Good morning Farmer Family …
US farm markets suffered a setback yesterday that left corn, soybeans, soymeal and wheats in the red.
The wheat complex was the most hammered as incurred in losses, spilling 1.94% to 2.55% lower amid a strengthening U.S. Dollar, lackluster domestic exports and an uptick in Black Sea shipments.
Harvest pressure pushed corn and soybeans lower, with corn prices fell nearly 1.25%, while soybeans were down around 0.85%.
Meal prices were down by 1.28% on the day as well.
Bean oil, in contrast, was the complex outlier, as prices went home with 0.73% gains.
Weekly Export Sales data showed 227,045 MT of corn bookings from the week that ended 9/29.
That was down 56% from the prior week and was below estimates.
Mexico was the top buyer with 147k MT.
The week’s shipments were 645k MT for a season total of 2.246 MMT.
Total 22/23 corn commitments sit at half of last year’s pace with 13.22 MMT on the books.
As for soybean, the report had 777k MT of soybean sales.
That was down 23% wk/wk and was at the lower end of the expected range.
Mexico was the top buyer with 233k MT, followed by 157k MT from China.
Soybean exports were listed at 617k MT for the week, bringing the MY total export to 1.83 MMT.
Total soybean commitments for the 22/23 campaign were 27.5 MMT, a 4.5% lead over last year’s pace.
For the products, FAS reported net reductions for 21/22 meal, with Canada’s 15.7k MT purchase more than offset by Vietnam’s 48k MT cancelation.
NMY meal sales were 139k MT for the week that ended 9/29, mainly by Vietnam (48k MT).
In bean oil, the report showed 900 MT were sold to Canada and 1000 MT were shipped to Canada.
As for wheat, data showed 229,400 MT of wheat was sold during the week that ended 9/29.
That was down from 280k MT last week and was near the bottom of the expected range going into the report.
The Philippines and Taiwan were the top buyers, though neither booked +100k MT.
The week’s shipment was listed as 630k MT, setting the season’s total at 7.757 MMT.
That is now 0.06% ahead of last year’s pace.
By class, the weekly report showed 43% of the week’s booking was spring wheat, and 1/4 was each HRW and white.
Through the first 18 weeks of the season, spring wheat holds a 29% share of the total wheat commitment, HRW has a 28% share, white is at 22% and SRW is at 19%.
In this context, corn basis bids were mostly steady across the central U.S. on Thursday but did see some movements in either direction, including a 13-cent drop at an Illinois river terminal and a 6-cent gain at an Illinois ethanol plant.
Soybean basis bids were steady to mixed after trending 2 cents higher at an Illinois river terminal while dropping 2 to 5 cents lower at two other Midwestern locations.
Commodity funds were net sellers of CBOT corn, wheat, soybean and soymeal futures contracts on Thursday.
They were net buyers of soyoil futures.
On this morning, Chicago soybeans ticked higher, although the market stayed on track for a third weekly decline, weighed down by slowing purchases from top importer China and expectations of record production in Brazil.
Wheat prices rose on concerns over output in Russia and Ukraine, although the market is poised for its first drop in three weeks.
The most-active soybean contract on the Chicago Board of Trade, indeed, was up 0.1% at $13.59-1/2 a bushel, as of 02:44 GMT, bringing the losses in the past three weeks to more than 6%.
Wheat is down almost 4% this week, while corn slid around half-a-percent in the same period.
Attention is turning to next week’s U.S. Department of Agriculture (USDA) October crop forecasts for a gauge of harvest yields after a dry summer.
Demand for U.S. corn and soybeans typically surges during harvest but low water on southern sections of the Mississippi River halted most shipping traffic, sending prices for barges soaring.
In energy markets, on this morning benchmark U.S. crude rose 2 cents to $88.47 per barrel in electronic trading on the New York Mercantile Exchange.
The contract advanced 69 cents on Thursday to $88.45.
Brent crude, the price basis for trading international oils, shed 4 cents to $94.38 per barrel in London.
It rose $1.05 the previous session to $94.42.
In ocean freight markets, the Baltic Dry index, which measures the cost of shipping goods worldwide, fell by 0.2% to 1,992 points on Thursday, after four consecutive sessions of gains that sent the index to the highest in 10 weeks.
Particularly, the capesize index, which tracks iron ore and coal cargos of 150,000 tonnes, halted its four-session winning streak, declining by 1.8% to 2,506 points.
“A declining Pacific market set the negative tone for the capesize index against a healthier Atlantic activity for both transatlantic and fronthaul trips,” wrote Intermodal.
Meanwhile, the panamax index, which tracks about 60,000 to 70,000 tonnes of coal and grains cargoes, rose about 1.2% to 2,232 points, its highest since July 7th; and the supramax index added 14 points to 1,690 points.
