Good morning Farmer Family …
US farm markets were mixed but mostly higher yesterday.
Corn prices gained 1.01% with Sep contract still held above the $6/bu mark.
That is the fifth time in six sessions.
Corn prices were supported by concerns that hot and dry weather in the U.S. Midwest could cut into harvest yields.
Soybean prices also were firmer, recovering from sharp declines immediately after the July WASDE report lowered the global demand outlook for crops.
August contracts led the way, up 1.12%.
Soymeal prices were 2.92% higher on the day.
Meanwhile soyoil closed triple digits weaker, down 1.85%.
The wheat complex ended weaker by the close, extendig previus session’s losses.
Really prices tried to bounce back, but at one point the front month CBOT SRW wheat contract 0.43% lower.
Kansas City wheat prices closed with 0.63% losses on the day.
Spring wheat prices went home with front month losses of 0.54%.
Operators are looking for clarity about the potential for a resumption in Black Sea shipments from Ukraine.
U.N. Secretary-General Antonio Guterres said that an “important and substantive step” was made toward a comprehensive deal to resume Black Sea exports of Ukraine grain after talks between Russia, Ukraine, Turkey and U.N. officials on Wednesday.
On the weather side, corn Belt rain amounts through next Tuesday are forecast from ½ to 2” in 65% of the region with some amounts of 2 ½ to 3” possible in some areas.
Temperatures are forecast to be near to slightly below normal.
The SE U.S. is predicted to receive ¾ to 2 ½” during the period with a few amounts between 3 and 5”.
Temperatures are forecast to be near to below normal.
Delta rain amounts will range between ¾” to 2 ½” in 55% of the region with a few amounts of 3-5” – especially in southeastern areas.
Temperatures are forecast to be near to below normal.
Moisture expected for the U.S. HRW area is between 1/10 to ¾” over 60% of the region with temperatures forecast to be above normal most often.
As the spring wheat and durum crops progress in development, producers in North Dakota are busy monitoring fields for disease and pest issues.
Some producers are reporting higher than normal levels of grasshopper infestations and some risk for Fusarium.
So far, however, no major, widespread issues are reported.
Crop development stages vary widely across the state.
Moisture levels remain mostly adequate.
Crop conditions are highest in North Dakota where spring wheat is 81% rated in good to excellent condition.
With the adequate moisture and decent growing conditions so far, crop durum condition ratings are quite high with 89% of the state’s crop in good to excellent condition.
Meantime, the hot and dry weather could lower corn and soybean yields in US producers including Indiana, Michigan and Minnesota over the next two weeks, according to Commodity Weather Group.
On the demand side, EIA’s data showed average daily ethanol production was 1.005m barrels during the week that ended 7/8.
That was down from 1.044m bpd last week and was the lowest weekly output since May.
Ethanol stocks were 116k barrels higher wk/wk mainly in the West Coast.
Ahead of the weekly Export Sales report will out this afteroon, old crop corn bookings are estimated as being between 100k MT of net cancelations and 300k MT of net new sales in the week that ended 7/7.
New crop sales from the same week are estimated as 100k to 400k MT.
As for soybean, analysts are expecting the report show weekly export sales of soybeans in the week ended July 7 were in a range from -100,000 to 500,000 tonnes.
That compares with 80,054 tonnes the prior week.
Soymeal export sales estimates range from 50,000 MT to 300,000 MT, with as much as an additional 50k MT for 22/23.
Soyoil export sales were expected between zero and 20,000 tonnes and soymeal export sales between 50,000 and 350,000 tonnes.
That compares with week-ago figures of -12,000 tonnes and 179,242 tonnes, respectively.
As for wheat, analysts were expecting the show weekly export sales of wheat in a range from 200,000 to 500,000 tonnes.
That compares with 286,385 tonnes the prior week.
Meantime, yesterday commodity funds were net buyers of CBOT corn, soymeal and soybean futures contracts.
While they were net sellers in wheat and in soybean oil.
In energy markets, oil prices fell on Thursday.
Investors are weighening tight supplies and the prospect of a large U.S. rate hike, that could stem inflation but curb crude demand at the meantime.
Thus, Brent crude futures for September were down 18 cents to $99.39 a barrel at 0727 GMT after settling below $100 for the second straight session on Wednesday.
