US farm markerts, slumped lower yesterday.
A disappointing set of weekly export sales data released by USDA, triggered a round of technical sells.
Thus, corn dropped 1.25% lower.
Soybean prices fell more then 1%.
Soymeal was up 0.16% in the May contract, but the others gave back from 40 cents to $2.70/ton.
Soybean oil pulled back with 2.21% losse.
Wheat prices also faced losses between 0.6% and 1.81%.
Particularly, May Chicago SRW futures fell 1.81% to $10.8560.
May Kansas City HRW futures lost 1.48% to $10.95.
May MGEX spring wheat futures dropped 0.6% to $10.8260.
Wheat prices remain very close to multiyear highs, however.
In energy markets, oil prices inched lower on this morning as supply concerns eased as countries in the European Union remained split on imposing an oil embargo on Russia.
The United States and Britain have targeted Russian oil, while a similar action, poses a challenge for the EU, which relies on Russia for 40% of its gas.
A possible European Union ban on Russian oil would hurt consumers and the group has conveyed its concerns to Brussels.
Thus, Brent crude futures fell 46 cents, or 0.4%, to $118.57 a barrel at 05:29 GMT, after sliding 2.1% in the previous session.
U.S. West Texas Intermediate (WTI) crude futures fell 47 cents, or 0.4%, to $111.87 a barrel, having dropped 2.3% in the previous session.
However, both contracts were headed for their first weekly gains in three weeks, with Brent on track for a 10% jump and WTI on course for a 7% rise.
With global stockpiles at their lowest since 2014, analysts said the market remains vulnerable to any supply shock.
Supply concerns also heightened this week, after the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast stopped exports on Wednesday after being damaged by a major storm.
Kazazkstan said on Thursday it expects the CPC to resume shipping crude within a month, but added it may reroute some oil towards tankers on the Caspian Sea and pipelines going to Russia’s Samara and to China.
Helping ease prices, the United States and its allies were discussing a possible further coordinated release of oil from storage.
Separately, the United States was set to unveil a deal on Friday to supply Europe with more U.S. liquefied natural gas for this year and next, reported Reuters.
In the freight market, the Baltic Exchange’s dry bulk sea freight index fell on Thursday as a dip in capesize rates overshadowed gains in the panamax and supramax segments.
The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, indeed, slipped 8 points, or 0.3%, to 2,567 points.
Particularly, the capesize index dipped 131 points, or 6.2%, to 1,969.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down $1,079 at $16,333.
The panamax index gained 107 points, or 3.3%, to 3,379 points.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, increased by $963 to $30,413.
The supramax index rose 17 points to 3,033 points.
On week 12, accelerated growth of freight rates continues in the Azov and Black Sea region.
This week, indeed, the rate for a of 3k parcel of wheat from Azov to Marmara Sea ports reaches $62 per ton, an increase of $9 compared to last week’s rates, Sea Lines shipbrokers report.
This trend can be explained by unfavorable weather conditions in the Black and Azov Seas at the end of the previous week, which led to a shortage of spot tonnage.
In addition, there is a huge demand for grain crops and coal in the market, which contributes to the agiotage for vessels in the region.
According to Sea Lines, shipowners agree more often to work from the northern ports of the Sea of Azov, although for some owners cargoes from Temryuk and Kavkaz still remain a priority.
As for destinations, same as last week, charterers consider cargoes to a variety of destinations, such as Turkey, Israel, Italy or Egypt.
According to Sea Lines, on week 12, freight rates for wheat parcels from Azov made $60 to the Black Sea, $62 to Marmara, $75 to Mersin and $77 to Egypt.
Freight rates from Rostov AB (after bridge) are $1 above, from Rostov BB (before bridge) the same, from Yeisk and Taganrog $1 below, and from Temryuk $3 below those from the port of Azov.
In the Caspian, freight rates from some ports of origin went down.
On week 12, freight rates for shipping corn by 3,000 dwt bulkers to Iran make $21 from Aktau, $25 from Makhachkala, and $30 from Astrakhan.
In equity markets, U.S. stock indexes on Thursday rallied moderately.
Technology and communications stocks propelled the gains.
Big Tech companies have outsized values that tend to sway the broader market in either direction.
Facebook parent Meta rose 2.9%.
The Nasdaq 100 posted a 1-1/2 month high.
Chipmaker Nvidia vaulted 9.8% for the biggest gain in the S&P 500.
Health care stocks also rose.
Insurers UnitedHealth Group added 2% and Anthem gained 2.5%.
Signs of strength in the U.S. economy lifted stock prices.
U.S. weekly initial unemployment claims fell -28,000 to a 53-year low of 187,000, showing a stronger labor market than expectations of 210,000.
