Good morning Farmer Family …

US farm markets were mixed but mostly higher yesterday. 

Corn prices closed with gains of 0.7%. 

Soybeans saw a more upside as they were 0.73% higher by the close, capturing so double-digit gains on the day.

Soymeal after Monday’s weakness, closed up 1.69%.

Soy oil prices extended their rally, closing 0.57% higher.

The wheat complex, in contrast, failed to follow suit, as Chicago SRW went home with 0.48% losses, Kansas City HRW closed 0.37% weaker and Minneapolis spring wheat were 0.57% lower at the bell. 

Equity markets picked up in a context where traders are expecting a slowdown in the monetary tightening policy, and that supported also some ag commodities.

Meantime, much-needed rains are expected to fall on parts of the Plains over the next few days. 

Weather forecasts for showers in the coming days in drought-affected wheat zones in Argentina and the U.S. Plains, indeed, are easing supply concerns.

In the U.S. Midwest, rains will expand across soft red winter wheat fields over the next two days, “significantly improving moisture for establishment” of the crop.

Rains may also deliver a small benefit to the Mississippi River, where low water levels are expected to continue hampering grain shipments.

However, the Mississippi River was already reopened near Hickman in Kentucky and Gunnison in Mississippi as the US Army Corps of Engineers dredged the channel deeper following the grounding of barges. 

Thus, there are reportedly no longer any queues at either location.

Sluggish U.S. wheat exports and competitive prices for Russian and Ukrainian supplies have weighed over wheat markets.

In this context, corn basis bids were steady to mixed on Tuesday after trending 8 to 10 cents higher at two ethanol plants while sliding 2 to 10 cents lower at two other Midwestern location.

Soybean basis bids were steady to mixed after tracking 5 to 15 cents higher at three processors while moving 1 to 10 cents lower at three other Midwestern locations.

Commodity funds were net buyers of CBOT corn, soybean, soyoil and soymeal futures contracts, and net sellers of wheat futures.

On this morning, Chicago wheat slid for a third consecutive session, trading near a five-week low.

Soybeans gained more ground, while corn edged lower.

Particularly, the most-active wheat contract on the Chicago Board of Trade fell 0.2% to $8.33 a bushel, as of 04:21 GMT, after touching its lowest since Sept. 20 at $8.26-3/4 a bushel on Tuesday.

Soybeans added 0.3% to $13.95-1/2 a bushel and corn lost 0.1% to $6.85-1/2 a bushel.

In other news, data from the U.S. Census Bureau and The Fertilizer Institute confirmed that the 370k tons of nutrient exports in August were the most for any month since TFI began tracking the data in 2013. 

Russian sanctions and Ukrainian reliability concerns each contributed to the U.S. market’s competitiveness for the EU.

In energy markets, oil prices eased on Wednesday after industry data showed U.S. crude stockpiles rose more than expected, though supply worries capped losses. 

Brent crude futures for December, indeed, fell $1.03, or 1.1%, to $92.49 a barrel by 06:35 GMT, after settling 26 cents higher in the previous session.

U.S. West Texas Intermediate (WTI) crude futures for December were down 75 cents, or 0.9%, to $84.57, reversing the previous session’s gain.

U.S. crude inventories rose by about 4.5 million barrels in the week ended Oct. 21, according to market sources citing figures from the American Petroleum Institute.

That was higher than expectations.

Official U.S. stockpile data from the government’s Energy Information Administration is due on Wednesday at 1430 GMT.

Meantime, ongoing supply constraints kept prices trading in a narrow range.

In ocean freight markets, the Baltic Exchange’s dry bulk sea freight index, weighed down by a dip in rates across vessel segments.

The overall index, indeed, fell 42 points, or about 2.3%, to 1,755.

Particularly, the capesize index lost 81 points, or about 4%, to 1,955.

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 $674 to $16,209.

The panamax index fell 40 points, or about 1.9%, to about a month low of 2,073.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, dropped $366 to $18,653.

The supramax index fell 12 points to 1,658.

In equity markets, investors are looking at corporate results to see how inflation is affecting consumer spending.

Meantime, they have become more confident the Fed will reduce its rate hike plans from three-quarters to half a percentage point at its December meeting, according to CME Group.