In equity markets, the S&P 500 fell 1% to 3,744.52.
The index is up 4.4% for the week following its best two-day rally in 2 1/2 years.
The Dow Jones Industrial Average lost 1.1% to 29,926.94.
The Nasdaq composite slid 0.7% to 11,073.31.
The yield on U.S. government debt, widened.
That indicates traders expect more rate hikes.
The yield on the 10-year Treasury, which helps set rates for mortgages, rose to 3.81% from 3.75% late Wednesday.
The yield on the two-year Treasury rose to 4.22% from 4.14% late Monday.
U.S weekly initial unemployment claims rose +29,000 to a 5-week high of 219,000, showing a weaker labor market than expectations of 204,000.
Meantime, forecasters expect the government to report the economy added 250,000 jobs last month, well below the past year’s monthly average of 487,000 but still a strong number despite inflation and two straight quarters of U.S. economic contraction .
Meantime, Asian shares followed Wall Street lower Friday.
Tokyo and Hong Kong, the region’s biggest markets, retreated. Chinese markets were closed for a holiday.
Particularly, the Nikkei 225 in Tokyo sank 0.6% to 27,149.75 and Hong Kong’s Hang Seng tumbled 1% to 17,823.29.
The Kospi in Seoul gained 0.2% to 2,241.87 while Sydney’s S&P ASX 200 shed 0.6% to 6,777.00.
New Zealand lost 0.2% while Singapore and Bangkok advanced.
In currency trading, the dollar declined to 144.92 yen from Thursday’s 145.07 yen.
The euro gained to 98.11 cents from 97.94 cents.
From South America, Brazil’s 2022/2023 total corn crop could reach 126.941 million tonnes, up 12.5% from 112.805 million tonnes in the previous cycle, the agricultural agency CONAB said.
Brazilian farmers are expected to plant 14.6% more first-crop corn and 12.4% more second-crop corn in 2022/2023, CONAB said.
Brazil’s 2022/2023 soybean crop could reach 152.352 million tonnes, up 21.3% from 125.550 million tonnes produced in the previous cycle, CONAB also said.
Brazil’s 2022/2023 soybean area is expected to grow 3.4% to 42.892 million hectares, CONAB said.
Meantime, Brazil grain exporters’ association ANEC sees October corn exports at 4.2Mt, up from 1.9Mt last year, also noting exports could reach 5.5Mt.
Soybean exports are seen at 3.1Mt, up from just under 3Mt in October 2021.
In Europe, we saw a general decline in European grain prices yesterday in a context of fears of a global economic recession resulting in a contraction in demand.
The downtrend in corn, however, was limited by another rapid slide in the eurodollar parity and returns to yields in France, which are still very as worrying.
Rapeseed prices were once again losing ground, probably on profit taking after the recent increases, while the energy context remains tense.
Also, canola harvest weighed on European rapeseeds, as harvesting sites in Canada are ending before the onset of severe cold weather.
Meantime, many operators are at the European Stock Exchange in Valencia this week.
From the Black Sea basin, Ukraine’s winter grain sowing area for the 2023 harvest is unlikely to exceed 2 million hectares.
Sowing is hampered both by the rains and by the lack of seeds and finances, leading to a very significant drop in production for next year, close to 50% of a so-called year normal.
On the other hand, Russian Ag Ministry has warned of declines in 2023 winter grain planting in Russia, due to low soil moisture in southern crop areas.
Farmers there accelerated planting last week but the overall pace continues to lag last season.
Meanwhile, inspection of vessels in the export corridor has slowed substantially since late September according to Black Sea market analyst SovEcon.
In August and the first half of September, the vessels typically were passing the inspection in Bosphorus within 5-6 days after leaving the Odesa terminals.
In late September number of days started to rise sharply, reaching typically 10-15 days.
From Australia, local new crop wheat markets continued to gain a little more strength yesterday.
Themes in the market have not changed with the sentiment all around weather and quality.
The impact of rain and cool weather will further delay the start of harvest and makes accessing grain difficult at many sites.
The more rain we receive the less likely we will see large volumes of high protein wheat.
In NSW particularly, the prospects of anything above APW is becoming less likely in many regions unless the weather turns hot and dry.
Unfortunately, the forecast does not point to this happening in the short term.
On the international trade scene, Japan bought just under 100,000 t of milling wheat from the USA and Canada.
The FAO is also purchasing 100,000 t of milling wheat as part of its food aid programme.
Jordan’s state grains buyer reportedly made no barley purchase at its 5 October tender for 120,000t feed barley and has scheduled a new event (12 Oct) for an equivalent volume, for Mar-Apr shipment.
That’s all, thank you.
We wish you a good day.
Author: Sandro F. Puglisi
