Good morning Farmer Family …
US farm markets were mostly lower yesterday.
The corn market closed Thursday’s session 1.2% lower.
Soybean prices dropped 1.17% on the day.
Meal prices ended the day 2.4% lower.
Bean oil prices were also weaker with 0.42% losses for the session.
In wheat markets, Kansas City HRW contracts were the lone exception, testing very modest gains of only 0.11%.
Other wheat contracts closed with losses, as Chicago and Minneapolis were 0.65% and 0.66% respectively weaker on the day.
Traders digested rising private US crop estimates.
StoneX on Wednesday raised its estimate of the average U.S. corn yield to 174.5 bushels per acre (bpa), from 173.9 last month.
On Thursday, IHS Markit Agribusiness, raised its U.S. corn yield estimate to 172.9 bpa, from 171.2 a month ago.
Their production outlook is 13.981 bbu.
IHS Markit also expects the national U.S. soybean yield at 50.3 bpa, compared to their prior 49.9 bpa prior forecast.
Their production outlook is 4.36 bbu.
The USDA is scheduled to release updated U.S. and world crop estimates on Nov. 9.
Wheat and corn declined, also because a sharply higher dollar pressured down the grain complex.
Meanwhile, soybean prices closed lower, after a seven-session climb, as lackluster U.S. export sales and macroeconomic worries weighed on the market.
USDA’s weekly Export Sales data, indeed, had 372,220 MT of corn was sold for export during the week that ended 10/27.
That was up 41% from the week prior and was inline with estimates.
The weeks shipments were 450k MT, bringing the accumulated total to 4.145 MMT.
The full season’s commitments, however, were 14.467 MMT – compared to 31 MMT at the same time last season.
For sorghum, FAS had 12k MT sold – an 11-wk high.
Shipments of 9,236 MT brought the season’s total to 44k MT compared to 269k MT during last year’s pace.
For soybean, USDA reported 830k MT of beans sold during the week that ended 10/27.
That was down 19% from the week prior and was at the low end of pre-report estimates.
The weekly report had 2.652 MMT shipped during the week.
Accumulated soybean commitments were 32.3 MMT, compared to 32 MMT at the same point last year.
For the products, USDA reported 122k MT of soybean meal sales and 2,352 MT of soybean oil cancelations for the week that ended 10/27.
That was under the pre-report estimate for both products.
As for wheat, the report showed 348k MT sold during the week of 10/27.
That was down by 45% through the week and was 13% below the same week last year – but inline with estimates.
Accumulated commitments reached 12.17 MMT through 10/27 according to the weekly release.
That compares to 13 MMT flat last year.
Meantime, Monthly Export data from Census had official September corn exports as 2.63 MMT to start the year.
That was up 4.5% from last year’s start, though was down 20% from August.
DDGS exports were 877,745 MT in September, a 2.8% increase from Sep ’21.
For ethanol, the monthly update had 100.4k gallons the second largest September total on record behind 2013.
For sorghum the monthly report showed 116k MT were shipped in September, that was a 4-yr low and down from 1.3 MMT in August.
For soybean shipments were at 2.123 MMT.
That was near last year’s start, but was well below the 20/21 record 7.2 MMT.
In the products Census data had 828,128 MT of September soymeal exports.
Soy oil exports were 20,446 MT.
That was down 21.05% from August but was 33.09% above last year.
Wheat exports were 3.048 MMT in September.
That was a MY high and was up 32% from Sep ’21.
MYTD wheat shipments totaled 8.67 MMT, but down 4% from last year’s pace as the slowest 4 month start since 18/19.
In this context, corn basis bids were steady to mixed across the central U.S. on Thursday after trending as much as 6 cents lower at an Ohio elevator and as much as 3 cents higher at an Indiana ethanol plant.
Soybean basis bids did trend 5 cents higher at an Indiana processor while firming 7 cents higher at an Ohio river terminal.
Commodity funds were net sellers of CBOT corn, soybean, soymeal, wheat and soyoil futures contracts.
On this morning, Chicago soybean prices rose nearly 1%, with prices on track to end the week on a positive note, as expectations of strong Chinese demand underpinned the market, despite lackustre weekly export sales.
Wheat gained ground and the market is set for its first weekly rise since early October on concerns over Black Sea supplies and excessive rains damaging the Australian crop.
Thus, the most-active soybean contract on the Chicago Board of Trade was up 0.9% at $14.49-3/4 a bushel, as of 05:36 GMT, and the market has gained 3.5% so far this week.
Wheat climbed more than 2% this week after four weekly losses while corn is set to finish the week marginally higher.
In energy markets, oil climbed on Friday as the dollar eased and supply risks lingered.
Brent crude futures indeed were up $1.84, or 1.9%, to $96.51 a barrel at 07:40 GMT.
The contract is headed for a weekly climb of more than 0.5%.
U.S. West Texas Intermediate (WTI) crude futures were up $1.94, or 2.2%, at $90.11 a barrel, on course for a weekly gain of more than 2%.
Both contracts rose as the dollar slipped.
A weaker dollar boosts oil demand as it makes the commodity cheaper for those holding other currencies.
However, fears of a recession in the United States, grew on Thursday after Federal Reserve Chairman Jerome Powell said it was “very premature” to be thinking about pausing interest rate hikes.
