US farm markets were mixed to start the week.
Corn prices firmed another 0.91% higher, which was enough to see $8 again.
The soybean complex sank lower after Indonesia noted some key exclusions in its palm oil export ban.
Soybeans ended the day 0.73% lower.
Soymeal prices closed near their lows, going home 1.39% weaker.
Soy oil prices went home 0.62% in the red.
Wheat prices were mixed but mostly firm, anchored by significant gains in Minneapolis contracts.
Particularly, Chicago wheat turned red in the afternoon, leaving behind KC and MPLS wheat in the plus territory.
SRW, indeed, went home with 0.33% losses on the day.
HRW ended Monday’s trade 0.22% higher.
Spring wheat prices led the complex on Monday, gaining double digits of as much as 1.42% in the front months.
Meantime, the CME announced daily winter wheat trading limits will be reduced to 70c/bu, from 85 cents, beginning May 2nd.
As for corn the limit will be 50 cents (up, from 35 cents).
As for soybeans the limit will be 115 cents (up from 90 cents).
In energy markets, oil prices bounced on Tuesday, steadying after a sharp fall of 4% in the previous session, as worries over China’s fuel demand were soothed by the central bank’s pledge to support an economy hit by renewed COVID-19 curbs.
Thus, Brent crude futures were up 59 cents, or 0.58%, at $102.91 a barrel after rising to $103.93 earlier in the session.
U.S. West Texas Intermediate contracts were up 34 cents, or 0.35%, at $98.88 per barrel at 06:58 GMT after climbing to $99.82 a barrel in early trade.
Both contracts had settled around 4% lower on Monday, with Brent falling as much as $7 a barrel in the session and WTI dipping roughly $6 a barrel.
On the supply side, analysts said that phasing out of Russian oil from the market would continue to support prices.
Separately, in a bearish signal for oil markets, according to analysts U.S. crude inventories should increased by 2.2 million barrels in the week to April 22.
Stocks of gasoline rose by about 500,000 barrels last week, and distillate inventories, which include diesel and heating oil, were expected to have decreased by 600,000 barrels.
The inventory report from the American Petroleum Institute will out at 4:30 p.m. EDT (20:30 GMT) on Tuesday.
The official government Energy Information Administration data will be out on Wednesday.
In freight markets, the Baltic Exchange’s main sea freight index rose on Monday to a more than three-week high, as the capesize segment strengthened.
The overall index, indeed, was up 49 points, or 2.12%, at 2,356 points, its highest since April 1.
Particularly, the capesize index gained 158 points, or 8.56%, to 2,003 points, its highest in more than one month.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were up $1,310 at $16,609.
The panamax index was down 37 points, or 1.23%, at 2,967 points.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $336 to $26,703.
The supramax index rose 21 points to 2,699 points.
Meantime, on week 16, there was a slight decrease in freight rates in the Azov and Black Sea region.
The freight rate for a 3K parcel of wheat from Azov to the Marmara Sea ports was about $79 per ton, Sea Lines shipbrokers report.
There was a sharp drop in demand for Russian grain last week, first of all, on the part of Turkish partners.
Shipments to more distant destinations such as Lebanon, Egypt or Greece are contracted, but their number is insignificant.
As a result, more and more spot vessels began to appear in the Black and Azov Seas.
If the situation on the grain market does not change in the coming days, highly probability, freight rates are highly likely to declining, Sea Lines forecast.
According to Sea Lines, on week 16, freight rates for wheat parcels from Azov made $77 to the Black Sea, $79 to Marmara, $99 to Mersin and $100 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 were up a dollar or so.
On week 16, freight rates for shipping corn by 3,000 dwt bulkers to Iran make $21 from Aktau, $26 from Makhachkala, and $33 from Astrakhan.
In equity markets, U.S. stock indexes Monday settled moderately higher.
Stock indexes initially opened lower and dropped to 1-1/4 month lows on negative carry-over from a -5% plunge in the Shanghai Composite to a 1-3/4 year low on concern the global economy will slow as China ramps up pandemic restrictions to contain a worsening Covid outbreak.
