Good afternoon Farmer Family …
US farm markets weakened yesterday!
Corn prices were trimmed by 0.4%, while soybeans sank around 1.7% lower.
Meal prices also weakened, going home with 2.2% losses.
Bean oil ended the day mixed but mostly higher with a 0.52% gain for December.
The wheat market closed with variable losses.
Chicago wheat prices dropped by 1.41%.
Kansas City wheat prices settled 1.08% down.
Minneapolis spirng wheat were down by 0.39%.
Weekly Export Inspections showed 470,623 MT of corn shipments for the week that ended 10/20.
That was up from 460k MT last week but under the 643,864 MT shipped during the same week last year.
The report showed 73.5% of the week’s corn exports left via the Mississippi River.
Accumulated inspections reached 3.768 MMT (148.3 mbu) as of 10/20, down 22% from last year.
As for soybean, the report showed 2.889 MMT of soybeans were shipped during the week that ended 10/20.
That was 12.5% above the same week last year and was 32% higher than the 5-yr average for the week.
Shipments from the Mississippi River were 1.277 MMT, compared to 1.22 MMT shipped out of the PNW.
China was the destination for 3/4 of the total.
The USDA also added 42.4k MT to recent reports, taking the season’s accumulated export total to 7.6 MMT as of 10/20.
That is down from 8.6 MMT at the same point last year.
As for wheat, data had 125,582 MT of wheat exports for the week of 10/20.
That was down 46% wk/wk and was down by 36% compared to the same week last year.
HRS was the top variety for the week’s total with 51.5k MT, each SRW, HRW, and white had 20-30k MT.
The season’s accumulated wheat shipments reached 9.491 MMT, now trailing last year’s pace by 45,671 MT.
Meantime, harvest progress continues to replenish low corn and soybean stocks.
After the sessions close, indeed, USDA’s new crop progress report, covering the week through October 23, showed the 2022 soybean harvest continues to outpace corn’s progress so far.
Both crops are enjoying progress that has been much faster than their respective five-year averages.
USDA also provided additional crop data on a bevy of other crops in yesterday’s report.
Nearly all (97%) of this year’s corn crop is fully mature, up from 94% last week and matching the prior five-year average.
Harvest progress moved from 45% a week ago up to 61% through Sunday.
That’s modestly behind 2021’s pace of 64% but still well ahead of the prior five-year average of 52%.
With harvest past the halfway mark for both corn and soybeans, USDA won’t be providing additional quality ratings updates.
Last week, the agency noted that 53% of the corn crop was rated in good-to-excellent condition, and 57% of the soybean crop was rated in good-to-excellent condition.
Meantime, this year’s soybean harvest moved from 63% last week up to 80% through Sunday.
That puts the 2022 harvest well ahead of last year’s pace of 71% and the prior five-year average of 67%.
On the other hand, winter wheat planting progress moved from 69% a week ago up to 79% through October 23.
That was a bit slower than analysts were anticipating, with an average trade guess of 81%.
However, that puts the 2022/23 crop only slightly behind last year’s pace, but identical to the prior five-year average.
On the weather side, bountiful rains will arrive in parts of the Midwest later this week, with a band stretching from southwest Arkansas to northeast Illinois likely to see at least 1.5” or more fall between today and Friday.
The NOAA’s 8-to-14-day outlook predicts more seasonally wet weather for the central U.S. between October 31 and November 6, with warmer-than-normal conditions likely for the Midwest and Plains next week.
In this context, corn basis bids dropped 10 cents at an Illinois river while firming 2 to 5 cents at three other Midwestern locations and holding steady elsewhere across the central U.S..
Soybean basis bids improved 5 to 10 cents at two Midwestern processors and eased a penny lower at an Ohio elevator while holding steady elsewhere across the central U.S..
Commodity funds were net sellers of CBOT wheat, corn, soybean and soymeal futures contracts,and net buyers of soyoil futures.
