Good morning Farmer Family …

US farm markets were mixed but mostly lower yesterday.

Corn prices fell by 0.4%. 

The soybean market settled with a fractionally gain of 0.04%. 

Meal prices rallied gaining 12.64% by the close. 

Bean oil ended the session on 1.53% losses. 

Wheat losses were variable, as Chicago SRW ended the day firmer with losses limited to 0.24%. 

Kansas City HRW wheat contract pulled back and closed with 0.9% losses. 

Minneapolis spring wheat went home with 0.16% losses. 

On the weather side, according NOAA agency, there’s plenty of rain in store for the Mid-South and Texas between today and Monday, with some areas likely to see 1.5” or more through the weekend. 

However, areas further north will be much drier during that time. 

NOAA’s 8-to-14-day outlook predicts warmer and wetter than normal conditions for most of the Midwest and Plains between November 3 and November 9.

Much-needed rain also arrived in Argentina and improved conditions for 2022/23 wheat and corn there, the Buenos Aires grains exchange said on Thursday.

On the financial side, The Fed announced real GDP grew by 2.6% in Q3.

Consequentially, the Dollar Index recovered, rallying back to $110.453, which made US grain prices less competitive internationally. 

Meantime, traders recived yesterday a new round of export sales data.

Particularly, USDA in its weekly Export Sales report showed only 263,999 MT of corn was booked during the week of 10/20. 

That was down from 408k MT last week but was up from 200k MT during the week of 10/6. 

Corn commitments sat at 14.095 MMT, a 47% drop from last year.

As for soybean, USDA reported 1.03 MMT of soybeans were sold for export during the week that ended 10/20. 

That was down from 2.3 MMT last week and from 1.06 MMT during the same week last year. 

333k MT were previously announced and traders were looking for between 800k and 1.6m MT ahead of the report. 

China was the top buyer with 1.115 MMT – though 664k MT came from previously reported sales to unknown. 

The data showed 31.5 MMT of 22/23 bean commitments, compared to 30.14 MMT last year. 

FAS data had the week’s meal sales as 217k MT, compared to 542k MT last week and between 150k and 600k MT expected. 

For soybean oil the report showed Canada was the exclusive buyer of 2.5k MT. 

Accumulated soy oil commitments sat at 31,889 MT through the first 3 weeks of data – the lowest since reporting began. 

As for wheat, the report showed 533k MT of wheat was booked during the week that ended 10/20. 

That was a MY high and was nearly double the same week last year. 

South Korea was the top buyer for the week with 109k MT, and unknown destinations also booking 91k MT. 

Accumulated wheat commitments, however, reached 11.823 MMT, that was down from 12.6 MMT last season. 

Operators, however, also continued to closely monitor shipments from the Black Sea ports.

The current grain deal brokered by UN will expire in the coming weeks. 

Russia said on Thursday provisions of the Black Sea grain deal to ease Russian agricultural and fertiliser exports were not being met, and that Moscow was yet to make a decision on whether the agreement should be extended.

The United States, on their part, strongly supports the efforts of United Nations to ensure the Black Sea grain deal is renewed, White House spokesperson John Kirby said on Thursday, saying that would help bring food prices down.

In this context, corn basis bids were steady to mixed after firming 5 cents at an Iowa ethanol plant and sliding 5 to 7 cents lower at two other Midwestern locations on Thursday.

Soybean basis bids were largely steady across the central U.S. on Thursday but did tilt 5 cents higher at an Indiana processor.

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

Funds were seen as net even in soybean futures.

On this morning, Chicago corn prices lost more ground, with the market poised for a second weekly loss as the slow pace of U.S. exports weighed on prices.

Wheat eased, setting the market on course for a fourth weekly loss, while soybeans are set to end the week marginally lower.

Particularly, the most-active corn contract on the Chicago Board of Trade was down 0.5% at $6.79 a bushel, as of 02:58 GMT, wheat gave up 0.8% to $8.32-1/4 a bushel and soybeans lost 0.4% to $13.88 a bushel.