U.S. Feb capital goods new orders nondefense ex-aircraft & parts, a proxy for capital spending, unexpectedly fell -0.3% m/m, weaker than expectations of +0.5% m/m and the biggest decline in a year.
However, the U.S. Mar S&P Global manufacturing PMI unexpectedly rose +1.2 to a 6-month high of 58.5, stronger than expectations of a decline to 56.6.
A negative was a jump in inflation expectations that pushed T-note yields higher after the 10-year breakeven inflation rate rose to a record high of 3.027%.
In this context, on Wall Street, the S&P 500 rose to 4,520.16.
The Dow Jones Industrial Average gained 1% to 34,707.94 and the Nasdaq composite rose 1.9% to 14,191.84.
Meantime, Asian stock markets were mixed on this morning after Western governments promised new sanctions on Russia and President Vladimir Putin tried to prop up ruble by requiring Europe to use it to pay for gas exports.
That would increase demand for the Russian currency, pushing up an exchange rate that has slumped under sanctions.
However, European leaders on Thursday rejected that possibility, potentially setting up a clash over energy supplies.
Thus, the Shanghai Composite Index lost 0.6% to 3,232.34 while the Nikkei 225 in Tokyo gained 0.1% to 28,136.57.
The Hang Seng in Hong Kong fell 1.8% to 21,544.18.
The Kospi in Seoul lost less than 0.1% to 2,732.20 while Sydney’s S&P-ASX 200 gained 0.4% to 7,415.60.
India’s Sensex opened down 0.2% at 57,479.62. New Zealand, Singapore and Bangkok advanced while Jakarta declined.
In currecy markets, the dollar declined to 121.49 yen from Thursday’s 122.26 yen.
The euro gained to $1.1029 from $1.0997.
The dollar index on Thursday rose +0.17%.
On the weather side, no additional rain or snow is expected in the Plains between today and Monday, but much of the eastern Corn Belt may see at least some measurable moisture during that time, per the latest 72-hour cumulative precipitation map from NOAA.
Seasonally wet weather could return to the Central Plains between March 31 and April 6, according to NOAA’s new 8-to-14-day outlook.
Widespread cooler-than-normal temperatures are also likely.
On the supply side, ahead of next week’s Prospective Plantings report from USDA, results of the Pro Farmer/Doane planting intentions survey, surprisingly showed combined corn and soybean acres would decline 900,000 acres from last year to 179.7 million acres.
However, forecast total acres planted to the big four crops (corn, soy-beans, wheat and cotton) will rise 1.7 million acres from last year to 240.2 million acres.
Specifically:
• Corn: 91.9 million acres, down 1.5 million acres from 2021;
• Soybeans: 87.8 million acres, up 600,000 acres from 2021;
• Wheat: 48.5 million acres, up 1.8 million acres from 2021;
• Cotton: 12.0 million acres, up 800,000 acres from 2021;
• Sorghum: 7.0 million acres, down 300,000 acres from 2021.
The full range of corn estimates is between 90m flat and a 100k acres increase.
The average soybean pre-trade estimate is 88.9m acres compared to 87.2m planted in 2021.
All wheat acreage is expected to be 47.9m acres, with 34.4m from winter wheat and 11.8m from spring.
Trader estimates on quarterly grains stocks, show an average trade guess for corn stocks at 7.864 bbu as of March 1st.
The full range of estimates is between 7.316 bbu and 8.087 bbu.
As for soybean, the trade is looking to see 1.888 bbu of soybeans were counted on March 1.
That would be up from 1.562 bbu last season and carries a +/- range of 433 mbu from the high estimate to the lowest estimate.
As for wheat, the trade is looking for NASS to show 1.039 bbu of wheat stocks.
That comes between analysts’ estimating as low as 998 mbu and as high as 1.302 bbu.
Last year, NASS had 1.311 bbu as of March 1st.
On the demand side, FAS data showed 979,473 MT of old crop corn was sold for export during the week that ended 3/17.
That was half as much as last week and a quarter of the same week last season.
The trade was looking for between 800k and 1.8 MMT.
New crop corn sales were a 6-week low 6,096 MT.
That was exclusively to Mexico and below the 100k MT expected.
Corn exports were shown as 1.492 MMT during the week, leaving the total shipment at 30.3 MMT as of 3/17.
Particularly, corn export shipments improved 17% from a week ago but were 8% below the prior four-week average
For sorghum, USDA reported 6,439 MT of net old crop cancelations and no new crop business.
Sorghum exports were 255,178 MT during the week that ended 3/17.
As for soybean, report had old crop soybean sales at 412,213 MT from the week that ended 3/17.
That was below the range of pre-report estimates and was a MY low.
