Grain markets started the week off on the wrong foot as both corn, soybeans and wheat all losing around 1.5% yesterday.
Corn prices, faded on a round of fund selling, with planting pressure applying additional headwinds.
Soybean prices followed corn prices lower on a round of long liquidation from investment funds.
Wheat prices fell on worries over export demand, amid an improving Russian crop after the country’s IKAR consultancy upped its 2021 production forecasts to 81 MMT.
And that, triggered a round of technical selling that pushed most contracts down around 1.5%.
Spillover weakness from corn and soybeans caused additional headwinds.
Energy futures were mixed, as crude oil firmed 0.5%.
Gasoline was also up around 0.2%.
Diesel, in contrast, has had small cuts.
On the financial market, investors remain watchful for a bevy of first-quarter corporate earnings report to be released later this week.
The Biden administration submitted its priorities for 2022 spending, which includes a USDA budget of $27.8 billion.
That would represent a 16% increase from this year if everything goes to plan.
Additional funds would increase rural broadband access and more.
Meantime, on Wall Str., the Dow retreated off record highs captured late last week, dropping 55 points to close at 33,745, and the U.S. Dollar softened fractionally, though the S&P did hit new highs mid-day.
The USD index is holding mostly steady around 92.1, despite US fed figures out last night reported large increases in price indices for housing, rent, and fuel prices.
Fed officials, indeed, have been downplaying the risk of inflation in their comments in recent weeks.
Going back on the grain markets, dry forecasts for the central U.S. brought some planting pressure into the mix.
Later this week will bring a mix of wet and dry weather.
The agency’s 8-to-14-day outlook, indeed, predicts widespread seasonally dry weather for the central U.S. between April 19 and April 25, with cooler-than-normal conditions likely for the eastern half of the U.S. next week.
This dry weather currently raging in the north of the country certainly affects spring wheat crops, but on the contrary allows an advance in the estimated sowings of maize achieved at 4% last Sunday, compared to 3% to date on average. over the past 5 years.
Spring wheat sowing is estimated at 11% against 6% on average to date.
Regular US weekly crop conditions had national winter wheat rated 53pc% good-to-excellent, unchanged from previous week, corn planting at 4pc, versus 3pc avg. and spring wheat planting at 11pc vs. 6pc avg.
Next week’s report will be the first national estimate for the year on bean planting pace.
Updated export inspections were all about as expected, 1.6Mt corn, 0.45Mt wheat, 0.3Mt beans and 0.199Mt sorghum/milo almost entirely Chinese business, with a few boxes to Japan.
Consequently, corn export inspections fell 27% from a week ago.
Soybean export inspections took another step back.
Wheat export inspections saw a moderate week-over-week decline.
Little has changed on the South American weather maps, with southern Brazil continuing to swing towards the drier side as safrinha crops push forward in growth.
On European market, grain prices changed little yesterday, still divided between end-of-season activity which is slowing down and the outlook for the 2021 harvest balance sheets still suspended in the weather conditions to come.
SovEcon further supported the wheat lower trend by increasing its Russian harvest estimate this year from 1.4 Mt to 80.7 Mt (85 Mt last year).
A slowdown in business over the coming weeks is also anticipated by operators, as start of Ramadan from this morning.
Corn was also on the decline despite a return of buyers to the intra-community market and still very low imports.
In rapeseed, some plots could also have been impacted by frost, especially since the vegetative state of this crop is globally unsatisfactory once again this year.
Consequently, the French and European rapeseed balance sheet, will again be in great deficit next year, thus supporting prices, unless Canada manages to sow large areas of canola and obtain high yields, a double condition that does not seem to be established for the moment.
However, new season rapeseed prices remained slightly in the green on yesterday evening in the face of uncertainties in French production this year.
The oil market, indeed, was further pulled down after the MPOB (Malaysian Palm Oil Board) announced a rebound in Malaysian palm stocks last month, to 1.45 Mt, the highest since November 2020.
European Union corn imports for the 2020/21 marketing year have reached 11.97 million tonnes through April 11, per the latest data from the European Commission.
That’s 27% below last year’s pace so far.
European Union soybean imports for the 2020/21 marketing year are at 422.6 million bushels through April 11, trending slightly above last year’s pace so far.
Rapeseed / canola imports, on the other hand, remain very dynamic (5.3 Mt since the start of the season) and are now clearly exceeding the record rate set last year (5.1 Mt), while EU soymeal imports down moderately from a year ago.
European Union soft wheat exports for the 2020/21 marketing year have reached 20.81 million tonnes through April 11, trailing last year’s pace by 24.5% so far.
EU barley exports this marketing year are fractionally above last year’s pace, with 6.10 million tonnes.
From Black Sea basin, for more than 2 weeks now, Russia has been engaged in large-scale military troop movements in order to strengthen its presence on the outskirts of the Ukrainian borders.
The international community represented by the G7 foreign ministers calls on Moscow to cease its provocations and to engage in de-escalation at the borders.
President Zelensky wishes to meet Emmanuel Macron this week, who along with German Chancellor Angela Merkel is the conflict mediator.
Planting delays on some spring crops are being reported in parts of the EU/Black Sea region after the recent cold snap, raising questions about acreage shifts as ideal planting windows start to slowly tick by.
Meantime, improved Russian whinter crop condition, and IKAR upped its 2021 production forecasts to 81 MMT.
Aussie markets continue very quiet locally, with a little strength being reported in some positions but overall volume very light as we move into planting.
Logistics remaining in focus across the east coast.
Wheather maps still call for a fairly dry week nationally and extended run maps are not much different into the end of the month.
On the international scene, it should be noted that the USA sold 132,000 t of soybeans to China and 110,000 t to Bangladesh.
Once again, China has offered a large amount of wheat for domestic users at auction earlier today.
The latest sale was for 18.9 million bushels, or 12.8% of the total amount on offer.
The country has been drawing down its state wheat reserves to help local feed users deal with rising corn prices.
Six large wheat auctions have been held since the beginning of March.
Algeria issued an international tender to purchase 1.8 million bushels of durum wheat from optional origins that closes Wednesday.
Algeria often purchases more grain than the nominal amount listed on these types of tenders.
Tonight we will see how the sessions close.