U.S. West Texas Intermediate crude for August delivery was at $95.84 a barrel, down 43 cents, after rising 46 cents in the previous session.
Recession, indeed, concerns a lot despite a drop in crude and refined products exports from Russia and supply disruption in Libya.
Data from the U.S. Energy Information Administration also point to slackening demand with product supplied slumping to 18.7 million barrels per day, its lowest since June 2021.
Crude inventories rose, bolstered by another big release from strategic reserves.
China’s daily crude oil imports in June sank to their lowest since July 2018, as refiners anticipated lockdown measures to curb demand, customs data showed on Wednesday.
U.S. President Joe Biden will on Friday fly to Saudi Arabia, where he will attend a summit of Gulf allies and call for those allies to pump more oil.
In freight markets, the Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities, slipped on Wednesday to hover near a 5-month low as falling rates for panamax and supramax vessels overshadowed gains in the capesize segment.
The overall index, indeed, was down 11 points, or about 0.6%, at 2,002 points, its lowest since Feb. 18.
Particularly, the capesize index gained 85 points, or 3.8%, to 2,334 points.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were up $703 at $19,358.
The panamax index was down for a 17th straight session, shedding 88 points, or 4.2%, to 2,008 points, its lowest since Feb. 8.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased by $792 to $18,075.
The supramax index fell by 46 points to a fresh five-month low of 2,077 points, registering its 15th straight decline.
In equity markets, U.S. stock indexes Wednesday settled moderately lower.
A larger-than-expected increase in the U.S. June CPI report reinforced speculation the Fed will continue to raise interest rates aggressively.
The U.S. June CPI, indeed, rose +9.1% y/y, stronger than expectations of +8.8% y/y and the largest increase in 41 years.
June CPI ex-food & energy eased to 5.9% y/y from 6.0% y/y in May but was stronger than expectations of 5.7% y/y.
Meantime, the International Monetary Fund (IMF) cut its U.S. 2022 GDP forecast to 2.3% from last month’s estimate of 2.9% and raised its U.S. 2022 jobless rate estimate to 3.7% from 3.2%.
In this context, the S&P fell 0.45%to 3,801.78.
The Dow Jones Industrial Average fell 0.7% to 30,772.79, and the Nasdaq composite dropped 0.2% to 11,247.58.
Traders, however, are looking ahead to the latest quarterly results from big U.S. companies in the next few weeks.
Meantime, Asian stock markets rose on Thursday.
Shanghai, Tokyo, Hong Kong and Sydney advanced.
Investors worry aggressive action by the Fed and other central banks might derail global growth, although fears are hitting more harder the markets with more inflation concerns.
Thus, the Shanghai Composite Index picked up 0.4% to 3,295.83 and the Hang Seng in Hong Kong advanced 0.3% to 20,855.29.
Tokyo’s Nikkei 225 gained 0.8% to 26,689.95.
Panasonic Holdings rose 1.1% after the battery maker announced plans for a multibillion-dollar factory to supply Tesla and other automakers in Kansas.
Sydney’s S&P-ASX 200 added 0.4% to 6,646.60 after official data showed employment rose more than expected in June.
The Kospi in Seoul edged 0.1% higher to 2,330.74.
India’s Sensex gained 0.4% to 53,701.38.
New Zealand and Jakarta advanced while Singapore and Bangkok declined.
In currency tradeing, the dollar rose to 138.37 yen from Wednesday’s 137.32 yen.
The euro declined to $1.0024 from $1.0062.
From Canada, while spring wheat production in Canada was expected to be higher because of the increase seen in seeded acres, new crop quality is unknown, with CWRS indicating it could point to lower protein and grades.
The concern over new crop protein quality could result in vast price ranges between the diverse quality and specifications for spring wheat.
This display of concern is not seen for the old crop, as it has high quality and high protein levels, according to sources.
On predictions of the new crop being large and of lower protein content, shippers looking to export CWRS are concerned about accumulating enough high protein cargo, a CWRS export merchandiser said.
Moreover, demand for old crop has been limited on two main factors: lower flat prices influencing demand on short farmer selling, and old crop availability.
About new crop expected, there’s talk of limited availability for the old crop, with farmers holding on to the crop amid falling Minneapolis Grain Exchange futures, according to sources.
MGEX futures for the September contract have fallen $4.7350/bushel from May 17, its highest settle of $13.8950/bu for this year’s contract, to $9.2375 on July 12.