For the week, corn is down 0.8%, wheat has given up more than 2% and soybeans have lost around half a percent.

In energy markets, oil prices fell on Friday.

Particularly, Brent crude futures dropped $1.02, or 1.1%, to $95.94 a barrel at 06:35 GMT, after rising 1.3% in the previous session. 

U.S. West Texas Intermediate (WTI) crude futures were down $1.24, or 1.4%, at $87.84 a barrel.

Friday’s declines came after Chinese cities on Thursday doubled down on COVID-19 curbs, sealing up buildings, locking down districts and throwing millions into distress in a scramble to halt widening outbreaks.

China reported 1,506 new COVID-19 infections on Oct. 27, the National Health Commission said on Friday, up from 1,264 new cases a day earlier.

Still, both benchmark oil contracts were on course for a weekly rise, with Brent heading for a gain of more than 2% and WTI more than 3%.

The International Monetary Fund expects China’s growth to slow to 3.2% this year, a 1.2-point downgrade from its April projection, after an 8.1% rise in 2021.

However, analysts said the strong rebound in U.S. gross domestic product in the third quarter reported on Thursday highlighted the resilience of the world’s largest economy and oil consumer.

In ocean freight markets, the Baltic Exchange’s dry bulk sea freight index, which tracks prices for ships carrying dry bulk commodities, fell for a seventh session on Thursday to its lowest in more than a month, weighed down by a dip in rates across vessel segments.

The overall index, indeed, fell 94 points, or about 5.5%, to 1,612.

Particularly, the capesize index fell 137 points, or about 7.3%, to 1,748.

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 $1,137 to $14,500.

The panamax index shed 107 points, or about 5.3%, to 1,900 in its worst session in nearly two months.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, dropped $965 to $17,100.

The supramax index fell 60 points to 1,572.

In equity markets, on Wall Street, the S&P 500 fell 0.6%, closing at 3,807.30.

The tech-heavy Nasdaq fell 1.6% to 10,792.67, while the Dow Jones Industrial Average rose 0.6% to 32,033.28.

Smaller company stocks held up better than the broader market. 

The Russell 2000 index added 0.1% to 1,806.32.

Meta Platforms, plummeted 24.6% for the biggest drop in the S&P 500 after reporting a second straight quarter of revenue decline amid falling advertising sales and stiff competition from TikTok. 

Alphabet fell 2.9% and Microsoft slid 2%.

Amazon slid 19% in after-hours trading after the retail giant issued an estimate for sales in the last quarter of the year came in well below analysts’ forecasts. 

The stock fell 4.1% in regular trading before the release of its latest quarterly results.

Meantime, construction equipment maker Caterpillar jumped 7.7%. 

The big gain helped boost the Dow.

Another pullback in long-term Treasury yields helped support stocks in companies that weren’t reporting quarterly results. 

The yield on the 10-year Treasury, indeed, fell to 3.91% from 4.01% late Wednesday. 

The two-year yield fell to 4.30% from 4.42%.

Also, markets got some encouraging economic news Thursday as the government reported the U.S. economy returned to growth last quarter, expanding 2.6%. 

That marks a turnaround after the economy contracted during the first half of the year.

On this morning, shares were mostly lower in Asia.

Japanese government was preparing about $490 billion in stimulus spending to help the economy cope with inflation. 

The economic stimulus package due for approval Friday includes government funding of about 29 trillion yen ($200 billion) in subsidies and other measures to help soften the burden of costs from rising utility rates and food prices. 

It is also designed to help shore up support for Prime Minister Fumio Kishida, whose popularity has taken a beating due to a scandal over ties between the ruling Liberal Democratic Party and the South Korea-based Unification church.

As expected, the Bank of Japan wrapped up a policy meeting by keeping its ultra-lax monetary policy unchanged even as it forecast higher inflation.

In this context, the Nikkei 225 index lost 0.5% to 27,210.03 while the Hang Seng in Hong Kong sank 2.3% to 15,069.69. 

The Shanghai Composite index shed 0.8% to 2,958.25.

The Kospi in Seoul declined 0.4% to 2,278.64. 