Also, energy stocks slumped Monday after crude prices fell more than -3% to a 1-1/2 week low, weigheing on the market.
However, a decline in the 10-year T-note yield Monday to a 1-week low sparked gains in mega-cap technology stocks.
Also, M&A activity gave stocks a boost after Elon Musk agreed to buy Twitter for $44 billion.
In addition, the PBOC Monday increased stimulus measures in an attempt to boost liquidity after it cut the amount of foreign exchange reserves needed to be held by financial institutions by 1 percentage point to 8%.
Finally, an easing of inflation expectations Monday was supportive for stocks after the 10-year breakeven inflation rate fell to a 1-week low.
Thus, the S&P 500 climbed 0.6% to 4,296.12 after erasing an early 1.7% loss.
Twitter jumped by 5.7%.
Microsoft gained 2.4% and the Class A shares of Google’s parent, Alphabet rose 2.9%.
The Dow Jones industrial average rose 0.7% to 34,049.46, while the Nasdaq composite rallied 1.3% to 13,004.85.
Wall Street is in the midst of one of the most important stretches of the earnings season.
Apple, Microsoft, Amazon and the parent company of Google are all on deck to report this week.
Since they’re among the biggest companies by market value, their movements hold the most sway over the S&P 500.
However, worries are also high that the U.S. economy might slow sharply or even fall into a recession because of the big interest-rate increases the Fed is expected to push through.
Wall Street, indeed, will also get some key economic data this week.
The Conference Board will release its measure of consumer confidence for April on Tuesday.
The Commerce Department will release its first-quarter gross domestic product report on Thursday.
Meantime, Asian shares were mostly higher this morning.
Shanghai fell back on renewed concerns over pandemic lockdowns.
The Shanghai Composite index, indeed, fell 0.9% to 2902.46, giving up early gains.
On Monday it slumped 5.1%.
Hong Kong’s Hang Seng, which lost 3.7% on Monday, was trading 0.7% higher at 20,000.69.
The Kospi in Seoul gained 0.5% to 2,669.41 after the government reported the South Korean economy grew at a 3.1% annual pace in the first quarter of the year, up 0.7% from the previous quarter.
In Tokyo, the Nikkei 225 rose 0.4% to 26,700.11 and India’s Sensex gained 1.2% to 57,254.49.
Australia’s S&P/ASX 200 dropped 1.9% to 7,331.30.
In currencies trade, the dollar slipped to 127.89 Japanese yen from 128.14 yen late Monday.
The euro rose to $1.0727 from $1.0713.
The dollar index on Monday rose by +0.540 (+0.53%).
The dollar Monday moved moderately higher and posted a new 2-year high, as global growth concerns sparked safe-haven demand for the dollar.
On the weather side, this week wont be as wet as last week, but some measurable rains are still expected in parts of the Midwest and Plains between today and Friday, per the latest 72-hour cumulative precipitation map from NOAA.
Very few areas are likely to see more than 0.25” during this time. NOAA’s latest 8-to-14-day outlook predicts a return to seasonally wet weather for the central U.S. between May 2 and May 8, with warmer-than-normal conditions building in the Southern Plains.
On the supply side, the U.S. Department of Agriculture on Monday rated 27% of U.S. winter wheat in good to excellent condition, down three percentage points from a week ago and the lowest for this time of year since 1989, as drought persists in the Plains wheat belt.
The figure also fell below the lowest in a range of analyst expectations.
“The winter wheat conditions were probably the most surprising, dropping three points”.
In Kansas, the top U.S. winter wheat producer, the USDA rated 26% of the crop as good to excellent, down from 33% a week earlier.
Ratings also declined in Oklahoma, Nebraska and South Dakota, but improved in Colorado, Montana and Texas.
The weekly NASS Crop Progress report showed 11% of winter wheat had headed as of 4/24. That compares with 19% on average.