On this morning, Chicago soybean prices edged higher as strong demand led by top importer China underpinned the market, but a rapidly progressing U.S. harvest curbed gains.
Wheat also rose, while corn weakened.
Particularly, the most-active soybean contract on the Chicago Board of Trade (CBOT) added 0.2% to $13.84-1/4 a bushel, as of 03:55 GMT and wheat rose 0.1% to $8.39-1/4 a bushel.
Meanwhile, corn was flat at $6.81-1/2 a bushel.
In energy markets, oil prices fell by more than $1 per barrel on this morning as bearish economic data from key global economies heightened demand fears.
International benchmark Brent crude futures indeed fell by $1.14 to $92.12 per barrel by 09:23 GMT, after easing 0.3% in the previous session.
U.S. West Texas Intermediate crude futures for December delivery fell by $1.01 to $83.57 per barrel, after a previous decline of 0.6%.
Signs of uncertain economic activity in the United States and China, continued to weigh on oil prices.
Government data on Monday showed China’s crude oil imports in September were 2% lower than a year earlier, continuing a trend of lower imports at the same time it reported slowing retail sales.
Business activity also contracted in the manufacturing sectors in the euro zone and the United Kingdom.
U.S. crude oil inventories are also expected to rise this week, which may limit price gains.
Analysts estimated on average that crude inventories rose by 200,000 barrels in the week to Oct. 21.
Separately, International Energy Agency head Fatih Birol said the world will still need Russian oil to flow to the market despite a price cap, with between 80% to 90% an “encouraging level” to meet demand.
Also, “many details of a price cap on Russian oil still have to be ironed out”, Birol added.
In ocean freight markets, the Baltic Exchange’s dry bulk sea freight index dropped to its lowest since early October, weighed down by a dip in rates across vessel segments led by the larger capesizes.
The overall index, in deed, fell 22 points, or about 1.2%, to a 3-week low of 1,797.
Particularly, the capesize index lost 35 points, or about 1.7%, to 2,036, also a three-week low.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as coal and steel-making ingredient iron ore used in construction, fell $292 to $16,883.
The panamax index lost 31 points, or about 1.5%, to 2,113.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, dropped $274 to $19,019.
The supramax index fell by 8 points to 1,670.
In equity markets, on Wall Street, stocks yesterday extended gains from last week.
Particularly, the S&P 500 rose 1.2% to 3,797.34.
The Dow Jones Industrial Average rose 1.3% to 31,499.62, and the tech-heavy Nasdaq composite closed 0.9% higher, at 10,952.61.
Small company stocks also rose.
The Russell 2000 index climbed 0.4% to 1,748.40.
Investors are closely reviewing the latest round of corporate earnings to get a better picture of inflation’s impact on different areas of the economy.
Prices on everything from clothing to food remain at their highest levels in four decades.
That has put pressure on companies to raise prices and cut costs, while squeezing consumers.
Meantime, investors geared up for a heavy week of earnings from big technology companies.
Also Monday, U.K. government bonds rallied as Treasury chief Rishi Sunak became assured of becoming the prime minster, replacing Liz Truss, who quit last week after her tax-cutting economic package caused turmoil in financial markets.
On this morning, shares advanced in Asia.
Hong Kong’s benchmark Hang Seng gained 0.9% to 15,313.22 after a 6.4% selloff the day before that took it to its lowest close in 14 years.
The Shanghai Composite index rose 0.7%, to 2,999.55.
The nosedive in Chinese stocks on Monday followed the conclusion of a Communist Party congress in Beijing where leader Xi Jinping gave himself an unprecedented third five-year term and installed key allies as top ruling party leaders, vanquishing officials viewed as pro-market reformers.
In other Asian trading, Tokyo’s Nikkei 225 index rose 1.2% to 27,301.50 while the Kospi in Seoul added 0.3% to 2,242.42.
Australia’s S&P/ASX 200 gained 0.3% to 6,799.50.
