The latest happenings in the Black Sea region led to mixed results in US farm markets, to start the week.
Corn market, indeed, posted double digit losses, down 1.87%.
Soybean prices also dipped, going home on the first trade day of the new week with 0.33% losses.
Soybean oil was still weaker, posting triple digit losses, down as much as 2.74%.
Soymeal went, meantime, counter to the beans and soy oil, ralling 1.51%.
Wheat prices finished with mixed results after another volatile session.
Particularly, Chicago wheat dipped 0.93%.
KC wheat held on for 0.99% gains.
In Spring wheat, May went home unchanged.
In energy market, oil prices extended Monday’s losses on this morning, sliding to a two-week low.
Ceasefire talks between Russia and Ukraine eased fears of further supply disruptions.
Surging COVID-19 cases in China fuelled concerns about slower demand.
Also, investors cut bullish bets on oil last week as prices surged to multi-year highs, the economic outlook deteriorated, and extreme volatility made derivatives positions more expensive to maintain.
Thus, Brent futures dropped $4.74, or 4.4%, to $102.16 a barrel by 04:45 GMT after tumbling by more than $6 to $100.05 earlier in the session.
U.S. West Texas Intermediate (WTI) crude fell below $100 level for the first time since March 1, dropping $4.58, or 4.2%, to $98.43 a barrel.
It fell to as low as $96.70 earlier in the session.
Both benchmarks declined by more than 5% the previous day, with Brent sliding 5.1% and WTI skidding 5.8%.
Meantime, the United States has warned China against providing military or financial help to Moscow.
On the other hand, India may take up a Russian offer to buy crude oil and other commodities at a discount, two Indian officials said, in a sign that Delhi wants to keep its key trading partner on board.
In the freight market, yesterday the Baltic Exchange’s dry bulk sea freight index rose for a seventh straight session, as strong capesize rates offset losses in the smaller vessel segments.
The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, indeed, rose 9 points to 2,727 points, its highest since Dec. 14.
Particularly, the capesize index gained 110 points to 2,786 points.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, increased $906 to $23,101.
Last week, average Capesize spot rates surged 64% w/w.
Analysts believe dry bulk spot rates will strengthen more into 2Q22 due to coal and grain trade disruptions, increasing iron ore volumes from Brazil, and minor bulk trade growth.
The panamax index was down 95 points at 3,092 points, meantime.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, decreased $859 to $27,826.
The supramax index also slipped 5 points to 2,934 points.
In equity markets, yesterday U.S. stock indexes gave up an early advance and settled mostly lower, with the Nasdaq 100 falling to a 9-3/4 month low.
Stocks initially had moved higher in hopes that the fourth round of talks between Russian and Ukrainian officials could bring a ceasefire in Ukraine.
However, a plunge in Chinese technology stocks weighed on U.S. stocks on economic growth concerns in China that could undercut global growth prospects, due to a resurge in Covid infections, which in Shenzhen sparked a government-imposed lockdown of its 17.5 million residents
In this context Apple closed down more than -2%, after one of its iPhone makers in Shenzhen halted operations.
Also, the more than -5% plunge in WTI crude oil weighed on energy stocks.
Meanwhile, stocks has been undercut by a jump in T-note yields ahead of the Tue/Wed FOMC meeting where the Fed is expected to begin a cycle of interest rate increases.
The yield on the 10-year Treasury, indeed, climbed to 2.16% from 2.00% late Friday after earlier touching its highest level since July 2019.
The two-year yield, which moves more on expectations for Fed policy changes, rose to 1.86% from 1.75%.
Thus, on Wall Street, the S&P 500 closed 0.7% lower, at 4,173.11.
The Dow Jones Industrial Average was essentially unchanged at 32,945.24.
The Nasdaq fell 2% to 12,581.22.
Small company stocks also fell.
The Russell 2000 index slid 1.9% to 1,941.72.
Meantime, stocks in Asia mostly fell, on this morning, as share prices in China have tumbled.
The sell-off gathered pace, despite the release of strong economic data earlier in the day, as the Chinese central bank’s decided not to ease interest rates to spur economic growth.
Thus, the Hang Seng index lost 5.99% to 18.361,67, while the Shanghai Composite gave up 4.95% to 3.063,96.
Tokyo’s Nikkei 225 rose 0.15% to 25.346,48, while the Kospi in Seoul gave up 0.91% to 2.621,53.
Australia’s S&P/ASX 200 slid 0.73% to 7.097,40 and shares also fell in Taiwan and Bangkok.
In currency markets, the dollar index on Monday fell -0.14%.