About 70% of the U.S. winter wheat crop was in an area experiencing drought as of April 19, the government said.
In the Midwest, cool and wet conditions slowed corn and soybean planting.
The USDA said the U.S. corn crop was 7% seeded by Sunday, below the average analyst estimate of 9% and the five-year average of 15%.
That was up from 4% last week, on expedient pace in North Carolina, TN, and KS.
In IA, 2% of corn fields were planted compared to their 15% average.
In NE, 10% of corn fields were planted as of 4/24 compared to 11% on average.
NASS also reported 2% of the crop had emerged.
The average is for 3%.
Sorghum planting progress was 19% complete, compared to the 21% average pace.
TX was 63% planted for 22/23 milo.
Oats planted was reported at 39% vs. the five-year average of 48%, and 27% of oats had emerged as of April 24, compared with 32% for the previous five-year average.
U.S. soybean planting was 3% complete, matching trade expectations.
That was up from 1% last week, but behind the five-year average of 5%.
The U.S. spring wheat crop was 13% planted up from 8% last week, the USDA said.
That was ahead of the average analyst estimate of 12% but lagging the five-year average of 15%.
USDA’s Monday report also indicated that nationwide, topsoil moisture is rated as 50% adequate and 16% surplus.
The previous year was 59% adequate and 7% surplus.
On the demand side, Weekly Export Inspections data showed 1.65 MMT of corn was shipped through the week that ended 4/21.
That was up from 1.175 MMT during the previous week but was down 303k MT from the same week last year.
Accumulated corn exports reached 34.879 MMT according to the weekly USDA data.
As for soybean, data showed 602,178 MT of soybeans were exported during the week that ended 4/21.
That was down from 1 MMT last week, but compares to just 284k MT during the same week a year ago.
Accumulated soybean exports reached 46.598 MMT as of 4/21, trailing last season’s pace by 16%.
As for wheat, shipments from the week that ended 4/21 were at 287,997 MT.
That was down from 446,225 MT last week and compares to 581k MT during the same week last year.
MYTD wheat exports reached 18.7 MMT as of 4/21, which trails last year’s pace by 18.9%.
Meantime, private exporters reported to the USDA sold 330,000 metric tons of soybeans for delivery to China.
Of the total, 66,000 metric tons is for delivery during the 2021/2022 marketing year and 264,000 metric tons is for delivery during the 2022/2023 marketing year.
Also, they reported sold 204,000 metric tons of soybeans, for delivery to China during the 2022/2023 marketing year.
In this context, corn basis bids were mostly steady on Monday but did tilt 5 cents lower at an Ohio river terminal, 10 cents lower at an Indiana ethanol plant and a penny higher at an Iowa ethanol plant.
Soybean basis bids were mostly steady across the central U.S. to start the week but did trend 4 cents lower at an Ohio elevator and 10 cents higher at an Iowa processor.
The funds were net buyers yesterday for 6,500 lots of corn, but net sellers for 9,000 lots of soybeans and 4,000 lots of wheat.
Meantime, this morning wheat prices posted an increase of + 1.5 to + 2% in pre-opening on Chicago, following crop progress report results.
From Canada, Canadian week 37 wheat exports were dismal at just 174.1k mt for a total export volume of 8.1 million mt.
Visible supplies in port locations continue to be 1.2 million mt.
Canada needs to export an average of 342k mt of wheat per week to meet the AAFC’s unchanged export number.
Canadian week 37 durum exports were at 34k mt, down from 42.900 mt prior week.
Meantime, AAFC published their April balance sheets last week.
AAFC left the Canadian non-durum wheat balance sheet entirely unchanged.
They are still forecasting that 2021/22 exports will be 13.2 million mt with a 3.3 million mt carry-out.
As for durum, AAFC made minor revisions to the Canadian durum balance sheet.
For 2021/22, imports were reduced by 5k mt, exports were raised by 50k mt, and feed use was decreased by 5k mt.
This resulted in ending stocks falling by 50k mt to 450k mt.