Taiwan’s benchmark fell 1.2%, while India’s Sensex edged 0.2% higher.
In currency trading, the dollar fell to 148.88 Japanese yen from 148.94 yen.
The euro rose to 98.81 cents from 98.75 cents.
From Canada, in their final crop report for the year, Saskatchewan Agriculture left spring wheat yields at 44 bu/acre, which implies a 9.6 million mt spring wheat crop for Saskatchewan.
The latest yields by Alberta Agriculture were at a 52.9 bu average for Alberta, slightly lower than the 53 bu average shown earlier.
The provincial yields get us to a Canadian spring wheat production of 24.2 million mt, compared with the StatsCan number of 25.6 million mt.
As for durum, Saskatchewan Agriculture left durum wheat yields unchanged from previously at 31 bu/acre, which implies a 4.4 million mt durum crop for Saskatchewan.
For Alberta, analysts had a 42 bu/ac long-term average yield (excluding 2021).
And for Manitoba, analysts had a 55 bu/ac long term average (excluding 2021).
Thgus, the provincial yields get us to a Canadian durum production of 5.6 million mt, compared with the StatsCan number of 6.1 million mt.
Meantime, Agriculture and Agri-Food Canada (AAFC) have revised 2022 wheat exports 100,000t higher this month to 23.3Mt (drought cut the quantity to 15.1Mt previous year), with closing stocks trimmed by 100,000t, to 6.2Mt (3.7Mt previous year).
From South America, the planting of Brazil’s 2022/2023 soy crop reached 34% of the estimated area, against 24% in the previous week and 38% in the same period last year, according to a survey by AgRural.
Brazilian farmers are also sowing their first corn.
AgRural estimates 51% of Brazil’s center-south fields have been planted already, compared with 53% in the same period of 2021.
Meantime, Safras and Mercado estimated the Brazilian 1st crop corn output as 25.2 MMT.
That is mainly due to yield improvements, as the 15% larger yr/yr crop comes on 4.3% lighter area.
Safras has the initial 2nd crop forecasted at 87.8 MMT, up from 84.4 MMT last year, and the full output as 126.3 MMT.
Argentina like Brazil, is also currently receiving significant water supplies after months of drought that are particularly detrimental to national crops.
In Europe, the European Union’s crop monitoring service MARS on Monday reduced further its forecast for this year’s drought-affected EU maize harvest, but pointed to mostly favourable sowing conditions for winter cereals.
Particularly, the service reduced its forecast for the average yield in this year’s EU’s grain maize crop to 6.34 tonnes per hectare (t/ha) from 6.39 t/ha expected in September.
The downward revision, which followed a steeper cut last month, put MARS’ yield forecast for the drought-affected maize harvest 19% below the average of the previous five years.
From Russia, Russian wheat prices fell last week.
According to the IKAR, indeed, Russian prices for wheat with 12.5% protein content and for supply from Black Sea ports were at $312 per tonne free on board (FOB) at the end of last week, down $11 from a week earlier.
Price for domestic 3rd class wheat, European part of Russia, excludes delivery was at 12,675 rbls/t ($207.3) -250 rbls (Sovecon).
In this context, Russia’s grain exports rose to 1.06 million tonnes last week from 910,000 tonnes a week earlier, per latest port data.
Consequentially, Russian consultancy Sovecon estimates that the country will export 4.5 MMT of wheat in October, which would be a monthly increase of 9.8%, if realized.
It would also be the highest monthly tally in over a year.
Meantime, farmers have already planted winter grains on 14.9 million hectares compared to 15.3 million hectares around the same date a year ago.
On the other hand, harvesting of sunflower seeds is being affected by excessive rains in Russia’s central and Volga regions.
Consequentially, IKAR lowered its forecast for the sunseed crop to 16.35 million tonnes from 16.95 million tonnes.
In this context, export price for sunflower oil was at $1,290/t +$50 according to Sovecon.