On this morning, the dollar rose to 118.34 Japanese yen, its highest level in about six years, from 118.18 yen late Monday.
The weaker yen is a boon to Japanese export manufacturers as it makes their products relatively cheaper and more competitive in overseas markets.
The euro rose to $1.0979 from $1.0941.
On the weather side, scattered rain and snow will be possible through parts of the Midwest and Plains between today and Friday, per the latest 72-hour cumulative precipitation map from NOAA.
No areas are expected to see massive amounts of moisture later this week, however.
NOAA’s 8-to-14-day outlook predicts seasonally wet weather for most areas east of the Mississippi River between March 21 and March 27, with warmer-than-normal conditions building in parts of the Northern Plains and Corn Belt during this time.
Meantime, winter wheat crop conditions, are evolving into these dry conditions, causing crop assessments to deteriorate again in Kansas and Texas.
The U.S. Department of Agriculture’s National Agricultural Statistics Service in its weekly crop report, indeed, rated 23% of the Kansas winter wheat crop in good to excellent condition, down from 24% a week earlier.
Kansas is the biggest U.S. winter wheat producer.
Also, the USDA reported that topsoil moisture was short or very short in 72% of the state, an improvement from 81% the previous week.
For Texas, the No. 2 winter wheat state by planted area, the USDA rated just 6% of the crop as good to excellent, down from 7% the previous week.
The USDA rated 75% of the Texas crop as poor to very poor, steady with the previous week.
For Oklahoma, the USDA rated 24% of the winter wheat crop in good to excellent condition, up from 15% a week earlier.
The USDA said 8% of Oklahoma’s wheat had reached the “jointing” stage of growth, behind the five-year average of 14%.
For Colorado, the USDA rated 18% of the winter wheat as good to excellent, a decline from 21% in the state’s previous report, released in late February.
In Arkansas, where farmers grow soft red winter wheat used to make cookies and snack foods, the USDA rated 71% of the state’s wheat as good to excellent.
The USDA rated 66% of the Louisiana winter wheat crop and 64% of Mississippi’s wheat as good to excellent.
Meantime, the Texas corn crop was 27% planted, matching the state’s five-year average.
Corn planting was 11% complete in Louisiana and 1% complete in Mississippi.
On the demand side, USDA’s weekly Export Inspections data showed 1.145 MMT of corn was shipped during the week that ended 3/10.
That was down from 1.58 MMT last week, and from 2.27 MMT during the same week last season.
China was the top destination with 29% of the total, followed by Mexico and Colombia with 27% and 10% respectively.
Accumulated shipments reached 25.9245 MMT as of 3/10, compared to 30.2 MMT at the same point last year.
For sorghum, USDA reported weekly exports were 258,842 MT.
That was up from 205k MT last week, but compared to 356k MT during the same week last year.
As for soybean, Export Inspections data showed 772,719 MT of soybeans were shipped during the week that ended 3/10.
That was up just 4k MT from the week prior, but was 41% above the same week last year.
Accumulated bean shipments still trail last year’s pace by 21% with 42.15 MMT shipped as of 3/10.
As for wheat, USDA’s weekly Export Inspections report showed 282,344 MT of wheat was shipped during the week ending 3/10.
That was down from +400k MT last week and down 432,708 MT yr/yr.
Mexico was the week’s top destination with 32% of the total.
USDA added 59,724 MT of wheat exports to past reports, which left the season’s total at 16.194 MMT as of 3/10.
Last season’s pace was for 19.383 MMT.
Meantime, private exporters reported to the USDA sold 159,000 metric tons of corn for delivery to Mexico during the 2021/2022 marketing year.
Ahead of the monthly NOPA crush data, analysts are expecting to see 165.02 mbu of beans were processed by NOPA members in February.
If realized, that would be down from Jan’s 182.2 mbu crush but up 6.4% yr/yr.
The full range of estimates is to see between 161.9 and 169.1 mbu.
Soy oil stocks are estimated at 2.026b lbs on average.
In this context, corn basis bids jumped 2 to 10 cents higher at three interior river terminals while eroding 9 cents lower at an Ohio elevator and holding steading elsewhere across the central U.S..
Soybean basis bids were steady to mixed after rising 1 to 15 cents at three interior river terminal and sliding 7 cents lower at an Ohio elevator.
From Canada, wheat exports for week 31 were at 215,7k, vs 281,6 a week ago.
Year to date they reached 7.082,8k vs 11.766,8k a year ago.
As for durum, exports for week 31 were a tiny 13.8k mt vs 34.3k prior week.
Year-to-date the total is 1.5 million mt, compared to 3.6million mt last year-to-date.