For the 2022/23 crop, AAFC offset the 50k mt decrease in beginning stocks by a respective decrease in feed use for an unchanged ending stock number of 900k mt (now two times the 2021/22 volume).
Meantime, AAFC is forecasting a 9% increase in seeded area.
Estimates going into StatsCan’s Planting Intentions report show traders expect to see an average of 24.15m all wheat acres.
Durum specific area is estimated at 5.75m.
For all Canadian wheat that would be a 2.94% increase in area yr/yr if realized, though with just 220k acres more in durum.
In addition it should to note that the supply of durum next year completely depends on yield assumptions.
Stat’s Canada is using an 87% yield increase to 34.2 bushels-per-acre, which gives a production number of 5.5 million mt.
If using a 6-year average yield of 36.4 bushels-per-acre, which results in a 5.9 million mt number.
Meantime, on the weather side, SE Saskatchewan and S Manitoba were hit with another bout of precipitation, but moisture continues to miss the parts of Alberta and Saskatchewan that could benefit the most from additional moisture.
There is some precipitation slated for S Alberta in the 7-day forecast.
From South America, a good rain forecast and cool weather during the austral autumn in Argentina will help the 2022/23 wheat crop in the key farm belt growing region ahead of sowing that starts in mid-May, the Buenos Aires grains exchange said in a weather report on Monday.
Last week the grains exchange estimated that the Argentine wheat planting area for 2022/23 would be 6.5 million hectares (16 million acres), 200,000 hectares less than in the previous season which yielded a record harvest of 21.8 million tonnes.
“Conditions are likely to be favorable in the growing areas closest to the Atlantic coast and river areas, with moderate to abundant rainfall and good availability of cold” the exchange said, referring to the eastern part of Buenos Aires province.
Buenos Aires is the largest farming region in Argentina and the southeast of the province is the country’s wheat heartland.
The Buenos Aires exchange also warned, however, that producing regions far from the Atlantic and the Parana River basin could see drought, especially the southwest of Buenos Aires.
Meantime, the USDA attaché in Argentina estimates the future soybean harvest at 51 million tons.
MY 2022/23 sunflowerseed planted acreage is projected up at 2 million HA, with total production estimated at 4 MMT in response to high prices.
MY 2021/22 soybean and sunflowerseed production estimates remain unchanged at 41 MMT and 3.4 MMT, respectively.
Projected soybean crush is reduced to 38.9 MMT, in part due to reduced imports from Paraguay.
According to USDA attaché, Argentine wheat exports in marketing year (MY) 2022/2023 are forecast down at 12.6 million metric tons (MMT), as result of a smaller acreage and lower productivity.
Meanwhile, barley exports are projected up at 3.7 MMT, which would be the largest on record.
Corn exports in MY 2022/2023 are forecast at 38 MMT, the second-highest on record.
Sorghum exports are forecast at 2 MMT, the same as in the previous year.
For MY 2021/22 Post estimates corn, sorghum, and rice production slightly lower than official USDA estimates at 51.5 MMT, 3.3 MMT, and 1.2 MMT respectively.
For wheat and barley, Post estimates higher production than the official USDA estimates at 21.9 MMT and 3 MMT.
Argentina’s government raised domestic prices for corn-based bioethanol on Monday.
That is the second increase in a month for the biofuel which is mandatory for mixing with gasoline in the country.
According to the economy ministry’s energy department, bioethanol prices will be set at 94.93 pesos (83 U.S. cents) per liter for April, 96.35 pesos for May, 98.28 pesos for June, 100.74 pesos for July, and 103.76 pesos for August.
The previous price hike, earlier in April, had raised the price to 73.11 pesos per liter for both corn- and sugarcane-based bioethanol.
($1 = 114.1100 Argentine pesos).
In Europe, rapeseed prices showed the greatest volatility.
Wheat and corn prices were hgher, meantime.
International demand and geopolitical worries continue to drive markets.
There seems to be no way the world wheat market can avoid switching big volumes of Black Sea exports to other origins, and EU wheat is first in line.
