Good morning Farmer Family …
U.S. farm markets were mixed but mostly lower yesterday.
Corn price was down 0.29%.
Soybeans were up just 0.05% in the front month, but deferred contracts closed weaker.
Soymeal price was down 0.25%.
Bean oil, in contrast, was up 0.54%.
The wheat complex was mixed as Chicago SRW closed 0.52% higher, while Kansas City HRW was down 0.06% and Minneapolis spring wheat was the lagger, down 0.65%.
Corn and soybean prices eased as improved weather in parts of the U.S. Midwestern farm belt boosted harvest prospects.
Weekly Export Inspections data showed 555,620 MT of corn shipped in the week that ended on August 4.
That was down 38.63% from last week and a 31.94% drop from the same week last year.
Total shipments at 52.54 MMT, are down 17.8% from last year.
As for soybean, the report tallied soybean shipments at 867,504 MT.
That was well above the same week in 2021 and a 45.8% jump over the week prior.
China was the top destination at 249,869 MT, with Germany close behind at 237,810 MT.
However, with a 54,527 MMT year to date, total soybean shipments are still below to 58,475 MMT shipped at the same date, a year ago.
As for wheat, shipments were at 603,549 MT in the week that ended on August 4.
That was nearly double the week prior but down 7.7% from the same week in 2021.
Shipments through the first 2 months of the new MY at 3.5 MMT, are down 21.2% from last year.
Confirmation in the afternoon of some export sales kept a floor under prices, after that private exporters reported to the USDA the sale of 132,000 metric tons of soybeans for delivery to China during the 2022/2023 marketing year.
Private exporters also reported the sale of 105,000 metric tons of corn for delivery to Italy and the sale of 120,000 metric tons of corn for delivery to unknown destinations, both during the 2022/2023 marketing year.
Chicago wheat contract firmed, as the dollar softened, although gains were limited by improving prospects for exports from Ukraine and an increased forecast for Russian production.
Meantime, traders are squarring their positions, ahead of August WASDE report due on Friday.
In this context, commodity funds yesterday were net sellers of CBOT corn, soybean and soymeal futures contracts, and net buyers of wheat and soyoil.
Corn basis bids were mostly steady across the central U.S., but did shift 6 cents lower at an Iowa processor and 3 cents lower at an Illinois river terminal.
Soybean basis bids were mostly steady across the central U.S., but did show some volatility, after sinking 25 cents lower at an Illinois river terminal while firming 12 cents at an Ohio elevator.
After the sessions close, the USDA released its weekly Crop Progress report.
As of August 7, the USDA saw 90% of corn is silking.
That was slightly behind the five-year average of 93%.
USDA also said 45% of the U.S. corn crop has reached the dough stage, compared to the five-year average of 49%.
Six percent has reached the dented stage, compared with the five year average of 9%.
In the top 18 corn growing states, crop condition was rated 58% good/excellent, a 3% drop from last week.
Only 16% was rated poor/very poor, a 2% increase form last week.
As for soybean, USDA’s report noted 89% of the soybean crop has bloomed, just over the five-year average of 88%.
Soybeans setting pods are at 61% across the top 18 soybean growing states.
The five-year average for this point in the season is 66%.
Soybean crop condition was rated 59% good/excellent, a 1% drop from last week.
As for wheat, spring wheat is 9% harvested in the top six producing states, 10% behind the five year average.
Spring wheat crop condition was rated 64% good/excellent, a 6% drop from last week.
Only 8% was rated poor/very poor.
This week 86% of the winter wheat crop has been harvested, 5% behind the five year average.
Consequentially, on this morning Chicago corn climbed 1.5%.
Soybeans added 0.8%.
Wheat rose 0.8%.
However, it should to note that, although crop conditions in the western were trimmed across the board after a hot and mostly dry week, recent rains have bolstered prospects in the east.
In energy markets, crude oil and gasoline prices Monday rallied on support from weekend news that China’s crude oil imports in July rose to 37.33 million tons from June’s 4-year low as transportation activity improved.
However, China’s crude oil imports still fell -4% y/y.
Crude oil prices also gained support from a mildly weaker dollar and a bullish Goldman Sachs call, which said it remains bullish on oil prices due to the continued fall in global oil inventories and the lack of demand destruction at current levels.
In this context, Brent crude oil prices rallied by 1.82% to $96.65 per barrel.
U.S. West Texas Intermediate (WTI) crude rose by 1.97% to $90.76 per barrel.
On this morning, oil dropped over $1 a barrel, approaching a multi-month low hit last week, pressured by the latest progress in talks to revive the 2015 Iran nuclear accord, which would eventually allow Tehran to boost exports in a tight market.
The European Union on Monday put forward a “final” text to revive the deal.
A senior EU official said a final decision on the proposal, which needs U.S. and Iranian approval, was expected within “very, very few weeks”.
Thus, Brent crude 1fell $1.34, or 1.4%, to $95.31 a barrel at 08:15 GMT.