This is now just 42% of last year’s pace.
From South America, Brazilian farmers in the Center South had sown 94% of their second corn area through the end of last week, agribusiness consultancy AgRural said on Monday, as growers rush to plant their crop within the ideal climate window.
This marks a 20 percentage point increase for sown area from the same period last year, AgRural said.
The ideal planting window is in the first two months of the year for farmers in large growing states such as Mato Grosso.
The government forecasts Brazil’s corn production will grow by 29% this season, reaching 112.3 million tonnes, including first and second corn.
The increase will be driven by a rise in second corn output, which is expected to grow to 86.2 million from 60.7 million tonnes.
AgRural said Brazilian farmers had reaped 64% of their soybean area, up from 46% at the same time a year earlier.
In Mato Grosso, Brazil’s top grain state, soy harvesting is virtually finished while in Goias and Mato Grosso do Sul harvesting is nearly over as well, AgRural said.
Meantime, Brazil’s Safras & Mercado expects the country’s 2022 soybean exports to reach 78 MMT, which would be a year-over-year decrease of 9.4%, if realized.
Brazil’s 2022 soybean crush is expected to increase slightly from last year, reaching 47.5 MMT.
Meantime, Argentina has halted registration of export sales of soy oil and meal, the South American country’s government said on Sunday, a move that stops sales and exports of the 2021/22 crop from the world’s top exporter of processed soy products.
In a typical month, Argentina exports 1.5 million metric tons of soymeal and 300,000 MT of soyoil and accounts for 41% to 48% of total global exports of these commodities.
This is slightly bearish as traders anticipate the South American nation to raise export taxes on soy oil and meal from the current 31%.
Argentina’s curbs come on the heels of top palm oil producer Indonesia’ move to expand a policy requiring companies to sell 30% of their planned exports domestically, up from 20%, which pushed palm prices to historical highs last week.
In Europe, volatility remained in place on Monday with Euronext wheat starting the session in the red before surging forward in the middle of the afternoon.
Corn and rapeseed prices, meantime, were weighed down by a rapid drop in crude oil prices on Monday.
Traders in Poland reported strong export demand for Polish wheat and corn to replace supplies lost from Ukraine and Russia, but with dramatic price swings making trading difficult.
Polish 12.5% protein wheat for delivery to ports up to May was around 1,900 zloty (402 euro) a tonne on Monday, down 200 zloty on highs early last week.
However, after a long pause, large vessels are again loading Polish wheat for export in Poland.
One ship is loading 50,000 tonnes of wheat believed to be for Saudi Arabia, while other destinations were unclear.
Meantime, Spain expects, to approve emergency purchases of corn from Argentina and the United States for animal feed after supply gaps from Ukraine.
The country, as a major buyer of animal feed corn from Ukraine, was pushing the European Commission to waive import controls.
On Friday, the relevant committee of the European Commission authorised member states to lift some technical restrictions linked to the existing maximum pesticide residue limit for animal feed with full guarantee and safety of the agri-food trade.
From the Black Sea basin, the Government of the Russian Federation has imposed a temporary ban on the export of grain and sugar from Russia.
Decrees No 361 and No 362 of March 14, 2022 were signed by Premier Mikhail Mushustin.
The ban on grain export covers wheat and meslin, rye, barley, and corn and is in force till June 30.
The ban on sugar export is valid till August 31, 2022.
Meantime, Russia raised Sun oil floating index price for April to $1447.20 per T from $1371.70 per T in March.
Sun oil export tax in April will be $313 per T, up by $52.90 or up by 20.34% from $260.10 per T in March.
Meantime, Russia is guaranteeing the flow of business already contracted through its quota mechanism in place.
On the other hand, Ukraine’s Deputy Ag Minister announced sufficient grain and bread stocks for food, and that spring planting should begin shortly.
Their Ag Producer’s Union spoke of a planting switch from grains and sunseed to additional cereal production.
Ukraine’s Ag Ministry, separately, also placed a temporary ban on fertilizer.
Meantime, one of Ukraine’s largest ag companies, UkrLandFarming, said several company managers had been killed in Sumy in northern Ukraine, and in Kyiv.
UkrLandFarming has lost at least 120,000 hectares in the Kherson, Odesa and Mykolayiv regions after the start of conflict, or about one third of its land portfolio.
It has been forced to shut three egg farms including EU’s largest, the Chornobaivka factory near Kherson, where 3.1 million laying hens are dying, the company said.
IMC SA, another agricultural company, wants to keep its operations going, but is not allowing workers into many fields because of worries about their safety, IMC SA CEO Alex Lissitsa said Friday in an interview with Bloomberg.