Tracking lower MGEX futures, CWRS outright prices for the three loading periods have shifted lower May 17 to July 12, with prices for the 30-45 day, 45-60 day and 60-75 day loading periods dropping $172.05/mt, $168.57/mt and 167.46/mt, as data showed as of July 13.
From South America, Argentina’s wheat harvest for the 2022/23 season is expected at 17.7 million tonnes, down from a previous estimate of 18.5 million tonnes, the Rosario Grains Exchange said late on Wednesday.
The decrease comes due to a drop in the estimated planting area because of a drought in agricultural areas.
The Exchange, indeed, now sees areas planted in wheat at 5.9 million hectares (14.6 million acres), down from 6.2 million hectares forecast in June.
In May, the Buenos Aires exchange had estimated a planted area of 6.6 million hectares, while now it expects 6.2 million hectares.
Meantime, Rosario Grains Exchange revised upwards its 2021/22 forecast for corn production, now estimates to 51 million tonnes, up from a previous estimate of 49.2 million tonnes.
Farmers have hauled in 85% of the area sown with the grain.
Meantime, Argentina increased its 21-22 corn export quota by 6 to 36 MMT.
Export registrations at the end of June were 27.6 with the USDA forecasting a 39 MMT total or about 2 less than in the preceding year.
In Brazil, CONAB indicated Brazil’s Safrinha crop is 40% harvested as of July 9th.
Brazil exported 953 K of corn the 1st 6 days of July for a 410 K/75% increase versus July 2021.
However, IMEA reports Mato Grosso have so far sold only 11% of this year’s expected crop, well off last year’s 26% pace and below the 21% 5-year pace.
Meantime, the sale of Brazil’s 2022 soy crop reached 76.7% of the estimated output through July 8, according to a survey released by consultancy Datagro on Wednesday, lagging last year’s pace and a five-year historical average.
However as with corn, soybean producers in Mato Grosso have been somewhat slow to forward book with sales at 25% of the crop, 9+ points behind 21-22 and slightly less than the 5-year average of 25%.
In Europe, wheat prices edged higher, recovering from the drop in session earlier.
September wheat on Paris-based Euronext was up 0.8% at 344.50 euros ($347.46) a tonne.
It earlier had slipped to 333.75 euros.
A heatwave in southern France, was raising concern about stress to developing maize crops, although this hot spell was leading to rapid progress in French wheat harvesting, with more signs of improving yields further north after poor early results in the south.
On this wake, Tuesday the U.S. government trimmed its forecast for EU maize production, also citing a reduced estimate for Italy.
The current hot weather risks prolonging a dire drought in Italy that led the authorities to declare an emergency along the river Po.
Farming lobby Coldiretti estimates maize production will fall by 30% compared to around 6 million tonnes last year.
In Spain, maize production could drop by 16% to 3.57 million tonnes after water scarcity led farmers to cut planting and preserve irrigation resources for fruit, according to Cooperativas Agro-Alimentarias, an umbrella group of farming cooperatives.
In France, where irrigation is less widespread than in Spain, crop conditions could deteriorate after a good start to the growing season.
However, French farmers cut back on maize planting this year due to rising fertiliser and energy costs.
The market is monitoring forecasts, which show heat could ease next week in western Europe but rain may remain limited.
There are also concerns about hot, dry weather in central and eastern Europe, including in Germany, Hungary and Romania.
In Germany, dry, sunny weather was seen as positive as the country’s wheat harvest approaches, but corn crops are suffering from lack of water and unless Germany gets widespread and heavy rain in the next two weeks or so, maize harvest forecasts will probably have to be cut to under 4 million tonnes.
Germany harvested 4.2 million tonnes of grain maize in 2021.
The release of first official EU export figures for the start of the 2022/23 season was again delayed by a technical problem.
Meantime, French soft wheat exports outside the European Union are expected to reach a three-year high in 2022/23 after a strong start to the season, farm office FranceAgriMer said on Wednesday.
In first projections for the season that began this month, the office forecast shipments of 10.3 million tonnes, 17% above a reduced estimate of 8.8 million tonnes for 2021/22 and the highest since 2019/20.
Record prices linked to the war, indeed, slowed demand at the end of last season.
But now, competitive French prices, supported by a slide in the euro to virtual parity with the dollar, were boosting export prospects, although uncertainty remaine over Chinese demand and how much Russia would export.
