A stronger dollar continues to wreak havoc on grain prices.
Despite USDA released another sales flash, 110,000t old crop corn to Japan, old crop corn prices fell by a percent due in large part to weakening wheat prices and losses in the energy sector incurred by shipping delays in the Suez Canal.
Wheat, indeed, continued to sell down across the boards with little new to feed the bulls and a gradual improvement in ideas about the upcoming winter wheat crops globally.
Updated IGC estimates, indeed, put world wheat at 790Mt for the coming season, up from 775Mt last year with carryout growing by 12Mt.
In add the IGC showed the estimate of corn production for the next season at 1,193 billion tonnes against 1,139 last year.
The only element of support for the moment is the next corn harvest in Brazil, which could be affected by late sowing.
In add, traders are very cautious about the USDA report on the status of quarterly stocks and planting intentions in program for next week.
Crude oil, on an other hand, was back down two bucks fifty with the last few days of volatile trading seeing both technical pressure and a swing back in focus from the Suez problems towards the EU lockdowns and overall economic concerns there.
World sentiment on macro markets seems to have swung back to the negative: this week’s extended lockdowns in Europe and reports of new coronavirus variants around the world adding to fears that the improvements in vaccinations in the US may be offset by further slowdowns elsewhere.
The blockage of the Suez Canal by container vessel Ever Given has become something of a pop sensation, but there’s no clear answer about how long it will take to shift.
The direct impacts to agriculture are still very minor, but the longer the delays the more increases in freight costs between South Est Asia and Europe will add up.
The regular US weekly export sales report was massive, as expected, given Chinese flashes last week.
Has displayed this week 414,100 tonnes in wheat, within the range of expectations.
Showed only 166,900 t in soybeans, but a record level of 4,626,500 t in corn, of which 3.8 million go to China.
There was also one new boat of old crop milo/sorghum was reported sold to China.
So, corn exports stole the show even if the volume was 7% lower than last week’s record-breaking total, as this week’s haul was the second largest weekly corn export volume on record.
But we also must note that corn export sales for the week ending March 18, even if rised 4.5 times higher than the prior week’s new sale volume China accounted for 86% of all total new 2020/21 corn export sales for the week.
Slowing U.S. export paces to China played a significant role for losses in soybean.
Smaller than expected U.S. hog numbers also decreased domestic demand outlooks for soy products.
Soyoil prices suffered as prices came off peak.
Soymeal, on the other hand rose despite lightened domestic end-user demand and weakening export demand at the U.S. Gulf.
On the other hand, the Buenos Aires Grains Exchange expects the 2020/21 Argentine soybean harvest to reach 1.617 billion bushels despite dry weather conditions this growing season.
And, even if the Argentine agricultural ministry expects that soybean sales are likely slower this year than the same time a year prior, however, also reported that its farmers have sold 28% of its soybean crop as of March 17.
Also european market gave up clearly ground all products yesterday.
First of all because climatic conditions are improving as in the Black Sea basin as in the USA.
Secondary because there are many profit taking on the part of funds which were in a very long net position.
The sell-off was justified also by the absence of activity on the physical market and by the fears linked to the covid pandemic.
The European Commission for its part has an estimate of future wheat production for the EU of 27 to 126.7 million tonnes against 117.1 last year.
Barley production is set at 56.3 million tonnes against 54.7 last year.
Maize production is expected at 71.2 million tonnes against 64.9 last year.
Rapeseed production is expected at 16.73 million tonnes against 16.1 last year while the rapeseed imports for the next season are predicted at 5.8 million tonnes against 6.2 this year.
Black Sea wheat markets are under further pressure with residual supplies working their way into the market as farmers approach the new harvest.
Russian analyst Ikar has raised its 2021 national harvest estimate by 1.8 Mt to 79.8 Mt.
For several days, indeed, the authorities have been communicating on a tangible improvement in the conditions of winter crops.
The latest communication dates back to yesterday and indicates 100% lifting in the Stavropol region near Krasnodar.
60% of the crops are in conditions deemed favorable.
Ikar also boosted their export forecast by 36.7 million bushels to 1.451 billion bushels for the 2021/22 marketing year, which will begin on July 1 in Russia.
Also Aussie prices were lower yesterday with the global weakness but little trade was reported other than a few ongoing logistical squeezes and not enough to move the market.
On the international scene yesterday, we recorded the purchase by Japan of 111,000 t of corn from the USA and 66,000 t of feed wheat by South Korea.
Ethiopia has launched a tender for 400,000 t of milling wheat.
Tonight we will see how the sessions close.