The U.S. economy is already slowing down and actually contracted during the first half the year. 

Traders see weaker U.S. housing prices and other data as support for a “dial back” of Fed plans at its December meeting.

That pushed down the yield on the 10-year Treasury, which slipped to 4.09% from 4.23% late Monday. 

The yield on the two-year Treasury, also fell to 4.45% from 4.50% late Monday.

The government will release its third-quarter gross domestic product report on Thursday.

In this context, on Wall Street, the S&P 500 gained 1.6% 3,859.11. 

The Dow Jones Industrial Average rose 1.1% to 31,836.74. 

The Nasdaq advanced 2.3% to 11,199.12.

Tech stocks, retailers and communication companies were among the biggest drivers.

On this morning, Asian stock markets followed Wall Street higher. 

Shanghai, Tokyo, Hong Kong and Sydney gained. 

Particularly, the Shanghai Composite Index rose 0.9% to 3,001.44 and the Hang Seng in Hong Kong gained 0.9% to 15,300.40.

The Nikkei 225 in Tokyo advanced 0.8% to 27,466.82 ahead of the expected release of a stimulus package this week that reportedly could exceed 20 trillion yen ($140 billion).

The Kospi in Seoul added 0.6% to 2,248.73. Sydney’s S&P-ASX 200 rose 0.2% to 6,810.90 after the government reported Australian inflation rose to 7.3% in the three months ending in September.

New Zealand and Southeast Asian markets rose. 

Indian markets were closed for a holiday.

In currency trading, on this morning the dollar slipped to 147.58 yen from Tuesday’s 147.97 yen. 

The euro advanced to 99.70 cents from 99.66 cents.

The battered pound edged higher against the U.S. dollar.

The new British prime minister, Rishi Sunak, warned Tuesday of a “profound economic crisis,” but his arrival appeared to reassure markets that were rattled by his predecessor’s economic plans. 

From Brazil, soybean sowing is progressing but is slightly behind normal given the rains, which are nonetheless beneficial for the future. 

It remains to be monitored for the coming weeks whether the La Nina effect will have an impact on rainfall in Brazil, like the water deficit that persists in Argentina.

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. 

Meantime, Brazil’s Anec now expects the country’s corn exports to reach 6.45 MMT in October, which is moderately below the group’s last estimate from a week ago.

Brazil’s Anec slightly increased its estimates for the country’s soybean exports in October, with a new projection of 3.77 MMT. 

Anec also upped its soymeal export estimate, which is now at 2.074 million metric tons.

From Argentine, according to the USDA attaché, due to dry conditions, wheat production for marketing year (MY) 2022/23 is forecast down at 15.5 million metric tons (MMT), 2 MMT lower than the official USDA estimate. 

As a consequence wheat exports are lowered to 10 MMT. 

Barley exports for MY 2022/23 are also forecast down at 3 MMT, 500,000 MT lower than official USDA projection as result of lower production and slower farmer selling. 

Corn exports in MY 2022-23 are projected at 37.5 MMT, 3.5 MMT lower than the official USDA estimate mainly due to a smaller forecast crop. 

Sorghum exports in MY 2022-23 are forecast at 2.2 million tons, with China being the primary destination.

In Europe, the EU MARS October report said normal autumn weather patterns aided harvesting of 2022-23 summer crops and planting of 2023-24 winter crops in most parts of Europe. 

Persistent drought conditions in north-western Italy and insufficient moisture in southern Spain seemingly have had no significant consequences for winter fieldwork. 

However, due to dryness through to late August and frequent rains in early September, a portion of rapeseed was sown outside the optimal window in some key producing countries, except for France, where winter sowing was completed on time.

Meantime, per the latest data from the European Commission, 2022/23 EU corn imports reached 9.04 million tonnes through October 23, which is more than doubling last year’s pace so far when reached 4.26 million tonnes.

European Union soybean imports during the 2022/23 marketing year have reached 3.5 MMT through October 23, which is modestly below last year’s pace so far. 

EU soymeal imports are also below year-ago results, with 4.94 million metric tons.

Rapeseed imports by the EU have been at 2.21 million tonnes since the beginning of the campaign, compared to 1.52 million last year to date.