The durum wheat area in the EU, meantime, is expected to fall by 4% from last year to 2.1 million hectares.
Sweden’s minority Social Democrat government said it had agreed with the opposition Centre Party on 2 billion crowns ($207 million) in temporary tax cuts and other support measures for the agriculture sector.
“The war has pushed up prices for a number of input goods … not least fuel, fertilizer and feed from already high levels,” Finance Minister Michael Damberg told reporters.
“The government believes it is both possible and necessary to expand support measures for Swedish agriculture.”
The measures come on top of a package of measures worth 1 billion crowns agreed in February and need to be approved by parliament.
($1 = 9.6487 Swedish crowns).
From the Black Sea basin, Russian wheat export prices rose last week amid ongoing shipments from the country’s Black Sea ports, analysts said on Monday.
Indeed, prices for wheat with 12.5% protein content for supply in May from Black Sea ports were up $10 to $380 free on board (FOB) at the end of last week, the IKAR agriculture consultancy said, adding the price range was wide.
Sovecon, said Russia exported 590,000 tonnes of grains last week, citing data from ports, compared with 630,000 tonnes a week earlier.
As we know, Russia’s customs service has suspended publication of import-export data to avoid “speculation,” it said last week.
Sovecon estimates that the country’s wheat exports for April will slide 4.5% lower month-over-month to 2,1 MMT.
That would still be nearly triple year-ago results of 800.000 t, however.
Meantime, wheat prices in the domestic market fell amid weakening demand from consumers and exporters as well rising supply from farmers.
Particularly, Domestic 3rd class wheat, European part of Russia, excludes delivery was at 16,275 rbls/t, ($217.84) -200 rbls (Sovecon);
Prices of sunflower seeds were at 41,325 rbls/t, -900 rbls (Sovecon);
Prices of domestic sunflower oil were at 118,350 rbls/t, unchanged (Sovecon);
Price of export sunflower oil was at $1,850/t, +$50(IKAR);
Price of export sunflower oil was at $1,900-2,000/t, unchanged (Sovecon);
Price of soybean was at 52,300 rbls/t, -1,600 rbls (Sovecon);
White sugar prices, Russia’s south, were at $858.7/t +$40.6 (IKAR).
($1 = 74.7120 roubles).
Meantime, spring grains were planted on 1.8 million hectares as of April 19, Sovecon said, that was unchanged from a year earlier.
In Ukraine, Ukrainian analyst APK-Inform raised its expectations for the country’s 2022 wheat production potential, moving from a prior estimate of 14,9 MMT up to 16,96 MMT.
Exports are currently estimated at 12,3 MMT for the 2022/23 marketing year.
Meantime, Ukraine has sent around 80,000 tones of grains to the Romanian Black Sea port of Constanta so far, with more expected to arrive, the port’s manager said on Tuesday.
The grains arrived either by rails or on barges through the Danube river and the port has the capacity to handle exporting additional grains exports.
The port, which has a storage capacity of around 2 millions tones handled exports worth some 24 million tonnes last year.
From the Middle Kingdom, China has stopped its weekly wheat auctions from state reserves, earlier than last year when stocks were higher, traders and analysts said.
China suspended sales of wheat from its reserves last week, and did not release any auction results on Monday, a move that further bolstered prices of the grain which have hit record highs.
Wheat prices in Shandong province, a main producer, hit record high levels at 3,380 yuan ($515.16) per tonne last week, before edging down slightly.
Beijing had been releasing only around 500,000 tonnes of wheat from the reserves in weekly auctions recently, compared with 4 million tonnes at some auctions in 2021.
Auctions last year did not stop until May 10, and more than 27 million tonnes of wheat was sold from the reserves from the beginning of 2021 until the sale was halted before the new harvest.
The market is closely watching China’s new wheat crop, which initially endured the worst crop conditions in history but conditions have since improved more than expected.
($1 = 6.5611 Chinese yuan renminbi).