New crop business was a net 13k MT cancelation, compared to the between 300k and 800k MT expected sales.
Soybean export shipments eroded 38% below the prior four-week average.
For the products, USDA reported soybean oil bookings were a net cancelation of 1,986 MT with no 22/23 sales reported.
For meal, 302,865 MT were sold according to USDA’s weekly data.
That was split 260.7k MT for 21/22 delivery and 42.2k MT for 22/23.
As for wheat, USDA reported 155,654 MT of old crop wheat was sold.
That was within the range of estimates and was up 6% on the week.
New crop sales were tallied at 367,312 MT for the week that ended 3/17.
That was above pre-report estimates and left the forward book 25% above this season’s at 1.373 MMT.
As for export shipments, USDA reported 366,053 MT were shipped during the week.
Export shipments inched 5% below the prior four-week average.
That brought the accumulated total to 15.146 MMT as of 3/17.
Meantime, private exporters yesterday reported to the USDA sales of 318,200 metric tons of soybeans for delivery to unknown destinations during the 2021/2022 marketing year.
In this context, corn basis bids were mostly steady but slightly mixed at some Midwestern locations after easing 2 cents lower at an Illinois river terminal while firming 2 to 3 cents higher at two other locations.
Soybean basis bids were steady to firm after rising 8 to 12 cents at two interior river terminals and improving 9 cents at an Ohio elevator.
On Wednesday, commodity funds were net buyers of corn (+3,500), soybeans (+10,000), soymeal (+6,000) and soyoil (+4,500) contracts but were net sellers of CBOT wheat (-5,000).
From Canada, the Canadian province of Saskatchewan on Wednesday forecast a deficit of a C$463 million ($369 million) in the 2022-23 fiscal year, less than a fifth of last year’s C$2.6 billion deficit, as stronger oil and potash prices bring in more revenue.
The province, home to the world’s biggest potash industry, accounting for about one-third of annual global production, said it expects revenue to rise by 18.5% to C$17.2 billion in the fiscal year starting in April.
Spending is projected to increase by 3.1% to C$17.6 billion.
Potash revenue is budgeted at C$1.5 billion in 2022-23, up from the 2021-22 forecast of C$419.8 million, reflecting a higher average price forecast.
The potash price is forecast to increase by 48% in 2022, contributing to Saskatchewan’s strong economic outlook, the provincial government said in the budget.
($1 = 1.2558 Canadian dollars).
Meantime, ICE canola futures retreated on Wednesday after rising to a new contract high amid support from edible oils markets.
The nearby May canola contract reached a life-of-contract high of $1,177.80 per tonne.
The contract ultimately ended down $26.30 at $1,136.70 per tonne.
That is up 15.5% so far this year, however.
From South America, favorable weather is boosting Brazil’s second corn prospects, consultancy Safras & Mercado said on Thursday, a boon to farmers and traders who can profit from soaring in global prices.
With more supplies on the way, Brazil could raise corn exports to 34.5 million tonnes in 2021/2022, a nearly 66% increase from the previous season, Safras predicts.
Safras has pegged Brazil’s Center-South second corn output at 83.3 million tonnes, a 44% rise from the previous cycle, when second corn suffered from drought and frost.
Farmers in Mato Grosso, Goias, Sao Paulo and Minas Gerais may have planted more second corn than initially projected, encouraged by higher prices.
Farmers in Matopiba states, considered Brazil’s new agricultural frontier, could also reap a record harvest.
Safras has pegged Brazil’s total corn production this season at 115.7 million tonnes, an unprecedented volume.
In Europe, the current context of high commodity price volatility was once again verified yesterday on farm markets
Grain prices marked a significant amplitude of variation during the day.
While rapeseed posted a sharply rebound following the violent downturn of the previous day as the oilseed market is largely disturbed by the question of the supply of sunflower oil.
Per latest weekly estimates today from farm office FranceAgriMer, the crop conditions of French soft wheat were 92% Good/Excellent unchanged from last week.
Winter barley was rated at 88% in Good/Excellent condictions slightly below 89% last week’s.
Durum wheat is seen at 88% in Good/Excellent condictions unchunged from last week.
Spring barley sowing is now completed.
However, on the weather side, still an anticyclonic weather.
A few high sails or scattered clouds will circulate in the southwest or around the Mediterranean.
But the sun will dominate the debates everywhere from morning to evening.
On the mercury side, it will be very cold at dawn ( possible frosts ), then we will approach the values of early May during the afternoon with nearly 17 to 20 degrees in general.
Light breeze and autan wind remaining quite strong in the south.
On Saturday, the British anticyclone will remain valiant and will still maintain dry and sunny weather over the Central Europe.
Only a few high clouds will be able to overflow from Spain along the Pyrenees only or even as far as the Gulf of Lion and Corsica.