Australia’s S&P/ASX 200 dropped 0.8% to 6,788.00.

In currency trading, the dollar fell to 146.20 yen from 136.31 late Thursday. 

The euro saw weakness on a dovish response to Thursday’s ECB meeting outcome.  

The 10-year bund yield on Thursday fell sharply by -15 bp to 1.96%, undercutting the euro’s interest rate differentials.

As a consequence, the dollar was slightly higher at 0.9980 against the euro, from 0.9962 posted yesterday.

From South America, much-needed rain improved conditions for 2022/23 wheat and corn in Argentina, where a prolonged drought has generated losses and area cuts for both crops, the Buenos Aires grains exchange said on Thursday.

The country’s main agricultural regions received between 20 and 100 millimeters of water from Tuesday to Wednesday, which brought relief for crops after significant rainfalls had not been recorded in the region since May this year.

The Rosario Grains Exchange on Wednesday slashed its forecast for Argentina’s wheat harvest to 13.7 million tonnes from 15 million. 

Corn planting for the 2022/23 cycle began last month, although drought delayed planting and contributed to the smallest planted area in six years, according to the Rosario Grains Exchange.

Particularly, the 2022/23 Argentina corn crop reached 17% through late last week. 

That’s behind both 2021’s pace of 26% and the historical average of 31%. 

In areas were drought persists, farmers may swap some of their corn acreage out for soybeans this season.

The Buenos Aires Grain Exchange, on its part, has maintained 2022-23 corn area at 7.3Mha, with 22pc of planting complete, and maintained at 15.2Mt its estimate of 2022-23 wheat production. 

Meantime, soybean producers sold 70.3% of Argentina’s 2021/22 crop through last week, the agriculture ministry said on Wednesday.

The portion of the soybean crop sold to date underperforms the 74.2% sold during the same period in the 2020/2021 season.

Argentina, harvested 44 million tonnes in the 2021/2022 soybean season.

Producers sold 164,900 tonnes of the harvest between October 13-18, far below the 750,000 tonnes sold in same period last year, though a temporary soy export boom last month makes comparison difficult.

The agriculture ministry also reported that 69.4% of Argentina’s 59-million-tonne corn harvest had been sold, above the 67.6% sold at the same point last year.

As for wheat, through last week, producers sold 73,200 tonnes of the 2022/2023 season.

In Europe, markets had again a relatively calm yesterday.

The European Commission lowered its projection for EU usable production of maize (corn) in 2022/23 to 54.9 million tonnes from 55.5 million a month ago. 

This figure is at its lowest since 2007. 

In this context, expected EU maize imports in the 2022/23 season were increased to 22.0 million tonnes from 21.0 million a month ago, maintaining the prospect of the biggest imports in four years.. 

For soft wheat, the EU’s most-produced cereal, estimated usable production for 2022/23 was increased slightly, to 127.2 million tonnes from 127.0 million forecast a month ago.

The volume remained below last season’s, despite a 1 million tonne downward revision that put estimated 2021/22 output at 129.1 million tonnes.

Forecast soft wheat stocks at the end of 2022/23 were cut to 13.7 million tonnes from 14.5 million, as the revision to last year’s crop and an increase to projected animal feed demand outweighed the upward adjustment to this year’s crop and a rise in expected imports.

Projected 2022/23 soft wheat exports were kept at 36.0 million tonnes.

In oilseeds, the Commission revised up rapeseed production in 2022/23 by 0.3 million tonnes to 19.6 million, a five-year high, but trimmed expected sunflower seed output by 0.3 10.0 million.

Meantime, Dutch health authorities have culled around 25,000 hens on a farm in the south of the country after the detection of a highly infectious strain of bird flu, the government said on Thursday.

More than a dozen cases of the form of avian flu have been reported in the Netherlands in the past month, following dozens of cases earlier in the year.

France has also seen a resurgence in cases after experiencing its worst-ever bird flu wave earlier this year.

From the Black Sea basin, UN aid chief Martin Griffiths said on Wednesday he was relatively optimistic the export corridor deal would be extended beyond November.

