Grain prices heated up yesterday, as traders squared positions ahead of tomorrow morning’s World Agricultural Supply and Demand Estimates (WASDE) report from USDA.
They also assessed possible planting delays in the Northern Plains.
Per the latest updates to the U.S. Drought Monitor, indeed, at least 60% of the country has been experiencing some level of overly dry conditions since last September, with 64.4% of the country affected through April 6.
The Northern Plains and Great Lakes Region are the areas most intensively experiencing drought and NOAA’s latest 8-to-14-day outlook anticipates widespread seasonally dry weather will still remain until April 21.
Consequently, corn led the way with 3% gains.
Most wheat contracts finished around 2.5% higher.
Soybean gains were more muted, as rised only about 0.4% higher.
To note also a rally in technology stocks that kept the Nasdaq and S&P 500 in the green, while on Wall St., the Dow inched only 57 points higher to reach 33,503.
New US jobless claims were up well above expectations to 744,000 versus ideas of a continued pull back.
More layoffs were reported despite the recent stimulus measures.
In this context, energy futures were lightly mixed.
Crude oil spilled 0.3% lower.
Diesel and gasoline took out only small gains.
According to the FAO, the food price index rose in March for the 10th consecutive month, returning to the levels of June 2014.
Going back into grains market, corn prices rose substantially higher on expectations for USDA to show moderately lower stocks in this morning’s WASDE report.
Survey figures remain just under 1.4 bbu for corn, 0.85 bbu for wheat, and nearly unchanged for beans, slightly sub-120 mbu from last report.
The first official 2021/22 figures will be published in the May report.
Among the elements supporting corn prices, there are also stocks of ethanol in the USA, which are at their lowest since last November.
The spillover strength from red-hot wheat prices and optimism on export weekly applied additional tailwinds.
About US weekly export sales figures were fairly solid, indeed, mainly on corn at 0.75Mt, including 0.1Mt to China but mostly switched from unknown.
Old crop wheat was disappointing at 82,000t and beans where net reductions of 92,000t were reported.
Much better new crop bean sales were reported, 0.3Mt, 264,000t to China mostly rolled from old crop.
To note new crop wheat sales were over half a million tons, including 260,000t to China.
Sorghum sales were zero with yet another unknown sale confirmed as China but nothing new seen.
Despite the water deficit also over a large part of Brazil, Conab is still showing some optimism about the future Brazilian harvest with 108.96 million tonnes of corn expected.
Soybean production is estimated at 135.54 million tonnes.
The Buenos Aires Stock Exchange, in contrast, forecast soybean production in Argentina is only 43 million tonnes, down sharply from previous estimates.
3.5% of soybean areas are estimated to be harvested to date, as are 12% of corn areas.
In this context, soybean prices moved only moderately higher on some technical buying primarily spurred by spillover strength from corn and wheat.
Wheat prices, on they part, grabbed big gains on the heels of some weather woes in both the U.S. and in Europe.
Stateside, overly dry conditions in the Northern Plains gave spring wheat contracts a boost, while frigid weather in Europe and the Black Sea region helped winter wheat prices trend higher.
On European market, fears arise in connection with climate adversity, as the severe frosts of recent days in France could have had an impact in particular on winter and spring barley, but also on plots of rapeseed and beetroot.
In deed, rapeseed prices rose sharply yesterday, also supported by an upward movement in canola in Canada, this time due to the water deficit at the time of sowing.
It is difficult at this stage to measure this impact exactly, but it illustrates the fragility of global balance sheets in a context where Chinese appetite is also expected to be sustained.
The vegetable oil market could be supported again this morning with the firmness of the palm in Kuala Lumpur.
Meantime, the return of international buyers gove some support to wheat prices.
From Black Sea basin, the entry into the second decade of April should mark the turning point expected by producers in the Black Sea basin in terms of weather.
The night frosts as recorded since the beginning of the week should subside and temperatures should in the coming days flirt with 20 ° C in the plains.
Thus, ist expect a rapid resumption of vegetative development.
In add, significant rains are expected over the Black Sea basin at the end of next week.
Aussie local markets continuing to pay some premiums for grain with the right logistics on the front end, but otherwise fairly quiet – still a question of freight and logistics domestically as they move into planting.
Weather maps have firmed slightly for the far SW of WA but otherwise the majority of the wheatbelt there still holding 15-20+ mm forecasts into the weekend.
On international trade scenario, Tunisia purchased 75,000 t of soft wheat at around US$260 C&F average price by EU trading houses with optional origins in an international tender that closed earlier yesterday.
The grain is for shipment between mid-May and late June.
Japan is looking to buy 2.9 million bushels of feed wheat and 4.6 million bushels of feed barley in a simultaneous buy-and-sell auction that will take place April 15.
The grain is for arrival by the end of September.
Meantime, Japan completed its regular tender to purchase 90,815 tonnes of food-quality wheat from the United States and Canada yesterday.
Nearly three-fourths (73%) of the total was sourced from the U.S.
The grain is for shipment in June.
Taiwanese flour mills have purchased over 96,000 t of milling wheat from the United States in a tender that closed earlier today.
The grain is for shipment in May and June.
Thailand has purchased 2.1 million bushels of animal feed wheat from optional origins in a tender that closed earlier today.
The grain is for shipment in June.
Saudi Arabia’s SAGO has made the next step in the gradual privatisation of its flour mills, announcing last night that the sale of another mill to a UAE based investment group was finalised.
Tonight we will see how the sessions will close.