U.S. West Texas Intermediate (WTI) crude dropped $1.25, or 1.4%, to $89.51.
However, both Brent and WTI, reversed earlier losses, after reports Russia had suspended oil exports via the southern leg of the Druzhba pipeline.
In freight markets, the Baltic Exchange’s main sea freight index rose on Monday, snapping a 10-session losing streak, as capesize rates logged their best day in more than three weeks.
The overall index, indeed, was up for the first time since July 22, edging up 6 points, or 0.4%, to 1,566 points.
Particularly, the capesize index gained 54 points, or 3.8%, at 1,465 points, logging its first rise in 11 sessions and its best day since July 15.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were up $452 to $12,152.
The panamax index was down for the 10th straight session, shedding 9 points, or 0.5%, at 1,958 points.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $75 to $17,624.
The supramax index fell 29 points to 1,671 points, its lowest since Feb. 7.
In equity markets, on Monday, Wall Street closed mostly flat after blockbuster jobs data last week reinforced expectations the Federal Reserve will crack down on inflation, while a revenue warning from chipmaker Nvidia reminded investors of a slowing U.S. economy.
The S&P 500 slipped 0.1% to 4,140.06 and the Nasdaq shed 0.1% to 12,644.46.
The Dow Jones Industrial Average closed 0.1% higher, at 32,832.54.
The Russell 2000 rose 1% to 1,941.21.
Investors are now awaiting the consumer price data to gauge whether the Fed might ease slightly in its inflation fight and provide a better footing for the economy to grow.
Meantime, in Asian trading, on Tuesday Japan’s benchmark Nikkei 225 dipped nearly 0.9% to finish at 27,999.96.
Japan’s technology investor SoftBank Group Corp. dropped more than 7%.
On Monday it reported a record quarterly loss of $23 billion.
Australia’s S&P/ASX 200 edged up 0.1% to 7,029.80.
South Korea’s Kospi edged 0.4% higher to 2,503.46.
Hong Kong’s Hang Seng erased earlier gains, falling 0.2% to 20,003.44, while the Shanghai Composite edged up 0.3% to 3,247.43.
Analysts monitoring Asian markets said regional tensions remain a risk because of the flareup between China and Taiwan after the recent visit of U.S. House Speak Nancy Pelosi to Taiwan.
China has said it’s extending threatening military exercises surrounding Taiwan, disrupting shipping and air traffic and raising up a notch worries about trade.
In currency trading, the dollar held just below its recent top, with traders wary of a surprise that could heap more upward pressure on interest rates.
Against a basket of currencies , the dollar was down a fraction at 106.14.
Particularly, the U.S. dollar fell to 134.90 Japanese yen from 134.98 yen.
The euro cost $1.0239, inching up from $1.0193.
From Canada, the country exported 421,2k mt of common wheat in the final shipping week (n 52) of the season.
That represent a 6.74% increase from prior week, for a year-to-date total of 11.520 MMT, compared to 19.628 MMT last year, which is 59% (-8.1 million mt) of last year’s number.
It should to note, that visible supplies have been shrinking, but there are still 1.8 million mt of wheat stocks in Canadian elevators and ports that will be exported/milled in the 2022/23 season.
As for durum, exports for week 52 were at 81,4k mt, vs 60,7k mt a week earlier.
That was up 34.1% week on week, for a year-to-date total of 2,633 MMT, compared to 6,06 MMT last year-to-date.
Commercial visible supplies, thus are at 445,9k mt.
However, there are still farmers who have not finished selling old-crop supplies.
From South America, Brazilian corn-based ethanol producers in Mato Grosso state are not expected to have problems sourcing the raw material even if China starts buying corn from Brazil this year, farmer-backed research group Imea said on Monday.
Mato Grosso producers have placed corn orders in advance.
While the farmer group does not anticipate supply issues after China and Brazil agreed on a trade protocol to export corn, corn demand from the Asian country may change Mato Grosso’s price outlook going forward.
Brazilian corn ethanol production in the 2022/23 harvest, which started in April, should reach 4.5 billion liters, an increase of 31% compared with the previous season, according to Unem.
Most of Brazil’s supplies of corn ethanol will come from Mato Grosso.
Meantime, Brazil plan to boost internal fertilizer supplies.
Around 85% of the fertilizers used in Brazil come from imports, and the government aims to reduce that to about 45% by 2050.
However, that cannot succeed without infrastructure investments, a government official said, as after buying record volumes of fertilizer in the first seven months of the year, it’s estimated the country paied $2 billion in demurrage rates, becouse containers have been left at the port for a longer time than expected.
Also, internal logistical bottlenecks are hampering domestic fertilizer deliveries, thus farmers are worried about rising costs.
In Europe, grain prices experienced a very hesitant session yesterday.
The wheat market on Euronext, saw September contract recording an amplitude of variation of around €9/t, between the highest and the lowest traded during the day.
However, it marked only a slight decline at the end of the day.
Climatic conditions in France remain a source of major concern for corn crops, especially since a new heat wave is likely to hit the country in the coming days.