Export price for sunflower oil was at $1,170/t +$20 according to the IKAR.
In contrast, price for sunflower seeds was weaker at 21,450 rbls/t -225 rbls (Sovecon).
Price for domestic sunflower oil was unchanged at 72,675 rbls/t (Sovecon).
Price for domestic soybeans was at 29,900 rbls/t -425 rbls (Sovecon).
Price for white sugar, Russia’s south was at $796.8/t +$17 (IKAR).
($1 = 61.1440 roubles).
From Ukraine, the grains market is closely watching the pace of crop exports from Ukraine’s Black Sea ports ahead of the expiration next month of a wartime shipping corridor deal.
A U.N spokesperson said on Monday that “urgent” steps are needed to relieve a backlog of more than 150 ships involved in a deal, which allows Ukraine to export grain from ports in the Black Sea.
The comments come as Kyiv accused Russia of blocking full implementation of the agreement.
“Russia is deliberately blocking the full realisation of the Grain Initiative,” Ukraine’s Infrastructure Ministry said.
“As a result, these (Ukrainian) ports in the last few days are working only at 25pc to 30pc of their capacity,” it reported.
Russia has threatened to pull out over its own complaints.
Russia has reportedly asked for more data from the UN on the grain deal, insisting the grain is not going to the poorest countries and that Russian exports are limited.
Russia’s Foreign Minister Sergey Lavrov has said a lot of issues need to be resolved before the expiry of the deal.
From the Middle Kingdom, Chinese Customs data showed 1.53 MMT of corn was brought in during September, that was a 56% reduction from Sep ’21.
Their YTD corn imports reached 18.46 MMT through September, trailing 2021 by 26%.
The data also had 920k MT of sorghum, a 42% increase yr/yr, for a YTD total of 8.93 MMT.
China reported 7.72 MMT of soybeans were brought in during September.
That compares to 7.17 MMT in August and 6.88 MMT during Sep ’21.
YTD China has imported 69.04 MMT of soybeans, a 6.6% lighter volume than last year.
Chinese Customs data showed 370,00 MT of wheat was imported during September.
That was a 42% drop from Sep ’21.
Through September, China’s 2022 wheat imports were 6.62 MMT.
From Australia, market activity in eastern Australia was minimal on Monday but in WA growers are bringing grain to market as harvest slowly gets underway.
Quality downgrades and considerable yield losses are expected across New South Wales and Victoria as floodwater spreads across major growing regions of both states.
Logistics will continue to be a major headache with road closures and significant damage to roads caused by flood water.
The Sturt, Newell and Kamilaroi highways are currently closed in multiple locations in NSW and there are multiple road closures due to flooding across southern Qld and Vic.
On the international trade scene, Saudi Arabia’s SAGO purchased 566,000t milling wheat at average price of 384.75 usd cfr, in an international tender on Friday for Mar-Apr shipment.
Thailand Traders seek 180,000t feed wheat from optional origins, for Feb-Apr shipment.
Turkey Traders purchased 470,000t milling wheat, mainly from the Black Sea region (most likely Russia), at $326.80-$354.00 c&f for Nov/Dec shipment.
Iraq has amended the date of its tender for 50,000 t milling wheat to 30 Oct, from 24 Oct.
South Korean animal feed maker Nonghyup Feed Inc. (NOFI) has bought an estimated 68,000 tonnes of animal feed corn in an international tender for up to 138,000 tonnes which closed on Tuesday.
The corn was bought at an estimated $329.99 a tonne c&f plus a $1.70 a tonne surcharge for additional port unloading for arrival in South Korea in January 2023.
Seller was said to be trading house Cofco.
The corn can be sourced from optional origins excluding the Black Sea region.
No purchase was initially reported of a second corn consignment also sought in the tender for arrival around Feb. 5, 2023.
That’s all, thank you.
We wish you a good day.
Author: Sandro F. Puglisi