For soft wheat exports within the EU, the office projected France would ship 7.0 million tonnes in 2022/23, down 12% from an unchanged estimate of 8.0 million for 2021/22.
Soft wheat stocks were projected to fall by nearly 30% to 2.3 million tonnes compared with an increased 2021/22 estimate of 3.3 million.
Barley stocks were projected to rise by 28% to almost 1.6 million tonnes in 2022/23 as a drop-off in demand in China was expected to curb exports, FranceAgriMer said.
In this context, non-commercial market participants cut their net long position in Euronext milling wheat futures and options in the week to July 8, data published by Euronext on Wednesday showed.
Non-commercial participants, which include investment funds and financial institutions, lowered their net long position to 97,045 contracts from 102,956 a week earlier, the data showed.
Commercial participants similarly lowered their net short position to 114,677 contracts from 122,695 a week earlier.
Commercials’ short positions accounted for 66.4% of the total short position, while commercial long positions accounted for 47.2% of total long positions.
Non-commercial short positions represented 33.6% of total short positions, while non-commercial net long positions accounted for 52.8% of the total longs.
In Euronext’s rapeseed futures and options, non-commercial market participants shrank their net short position to 20,280 contracts from 24,063 a week earlier.
Commercial participants dropped their net long position in rapeseed to 18,688 contracts from 20,112 a week earlier.
From the United Kingdom ,Britain’s wheat imports rose in May but are still running well behind last year’s pace, customs data showed on Monday.
Wheat imports for the month totalled 168,940 tonnes, up from 130,177 tonnes in April.
France was the largest supplier in May, shipping 85,319 tonnes followed by Canada with 51,015 tonnes.
Cumulative imports since the start of the 2021/22 season, which began on July 1, 2021 totalled 1.82 million tonnes, down from 2.28 million in the same period a year earlier.
France has been Britain’s largest supplier so far in the 2021/22 season with shipments of 457,337 tonnes.
Imports are expected to fall this season after the nation’s wheat harvest totalled 14.02 million tonnes last summer, an increase of 45.2% from the previous year.
From the Black Sea basin, Russia, Ukraine, Turkey and the United Nations are due to sign a deal next week aimed at resuming Ukraine’s Black Sea grain exports, but U.N. chief Antonio Guterres warned there was still “a long way to go” before there would be peace talks to end the war.
Turkish defence minister Hulusi Akar said the deal to be signed next week includes joint controls for checking shipments in harbours and Turkey ensuring the safety of Black Sea export routes.
Turkey would also set up a coordination centre with Ukraine, Russia and the United Nations for grain exports.
Guterres was a little more cautious, telling reporters that “hopefully we’ll be able to have a final agreement” next week, adding: “I’m optimistic, but it’s not yet fully done.”
“We have seen a critical step forward,” Guterres said in New York. “More technical work will now be needed to materialize today’s progress. But the momentum is clear.”
Ukraine also sparked hopes on Tuesday for an increase in grain exports despite Russia’s blockade of Black Sea ports, noting that ships had started to pass through an important mouth of the Danube river.
The United Nations is also working to try and facilitate Russian grain and fertilizer exports.
Russia has continued to export grain since the war started but there is a lack of large vessels as many owners are afraid to send them to the region.
Cost of freight and insurance have also risen sharply.
The United States has said Russian grain and fertilizer are not subject to sanctions and has offered to give written assurances to shipping companies and importing countries.
Farmers of both countries are currently harvesting the 2022 wheat crop.
The Russian wheat harvest has been completed on 9% of the expected area with the collected reaching 11.6 MMT as of July 11, even if recent rains in some Baltic countries are fostering concerns over wheat quality.
Russia is expected to harvest a bumper crop but its export outlook has been clouded by Western sanctions.
July-November is usually the busiest time for traders to ship the new crop.
The coming harvest is also at risk as Ukraine is now short of storage space due to the halt in exports.
However, some analysts said Ukraine would not necessarily have a major impact on wheat trade this season even if a diplomatic deal would reached to re-open its sea ports, given the time needed to restore infrastructure.
From the Middle Kingdom, a heatwave sweeping across southern China is threatening crops and adding strain to the local power grids.
However, China’s wheat for the summer harvest rose slightly from the previous year, the country’s statistics bureau said on Thursday, following concerns after heavy autumn rains delayed planting for the winter harvest.