On exports side, European Union soft wheat exports during the 2022/23 marketing year is trending slightly above last year’s pace so far after reaching 11.15 million tonnes through October 23. 

That was close to last year 10.96 million. 

France alone represents 4.30 million tonnes. 

The main destinations remain Algeria and Morocco. 

EU barley exports are well below last year’s pace, in contrast, with 2.37 MMT over the same period.

In other news, we note an impressive drop in gas prices recently, leading to a lull or even a slight decline in nitrogen fertilizers.

From Ukraine, the country’s exports of agricultural products could rise more than 8% in October from last month, the Ukrainian Agrarian Council said on Tuesday.

Ukraine is keeping its forecast of the winter wheat sowing area for the 2023 harvest unchanged at 3.8 million hectares despite a delay caused by unfavourable weather, deputy agriculture minister Taras Vysotskiy said on Tuesday.

Particularly, farmers had planted 3.1 million hectares to winter wheat as of 25 October. 

Another 500,000 hectares of other winter grains had been sown. 

Planted area will be down significantly from last year when Ukraine seeded 6.5 million hectares to winter wheat.

From Russia, SovEcon forecasted October wheat exports from Russia at 4.5Mt compared to 4.1Mt previous month and 2.8Mt in the same month last year. 

Barley exports are forecast at 300,000t (300,000t last month, 292,000t last year) and maize at 50,000t (50,000t last month, 252,000t last year). 

From the Middle Kingdom, China will accelerate investment in rural infrastructure to improve its ability to ensure food supply while also stabilizing the economy, according to a plan published by the agriculture ministry on Tuesday.

The rural infrastructure plan will target renovation of irrigation systems, reinforcement of reservoirs, building modern greenhouses and fisheries as well as cold storage facilities.

The ministry, has urged to start construction as soon as possible, with local governments encouraged to support the projects.

Meantime, Dalian Corn Prices were down by 20 yuan (~7 cents) in the Jan contract on Tuesday to 2,862 yuan/MT (~ $9.95/bu). 

Dalian No2 Soybean Prices were slightly weaker on a wide ranged start to the week. 

At the close the import quality bean futures were 5,530 yuan/MT (~$20.60/bu).  

From Australia, local markets remained relatively unchanged yesterday with everyone trying to digest the impact of flooding. 

Eastern Australian canola prices jumped which sparked some interest for growers that have confidence to sell some more crop.

CBH announced yesterday that as a result of improved supply chain performance, an additional 600,000 tonnes of shipping capacity will be released for the Kwinana zone at 10am AWST today.

The federal budget last night included announcements that more than $9 billion in regional infrastructure funding would be scrapped in favour of heavy investments in rural health, telecommunications, agriculture and the transition to net-zero. 

On the international trade scene, Jordan bought 60,000t wheat at $372.75/t for January shipment and issued a new tender to buy 120,000t wheat (deadline for offers is 1 Nov for March/April shipment).

Algeria bought a small volume estimated at around 80,000 t of soft wheat from optional sources, at prices around 380 USD/t Cif.

The lowest price offered in the tender from Pakistan to purchase 500,000 tonnes of wheat which closed on Wednesday was believed to be $373.00 a tonne c&f.

An estimated eight trading houses were believed to be participating in the tender.

The state agency Trading Corporation of Pakistan (TCP) is still considering the offers and no purchase has been reported.

Trading houses which submitted offers, with tonnes, and prices in dollars a tonne c&f, were:

Aston 120,000t at $373.00, CHS 125,000t at $384.40, Solaris 120,000t at $384.91, Falconbridge 120,000t at $387.79, Cargill 120,000t at $393.00, Ameropa 110,000t at $394.00, Agrocorp 110,000t at $397.38, Bunge 110,000t at $414.15.

Offers must remain valid for 80 hours after submission. 

All offers involved wheat from several optional origins.

Shipments were sought in 2022 in consignments of at least 100,000 tonnes between Nov. 13-Nov. 18, Nov. 21-Nov. 26, Nov. 29-Dec. 4, Dec. 7-Dec. 12 and Dec. 15-Dec. 20. 

Shipments must be organised so that all wheat arrives in Pakistan by Jan. 10, 2023.

That’s all, thank you.

We wish you a good day.

Author: Sandro F. Puglisi

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