Restrictions decided on irrigation risk further deteriorating the state of crops.
On this wake, faced with less favorable production prospects in Europe this year, the USDA yesterday confirmed Italy bought 105,000 t of corn to for delivery in the 2022/2023 season.
Meantime the increase in shipments from the Black Sea and new high prospects for wheat production in Russia, weighed on European grain prices.
As for rapeseed, prices changed little yesterday.
In its August report, Agreste revised the 2022 winter rapeseed production upwards thanks to the joint increase in surface area and yield.
Indeed, “the areas would exceed 1.2 Mha, i.e. 236,000 ha more than in 2021.
And the yield, estimated at 35.7 q/ha, would also be up over one year (+2.1 q/ ha)”.
From the Black Sea basin, two more grain-carrying ships left Ukraine‘s Chornomorsk port on this morning, bringing the total to leave the country to 12.
Particularly, the Ocean Lion left for South Korea, carrying 64,720 tonnes of corn, while the Rahmi Yagci was carrying 5,300 tonnes of sunflower meal to Istanbul.
Four ships that left Ukraine on Sunday are anchored near Istanbul and will be inspected today.
Ships exporting Ukraine grain through the Black Sea will be protected by a 10 nautical mile buffer zone, according to long-awaited procedures agreed by Russia, Ukraine, Turkey and the United Nations on Monday.
Ukraine hopes to export 20 million tonnes of grain in silos and 40 million from its new harvest, the country’s economic adviser Oleh Ustenko said in July.
The government hopes to earn $10 billion for its shattered economy from those volumes.
However, according to APK-Inform, the indicative prices of major Ukraine grains remained quite stable on FOB market last week, however, they eased by the end of the reporting period.
Particularly, the indicative offer prices of 12.5%, 11.5% and feed wheat, declined to 350-370, 345-365, 315-335 USD/t FOB Black Sea (August-September), barley – to 310-325 USD/t FOB, corn – 320-335 USD/t FOB.
On the other hand, UkrAgroConsult lowered its estimate of Ukraine’s wheat production estimate to 18.5 million tonnes (Mt), down from 20Mt, with harvest two thirds complete.
Yields are lower than last year due to dry weather from May through to July.
From Russia, IKAR increased their country’s 2022 wheat production estimate by 4.5 MMT to 95 MMT, mainly due to higher yields in the Central and Volga regions.
Its forecast for the barley crop was raised to 21.5 million tonnes from 20 million tonnes, IKAR added in a note.
Russia’s southern region of Krasnodar has harvested a slightly bigger winter grains crop than the record high achieved last year, the regional agriculture ministry said on Monday.
Particularly, farmers in the Krasnodar region harvested 12.4 million tonnes of winter grains by bunker weight before drying and cleaning, including 10.7 million tonnes of winter wheat.
Meantime, per latest port data, Russia exported 780,000 tonnes of grain last week.
That was up compared with 650,000 tonnes the previous week.
Russian wheat export prices fell last week.
Russian prices for wheat with 12.5% protein content and for supply from Black Sea ports, indeed, fell by $3 to $355 a tonne free on board (FOB) at the end of last week.
In the domestic market too, prices for food wheat fell in the southern part of the country.
While prices for low-quality wheat, fell sharply as supply rises sharply.
From South East Asia, Indonesia on Tuesday lowered its threshold for applying export tax on crude palm oil to a reference price of $680 per tonne, down from $750 per tonne previously, according to a finance ministry regulation.
The lowering of the threshold took effect on Tuesday.
The export tax goes up for every $50 price increase in the reference prices, which are set periodically by the trade ministry.
Indonesia’s customs office said the changes brought up the current export tax for crude palm oil to $52 per tonne from the previous $33 per tonne, with the reference price currently set at $872.27 per tonne, it said in a separate statement.
India could scrap a 40% duty on wheat imports and cap the amount of stocks traders can hold to try to dampen record high domestic prices.
If the government does remove the duty, and international prices also fall, then traders say they could start importing, especially during the upcoming festival season, when higher demand typically drives domestic prices higher.
From Australia, new crop and current crop cereals markets saw limited activity on Monday and price changes were minimal.
New crop canola bids were stronger by A$5-7/t
On the weather side, the 8-day rainfall forecast is for 5-25mm across southern Qld, 10-50mm across NSW with the heavier totals in the east, 10-50mm for Vic with heavier falls expected in southeastern parts of the state.
SA is forecast to receive 5-25mm and WA cropping regions 10-25mm.
On international trade scene, importers in the Philippines are tendering to purchase a total of around 120,000 tonnes of wheat and about 120,000 tonnes of animal feed barley.
The deadline for submissions of price offers in the tender is Wednesday, Aug. 10.
The tender seeks a series of consignments for shipment between October 2022 and January 2023.
The group had rejected all offers and made no purchase in a tender for wheat and barley last week.
That’s all, thank you.
To all of you, we wish you a good day and… Good Harvest 2022!
Author: Sandro F. Puglisi