Lissitsa, a board member of the Ukrainian Agribusiness Club, said summer crops such as corn could be affected more severely, with only about half the normal area planted because of the fighting and severed logistics.
A UN Food and Ag Org survey assumes a 30% loss to corn and sunflower area.
From the Middle Kingdom, China has started the release of more than 3 million tonnes of fertilisers from its commercial reserves in March for spring farming, its state planner said on Monday.
More fertilisers will be released from reserves to meet the market demand during key spring ploughing period, and the government will keep close monitor of the market situation to ensure stable supply and prices of fertilisers, said the National Development and Reform Committee in a statement.
Benchmark Zhengzhou urea futures hit a record high of 3,342 yuan ($525.46) a tonne in mid-October before plunging to around 2,200 yuan as Beijing launched investigation into the market and imposed additional inspection requirements for exports of fertiliser products.
China’s fertiliser output edged up 0.8% to 54.46 million tonnes in 2021, while exports plummeted 42% from a year ago.
Urea prices last week rose to 2,782 yuan a tonne following a surge of global energy prices including natural gas and coal, which are the feedstock of fertiliser production.
($1 = 6.3602 Chinese yuan renminbi)
From South East Asia, Malaysian palm oil futures plunged as much as 9.8% on Monday, as rival Dalian oils and crude futures dropped and investors booked profits after last week’s sharp gains.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange had dropped by 507 ringgit, or 7.56%, to 6,200 ringgit ($1,474.79) a tonne by the midday break, extending losses to a third session.
The contract had gained about 20% in the last three weeks.
From Australia, a public holiday in South Australia and Victoria yesterday meant a quiet start to the week.
In the east coast market, tight logistics as caused by weather and rain impacts have reduced access to grain sites and on-farm stocks.
On the weather side, forecasts include scattered showers over the next eight to 10 days for most growing regions as the need to start the build-up of soil moisture, or top it up, becomes evident.
Meantime, early wheat and grazing canola is already being planted in southern New South Wales and western Victoria.
On the international trade scene, Turkey’s state grain board, TMO, has issued an international tender to purchase and import about 270,000 tonnes of milling wheat.
The deadline for submission of price offers for the wheat tender is March 17.
The TMO has also issued a separate tender to buy 260,000 tonnes of wheat closing on March 18 but for supplies already in warehouses in Turkey.
Rapid wheat shipment is sought in the import tender between March 25 and April 22, 2022.
Red milling wheat is sought in a series of consignments to be unloaded in the Turkish ports of Derince, Iskenderun, Mersin, Izmir, Bandirma, Tekirdag, Samsun and Trabzon.
The tender for wheat in warehouses in Turkey seeks delivery between March 18 and April 24.
South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 210,000 tonnes of animal feed corn.
The deadline for submission of price offers in the tender is today Tuesday, March 15.
The corn is sought in three consignments of between 55,000 tonnes and 70,000 tonnes, with the seller free to decide the volume offered in this range, they said.
The Black Sea is not excluded as an origin.
The first consignment is sought for arrival in South Korea around June 23.
Shipment was sought between May 20-June 8 if sourced from the U.S. Pacific Northwest coast, between April 30-May 19 if sourced from the U.S. Gulf or Black Sea region/east Europe, April 25-May 14 from South America or May 5-May 24 from South Africa.
The second consignment is sought for arrival in South Korea around July 3.
Shipment was sought between May 30-June 18 if sourced from the U.S. Pacific Northwest coast, between May 10-May 29 if from the U.S. Gulf or Black Sea region/east Europe, May 5-May 24 from South America or May 15-June 3 if from South Africa.
The third consignment is sought for arrival in South Korea around July 14.
Shipment was sought between June 10-June 29 if sourced from the U.S. Pacific Northwest coast, between May 21-June 9 if from the U.S. Gulf or Black Sea region/east Europe, May 16-June 4 from South America or May 26-June 14 if from South Africa.
Algeria’s state grains agency OAIC has issued an international tender to buy a nominal 50,000 tonnes of animal feed barley to be sourced from optional origins, European traders said. The deadline for submission of price offers is March 16, with offers having to remain valid until March 17.
Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley, European traders said.
The deadline for submission of price offers is March 15.
Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat.
The deadline for submission of price offers is March 16.
Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it would seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by June 30 and to arrive in Japan by Aug. 25.
It said it would seek the grain via a simultaneous buy and sell (SBS) auction that will be held on March 16.
Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins.
The deadline for submission of price offers is March 16.
That’s all.
To all of you I wish you a good day.
Author: Sandro F. Puglisi