Russia on Thursday said provisions of the deal to improve Russian agricultural and fertiliser exports were not being met, and that Moscow was yet to decide whether the agreement should be extended beyond the 19 November deadline. 

Foreign Ministry spokeswoman Maria Zakharova told reporters the West had not taken sufficient steps to ease sanctions to facilitate Russian exports. 

Meantime, the so-called “suspicious object” reported in the shipping corridor was cleared as non-threatening, the UN said on Wed, meaning that traffic can resume. 

However, there remains a large backlog of vessels, after the pause in traffic.

From the Middle East, some Yemeni farmers have turned to planting their own wheat as global disruptions dent imports and send prices soaring in Yemen.

Most Yemenis cannot afford foreign wheat with prices rising to some 20,000 riyals, equivalent to $33. 

Food price inflation had already doubled in just two years in some part of the country.

Large-scale local production of wheat in Yemen is challenging as irrigation water is scarce, and infrastructure to make use of rainfall is lacking.

In 2021, Yemen produced around 250,000 tonnes of wheat. 

The government launched a project to add acres for wheat planting.

“This will increase local output and we won’t need to rely on imports at all” the ministry said.

From Australia, there continues to be little traded in local markets and prices yesterday were little changed. 

Better than expected canola yields are harvesting in WA and early canola is harvesting in the NSW Central West. 

All eyes are on the sky at the moment and while there are a few sunny dry days on the way, the forecast for next week is a major concern with 15-50mm expected over eastern Australia and South Australia from Sunday into next week.

Road and rail line closures continue to cause headaches and, with harvest underway in parts of Qld and some areas of NSW, pressure will start to build. 

Grain is reportedly still moving although taking longer routes to get around closures. 

On the international trade scene, Taiwan Flour Millers’ Association purchased 38,515t milling wheat from the US for Dec shipment from the PNW ports, incl. 20,625t DNS (14.5% min. protein) at $417.73/t fob, 11,220t HRW (12.5%) at $424.58/t fob and 6,670t SW (9.5%) at $345.87/t fob. 

Freight costs at $47.95/t. 

Jordan made no purchase in a recent tender for 120,000t feed barley.

A new tender (2 Nov) has been issued for the same volume for Mar/Apr shipment. 

South Korea’s Major Feedmill Group (MFG) purchased about 120,000 tonnes of soymeal in a private deal on Thursday without an international tender being issued.

It was purchased from trading house Cofco and expected to be sourced either from China or the United States.

Some 60,000 tonnes was bought at an estimated $528.49 a tonne c&f including a surcharge for additional port unloading for arrival in South Korea around March 21, 2023.

Another 60,000 tonnes was bought at an estimated $515.95 a tonne c&f also including a surcharge for additional port unloading for arrival in South Korea around April 16, 2023.

The MFG has also issued an international tender to purchase up to 140,000 tonnes of animal feed corn on Friday.

The deadline for submission of price offers in the tender is also Friday, Oct. 28.

The corn is sought in two consignments of 55,000 to 70,000 tonnes, both for February 2023 arrival in South Korea.

The MFG is seeking offers under $340 a tonne, including surcharges for additional port unloading. 

Ukrainian and Russian-origin corn cannot be supplied in the tender.

The first consignment is sought for arrival in South Korea around Feb. 1.

Shipment was sought between Dec. 9 and Dec. 28 if sourced from the U.S. Gulf or Black Sea region/Europe, between Dec. 29 and Jan. 17 from the U.S. Pacific Northwest coast, between Dec. 4 and Dec. 23 from South America or Dec. 14 and Jan. 2 from South Africa.

The second consignment is sought for arrival in South Korea around Feb. 10.

Shipment was sought between Dec. 18 and Jan. 6 if sourced from the U.S. Gulf or Black Sea region/Europe, between Jan. 7 and Jan. 26 from the U.S. Pacific Northwest coast, between Dec. 13 and Jan. 1 from South America or Dec. 23 and Jan. 11 from South Africa.

That’s all, thank you.

We wish you a good day.

Author: Sandro F. Puglisi

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