas prices yesterday on the markets.
From the Black Sea basin, Russia harvested 120.7 million tonnes of grain after drying and cleaning in 2021, including 75.9 million tonnes of wheat, the statistics service said on Thursday, citing preliminary data.
Meantime, temperatures are going up a little this morning in Moscow to -11 degrees.
It is nevertheless – 7 degrees in Krasnodar and – 10 degrees in Kiev.
On the other hand, rumors of the implementation of export restrictions in Ukraine are fading somewhat as the grain association does not consider these measures necessary.
In this context, no particularly changes in wheat prices.
In corn, however, activity seems more dynamic in Ukraine with prices changing little.
From Australia, Christmas may look a bit different this year for some growers that are traditionally all packed up and finished by this time of year.
However the season had big yields, and plenty of rain delays.
The canola harvest comes to the tail end through Victoria now with Western District growers finishing up before Christmas.
Meantime, the BOM eight-day forecast now gives growers a reasonably clear run at harvest for large part of central NSW through to WA.
In this context, Aussie local markets continued to trend up this week.
We saw wheat values firmer along the east coast and in South Australia, while ASW1 in Western Australia was firmer by $10-$12/t.
Canola has also started to rebound from its recent lows, as we saw bids up through Victoria yesterday on the cashboards.
On the international scene, Iran purchased around 300,000 t of animal feed corn that was likely sourced from Brazil in an international tender that closed earlier this week.
The grain is for shipment in January and February.
Iran purchased up to 240,000 metric tons of soymeal that was likely sourced from South America in an international tender that closed earlier this week.
The grain is for shipment in January and February.
Iran purchased 240,000 t of milling wheat from optional origins in a tender that closed on Wednesday.
The grain is for shipment in January and February.
Taiwan purchased 110,000 t of milling wheat from the United States in a tender that closed yesterday.
The grain is for shipment beginning in February.
Algeria purchased between 200 and 250 thousand tonnes of durum wheat, likely sourced from Canada and Mexico, in a tender that closed on Tuesday (but negotiations were completed Wednesday).
The grain is for shipment in February.
Finally, Iraq is buying 50,000 tonnes of wheat from the USA, Canada or Australia.
Author: Sandro F. Puglisi