Summer wheat crop output in the world’s top grower of the grain rose 1.0% to 135.76 million tonnes in 2022, the National Statistics Bureau said, while wheat planting acreage this summer increased 0.2% from last year.
Overall summer grain output also rose 1.0% from the previous year to 147.39 million tonnes, and summer planting acreage saw yearly gains of 0.3%.
The agriculture ministry, also said its winter wheat crop improved more than expected.
China has shored up financial support for wheat planting.
It has allocated 5 billion yuan ($743.47 million) in total from its central finance system to stabilise winter wheat output this crop year as part of measures to strengthen food security in the world’s most populous country.
It also offered 10 billion yuan in subsidies to support grain cultivation and production, alleviate the impact of rising costs and to encourage cultivation of the grain.
($1 = 6.7252 Chinese yuan renminbi).
From South east Asia, the Malaysian Palm Oil Board (MPOB) reported June end-of-month stocks of 1.66 MMT, a near-9% increase from May as the seasonal rise in production was a little less than anticipated.
Production for the month of 1.545 MMT, fell slightly short of MPOA’s 1.56 estimate.
Output in subsequent months should trend higher as the crop reaches its peak production cycle, provided there are few labor issues.
From Australia, ASW wheat has held its value in an otherwise softening market which is reflecting offshore moves and largely bright prospects for Australia’s new-crop production.
While barley and SFW wheat prices are under pressure in the global complex from new-crop Northern Hemisphere corn, current-crop ASW wheat appears to be holding its own, despite the uptick in grower selling.
Trade sources report increased activity in new-crop wheat sales, with SFW grades starting to trade in the north, and some action around APW multigrade in the south.
Rain-related disruptions to coast-bound rail movements in New South Wales have increased the demand for trucks to deliver to domestic consumers and export terminals, but have not yet had an impact on prices.
Meantime, local values were yet again a mixed bag yesterday.
New crop wheat basis firmed and exporter selling activity increased over the day.
The logistics battle keeps building, a massive operation underway to repair a critical rail line in the Blue Mountains after a landslide last week will see it closed for a month.
Planning is underway to reopen one track from 24 July to allow only the movement of critical freight, and likely only at night.
This comes on top of slippages on the Newcastle line and a recent derailment near Yass which have all combined to create significant disruptions throughout the network.
On international trade scene, leading South Korean feedmaker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 138,000 tonnes of animal feed corn and 65,000 tonnes of feed wheat.
The deadline for submission of price offers in the tender is also Thursday, July 14.
The corn is sought in two consignments each of up to 69,000 tonnes.
Shipment of the first corn consignment for arrival around Oct. 20 is sought if sourced from the U.S. Pacific Northwest coast between Sept. 16 and Oct. 5, if from the U.S. Gulf/East Europe between Aug. 27 and Sept. 15, from South America between Aug. 22 and Sept. 10 or from South Africa between Sept. 1 and 20.
Shipment of the second consignment for arrival around Oct. 30 is sought from the U.S. Pacific Northwest coast between Sept. 26 and Oct. 15, from the U.S. Gulf/east Europe between Sept. 6 and 25, from South America between Sept. 1 and 20 or from South Africa between Sept. 11 and 30.
One feed wheat consignment is sought for arrival around Oct. 10.
Wheat shipment is from the U.S. Pacific Northwest coast/Australia/Canada between Sept. 6 and 25, from the U.S. Gulf/Europe between Aug. 17 and Sept. 5, from South America between Aug. 12 and 31, from South Africa between Aug. 22 and Sept. 10 or from India between Sept. 1 and 20.
South Korea feed compounder MFG was said to have booked a 68 K cargo of either South African or South American corn for November 14th arrival at $334 CFR.
The Taiwan Flour Millers’ Association purchased an estimated 44,725 tonnes of milling wheat to be sourced from the United States in a tender.
Jordan wheat tender no. 50.2022.40 closing 13/07/2022 got 2 participants:
CHS and Ameropa.
MIT purchased 60,000 MT from Ameropa at 413$ for shipment fh Nov.
CHS offered at 439.35$.
Next Tuesday a new tender will be issued for Nov/Dec shipment.
That’s all, thank you.
To all of you, we wish you a good day and … Good Harvest 2022!
Author: Sandro F. Puglisi