The temperatures will be seasonal, even a little cool at dawn with still a few frosts in the depths (thermal inversions in the middle mountains) then a spring mildness will dominate during the day, with values worthy of early May, from 16 to 20 °C in the north and 18 to 23°C locally in the southwest.
From North Africa, Egypt is in talks with Argentina, India, France and the United States for future wheat imports but is in no rush to buy at the moment, the supply minister said on Thursday.
Egypt could start tendering again in the local mid-harvest period, which typically starts in April and ends in July or August.
The government aims to procure 6 million tonnes of wheat from the local harvest.
The government set a fixed price for unsubsidised bread this week after bread prices jumped 25% to 1.25 Egyptian pounds($0.07) per loaf in some bakeries.
Flour prices had also reached highs of 11,000 Egyptian pounds ($602.70) per tonne in the weeks since the invasion.
The supply ministry said it would begin offering flour to the private sector at 8,600 Egyptian pounds ($471.23) per tonne, and would penalise for violators of the fixed prices from Saturday, the minister added.
($1 = 18.2500 Egyptian pounds)
From the Black Sea basin, Ukraine’s 2022 sunflower seed harvest could decrease by 42% to 9.6 million tonnes due to a sharp decrease in the sowing areas, APK-Inform agriculture consultancy said late Wednesday.
APK-Inform said the 2022 sowing area under sunflowers may fall to a minimum level for 13 years, amounting to about 4.2 million to 4.4 million hectares, or 35% down versus 2021 levels.
The harvest of rapeseed could fall by 19% to 2.52 million tonnes, while soybean production is likely to fall by 23% to 2.74 million tonnes.
Ukraine has already started spring sowing.
Meantime, the world’s largest agricultural companies are continuing to sell seeds and handle crops in Russia, despite pressure to sever ties.
Companies including Cargill Inc., Bayer AG and Archer Daniels Midland Co. say humanitarian concerns over food availability for Russian citizens and other countries justify the companies’ continued operation in Russia, while Western oil companies, fast-food chains and other companies have pulled out or paused operations there.
Russian agriculture is one of the most import-independent industries.
Nevertheless, some varieties of seeds are still imported.
According to Arkady Zlochevsky, President of the Russian Grain Union, “a large number of seeds are imported to Russia. For many seeds, Russian farmers are very import-dependent. But there is no item of seeds in the list of the stuff under the sanctions. That means that seed supplies are possible”.
However, in this agricultural season, the issue of foreign seeds is irrelevant, they say in the regions.
Farmers have a stock of necessary seeds, where much of seeds are the domestic origin.
In the Omsk region, more than 98% of the area is sown with domestic varieties.
In Orenburg, agricultural producers planned to sow imported seeds of hybrids of corn and sunflower but today they are finding a replacement for them among seeds of the domestic origin.
Similar decisions are made by agrarians of the Stavropol Territory.
“We understand that the productivity of the Russian seed material can be lower, but it will be sufficient to ensure the food security of the region”, said Vladimir Sitnikov, Deputy Prime Minister of the Stavropol Government.
From the Middle Kingdom, China’s northern wheat growing region still has room for improvement, Chinese Premier Li Keqiang told a meeting on Thursday, and it is critical to support weak seedlings to ensure a bumper harvest.
The country is facing new challenges in ensuring farm output, with rising global prices and volatility, but domestic supplies are sufficient, he also said, according to a state media report.
From the South East Asia, Indonesia’s Economic Affairs Coordinating Minister said palm oil blending should reach 23% by the end of 2025 as the nation works towards B30 biodiesel.
Current blending mandates call for 11%.
The Vice Chairman of Indonesia Biofuel Producer Association calculates an approximate 17% pull from total palm oil output to achieve the B30 blends in 2022.
From Australia, local wheat markets again were largely unchanged yesterday and liquidity was limited.
Grower selling eased and buyers appeared comfortable with nearby coverage.
Barley bids in eastern Australia again ticked a dollar or two higher while the delivered Darling Downs market continued its feedgrains-driven strength.
Canola current crop markets were a touch softer in depot while delivered port was unchanged.
On the weather side, scattered showers arrived in the past 24 hours in northern NSW and another front is pushing through the region this morning.
More rain looms over Port Kembla this morning and will continue to play havoc on current export loading program.
On the international trade scene, Jordan’s state grain buyer made no purchase in an international tender for 120,000 tonnes of wheat which closed on Thursday.
A new tender was expected to be issued in the coming days, closing on March 31, with same tender conditions.
Trading houses participating on Thursday were believed to be CHS and Romania-Cerealcom.
That’s all.
To all of you I wish you a good day.
Author: Sandro F. Puglisi