From South East Asia, Indonesian government officials told palm oil companies on Monday that an export ban announced late last week would cover shipments of refined, bleached, deodorized (RBD) palm olein but not crude palm oil.
Indonesia’s agriculture ministry, indeed, told local government leaders on Monday the plan to ban exports of cooking oil and its raw material will not affect crude palm oil shipments.
Traders were caught by surprise by Friday’s announcement by President Joko Widodo that Indonesia, was halting exports of the edible oil from April 28, to ensure domestic food product availability.
Malaysian benchmark crude palm futures FCPOc3 fell 2.09% after news that ban only cover RBD olein, having jumped nearly 7% to their highest in six weeks.
According to Refinitiv Eikon, Indonesia exported an average of roughly 620,000 tonnes per month of RBD in 2021, compared to an average of around 100,000 tonnes of crude palm oil.
Top destinations included India and Pakistan and Spain.
According to data from Indonesia’s palm oil association (GAPKI) exports of processed CPO in 2021 stood at 25.7 million tonnes, or 75% of total exports of palm products. CPO exports were 2.74 million tonnes in 2021, or 7.98% of the shipments.
In January and February this year, processed CPO exports were 3.38 million tonnes or 79% of exports, while CPO exports were 90,000 tonnes, 2% of the total shipped.
From Australia, Canada’s Public Sector Pension Investments Board (PSP) majority-owned BFB grain cropping, storage, transport and farm inputs business will be consolidated with Daybreak Cropping.
The consolidation will result in one of the biggest cropping operations in Australia consisting of 41 cereal cropping farms across 10 aggregations in four states and will be managed by the current BFB team based in Temora.
Meantime, according to the USDA attaché, Australia is expected to produce another big grain crop in marketing year (MY) 2022/23 after a record setting winter crop and strong summer crop production in MY 2021/22.
Another favorable set of conditions around the time of winter grain planting across most production regions of Australia bodes well for another big planted area of wheat and barley for MY 2022/23.
However, yields are set to come down from the records set in the previous year, resulting in smaller crops.
This is set to lead to a decline in wheat and barley exports in the forecast year from record volumes estimated this year.
FAS/Canberra forecasts wheat production to decline significantly to 29 million metric tons (MMT) in MY 2022/23, but if realized would still be a very large crop.
This follows a 36.3 MMT crop in MY 2021/22, and a 33.3 MMT crop in MY 2020/21.”
Meantime, wheat markets were relatively flat across the board though APW1 was bid $3/t higher to $415/t and SA barley up $5-13/t.
On the weather side, a dry long weekend will have allowed sowing activity to pick up before the widespread rainfall forecast for this week.
On international trade scene, Egypt’s state grains buyer said on Sunday it was seeking vegetable oils for arrival June 10-30 and/or July 1-20, 2022 in an international purchasing tender.
The General Authority for Supply Commodities (GASC) said that traders should submit bids for payment at sight and 180-day letters of credit, and it would choose between them.
The deadline for offers is April 28.
GASC also set a tender for local vegetable oils on Sunday, seeking at least 3,000 tonnes of soyoil and 1,000 tonnes of sunflower oil for arrival June 1-30, 2022.
The deadline for offers is also April 28.
Traders have said both tenders will include a change of rules, where GASC can choose any offer that was reduced after negotiations.
Turkey’s state grain board TMO has issued an international tender to purchase and import about 18,000 tonnes of crude sunflower oil.
The deadline for submission of price offers in the tender is April 28.
Shipment is sought between May 16 and June 16 to the ports of Tekirdag and Mersin.
Some sunoil supplies already in Turkey can be offered for delivery to Mersin.
Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) yesterday has issued an international tender to purchase up to 60,000 tonnes of soymeal.
The deadline for submission of price offers in the tender was also yesterday, April 25.
The soymeal was sought for arrival in South Korea around Aug. 20.
Algeria issued an international tender to purchase 50.000 t of durum wheat from optional origins that closes today.
Algeria often buys more than the nominal amount it lists on these tenders.
The grain is for shipment in May and June.
