Grain prices were mixed but mostly higher yesterday on US markets, after corn rose more than 1% and some wheat contracts climbed more than 2%.
The tightening stocks and export demand, indeed, led to a round of technical buying by operators.
Soybeans retreated lower, in contrast, with traders squaring positions ahead of Friday morning’s WASDE report from USDA.
Also energy futures were mixed with crude oil and diesel that each trended around 0.6% higher, while gasoline saw cuts of around 0.75%.
Nuclear talks again are underway with Iran as politicians hope to reduce the risk of nuclear weapons development.
So, crude oil markets are expecting that any improvements in relations could open up more oil exports, but that since a “breakthrough” politically seems unlikely the impact may prove small.
In spite the members of the Federal Reserve indicated they expect to see significant economic recovery in 2021 and a decline in the unemployment rate to historically low levels by 2023, on Wall St., the Dow was only 16 points up to close at 33,446.
Coming back on grains market, corn prices climbed as traders expect to see healthy export data from USDA today and dwindling domestic stocks from the agency’s WASDE report on Friday.
Ahead of this morning’s weekly export report released by USDA, analysts think the agency will show corn sales ranging between 21.7 million and 47.2 million bushels for the week ending April 1.
Meantime, USDA has maintained its brazilian corn production forecast for MY 2020/21 (March 2021–February 2022) at 105 million metric tons (MMT), still some 4Mt below the last WASDE figure -based on the smaller-than-expected first crop of corn paired with widespread delayed planting of second-crop “safrinha” corn, while for MY 2021/22 (March 2022–February 2023), sets its initial corn production forecast at 114 MMT. A record if realized.
Ethanol production improved again, reaching a daily average of 975,000 barrels for the week ending April 2, per the latest data from the U.S. Energy Information Administration.
That was up from the prior week’s tally of 965,000 barrels per day and reaching the highest production levels since mid-December although stocks continued to draw down to 20.6 million.
Wheat prices found healthy gains after a round of technical buying partly spurred by weather worries in the US Northern Plains that could mute some spring wheat plantings.
Traders, obviusly, are also eagerly awaiting the next round of supply and demand data from USDA.
Ahead of the weekly export report by USDA, out this morning, analysts anticipate wheat sales ranging between 5.5 million and 25.7 million bushels for the week ending April 1.
On the contrary, soybean prices sagged lower as traders unwound a portion of their large net long position ahead of Friday’s WASDE report from USDA.
Expectations for a record-breaking harvest in Brazil this season, indeed, created additional headwinds for the oilseed.
About this, for the 2021/22 crop season, USDA forecasts that Brazilian producers will expand soybean planted area to reach 40 million hectares (ha), up from the estimated 38.5 mn ha planted in the 2020/21 season.
Consequently, the Agency forecasts 2021/22 soybean production at 141 million metric tons (MMT), up from the estimated 134 MMT harvest this season.
Soybean expansion is forecast on current market conditions and trends – including strong demand, high prices, and a favorable exchange rate.
All these conditions are expected to persist well into the 2021/22 season.
Meantime, soybean exports are forecast to hit records this season and next at 85 MMT and then 87 MMT.
On this wake, Brazil’s Anec reports that the country’s soybean exports for April should climb 15% higher year-over-year to reach 599 million bushels.
While corn exports are expected to be much more lackluster this month, with Anec predicting less than 1 million bushels in sales.
Prior to tomorrow morning’s weekly export report from USDA, analysts are expecting the agency to show soybean sales ranging between 3.7 million and 22.0 million bushels for the week ending April 1.
Analysts also predict soymeal sales ranging between 100,000 and 300,000 metric tons last week, plus another zero to 30,000 MT of soyoil sales.
European markets, were hesitant yesterday with bearish elements on cereals, the lack of physical flows as the end of the season approaches, and a lack of competitiveness against main competitors, the Black Sea.
However, the low temperatures has gove rise to fear of frost damage on the earliest plots, mainly on winter barley and wheat.
The impact of these low temperatures will indeed have to be carefully monitored during this critical period in the development of winter crops, even if temperatures will rise again and be accompanied by beneficial rains at the end of the week.
Corn, on its hand, took advantage of the good shape of wheat as well as the sharp rise in prices across the Atlantic to also climb into positive territory.
Significant volatility, in contrast, again in rapeseed with reverse movements between the May 2021 deadline, down € 7 / t, and the 2021 harvest deadlines slightly up.
We must note that the outlook for future production is revised downward every day.
From Black Sea basin, Russia will introduce a floating tax on sunflower oil exports from September 1 for the entire season.
The mechanism is the same as for that already announced for wheat, namely a customs duty corresponding to 70% of the difference between the FOB price and the threshold fixed in this case at $ 1,000 in the case of oil.
At the same time, the Russian authorities decide to increase the customs duty for the seed, which will rise to 50% of the FOB value with a low limit of $ 320 / tonne from July 1.
Aussie local markets were fairly quiet and steady yesterday with location and timing remaining key for any brief premiums in the market.
More and more fieldwork gradually starting up across the country.
Weather maps taking a slightly drier turn on the last runs for the storm moving towards WA, but still calling for 20+ mm across the majority of the wheatbelt there.
South Korea announced yesterday a brief tariff cut on imported corn (3pc) in an attempt to keep food prices under control.
Palm oil is losing ground on profit taking this morning in Kuala Lumpur.
On international trade scenario, Thailand passed on all offers in its tender to purchase 18.5 million bushels of animal feed wheat that closed earlier today, with prices regarded as too high.
The grain would have been shipped in eight consignments between May and December.
Japan issued a regular tender to purchase 3.3 million bushels of food-quality wheat from the United States and Canada.
Of the total, 73% is expected to be sourced from the U.S.
The grain is for shipment in June.
Tunisia, for its part, is purchasing 75,000 t of soft wheat through a call for tenders which ends today.
The grain is for shipment between mid-May and late June.
Algeria, bought a small volume of wheat during its call for tenders which ended yesterday, a volume of between 30 and 50 thousand tonnes, taking into account the small ports of destination.
Tonight we will see how will close the sessions.