The Bank of England warned on Thursday that it thinks Britain has entered a recession and the economy might not grow for another two years.
ANZ analysts pointed to signs of weaker demand in Europe and the United States with people driving less and Amazon warning of weaker sales, which could dampen demand for distillate.
On this wake, Saudi Arabia lowered December official selling prices (OSPs) for its flagship Arab Light crude to Asia by 40 cents to a premium of $5.45 a barrel versus the Oman/Dubai average, although the cut was in line with trade sources’ forecasts.
Thus on Thursday, Brent crude fell 1.55%% to $94.67 a barrel, while U.S. crude slide 2.03% to trade at $88.17 a barrel.
In ocean freight markets, the Baltic Exchange’s dry bulk sea freight index, extended its losing streak to a 12th session on Thursday, pressured by waning capasize rates due to low iron ore shipments to China.
The overall index, indeed, fell 31 points, or about 2.4%, to 1,290.
Particularly, the capesize index shed 61 points, or about 4.7%, to 1,225, its lowest since Sept. 13.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as coal and steel-making ingredient iron ore, fell $506 to $10,158.
The panamax index rose 16 points, or about 1%, to 1,699, snapping its 10-day losing streak.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, rose $146 to $15,295.
The supramax index fell 45 points to 1,287.
In equity markets, the S&P 500 fell 1.1% or 39.80 points to 3,719.89.
The Dow lost 0,5% to 32,001.25.
The Nasdaq slid 1.7% or 181.86 points to 10,342.94.
Smaller company stocks also lost ground.
The Russell 2000 fell 0.5% to 1,779.73.
The declines followed the sixth increase by the Federal Reserve of its benchmark rate this year.
The three-quarters-of-a-percentage-point raise took short-term interest rates to a range of 3.75% to 4%, the highest level in 15 years.
Investors had been hoping for economic data signaling that the Fed might avoid more rate hikes that might go too far in slowing the economy and bring on a recession.
But hotter-than-expected data from the employment sector suggests the Fed will remain aggressive.
As a result, the two-year Treasury note, rose to 4.72% from 4.61% late Wednesday and is now at its highest level since 2007, according to Tradeweb.
The yield on the 10-year Treasury rose to 4.15% from 4.09% late Wednesday.
On this morning, Wall Street will get a broader update from the U.S. government’s October jobs report.
An update on consumer inflation is due out next week.
Meantime, world shares were higher this morning, led by gains in Chinese markets as investors grasped at hopes for an easing of the country’s stringent pandemic controls.
Hong Kong’s benchmark soared more than 7% but then fell back, gaining 5.4% after a Communist Party newspaper, the Global Times, reported that local officials were being told not to impose overly burdensome restrictions to curb coronavirus infections.
The Shanghai Composite index also jumped, gaining 2.4%, with the sentiment was buoyed by an article in the party newspaper People’s Daily by China’s former top trade envoy, Liu He, who said the country would continue its market reforms.
The gains in Hong Kong’s Hang Seng index left it up almost 9% for the week, at 16,161.14.
It’s still down 36% in the past year.
The Shanghai Composite added 80 points to 3,070.80.
Elsewhere in Asia, Tokyo’s benchmark Nikkei 225 dropped 1.7% to 27,199.74, catching up after Japan’s markets were closed Thursday for a holiday.
South Korea’s Kospi gained 0.8% to 2,348.43.
Australia’s S&P/ASX 200 added 0.5% to 6,892.50, a
European benchmarks were also higher in early trading.
France’s CAC 40 added 0.9% to 6,299.09.
Germany’s DAX rose 07% to 13,216.27.
Britain’s FTSE 100 gained 0.8% to 7,247.39.
In currency trading, on this morning the U.S. dollar inched down to 147.64 Japanese yen from 148.25 yen.
The euro cost 97.83 cents, up from yesterday’s 97.50 cents.
From Canada, Canada’s exports rose in September, largely driven by better wheat volumes and prices, while imports were also up, with both import and export values impacted by the depreciation of the Canadian dollar, Statistics Canada said on Thursday.
The country’s trade surplus with the world widened to C$1.14 billion ($827.4 million) in September, below analyst forecasts of a surplus of C$1.34 billion, but up from a downwardly revised C$550 million surplus in August.
Exports rose 1.3% in September and were up 1.7% on a volume basis, though prices fell for the fourth consecutive month, Statscan said. Wheat led the gains, rebounding sharply as this year’s strong harvest began to impact exports.
A large share of Canada’s trade is done in U.S. dollars, which means converted values are higher when the Canadian dollar depreciates against the U.S. dollar, Statscan said.
From South America, soybean production in Brazil could fall below 150 million tonnes in the 2022/2023 crop year due to the effects of the La Nina weather phenomenon in South America, a HedgePoint analyst warned on Thursday, saying it could slightly lower initial projections for a record harvest.
Official government projections suggest that Brazil’s soybean crop will to grow by 21.3% to a record 152.35 million tonnes.
Soy planting is still underway, but delays in certain parts of the country could affect the cultivation of second crop corn, which is sown after the soybean harvest in the same areas.
A cold front, which should hit the south of Brazil in particular next week, may lead some farmers to postpone planting a little longer.
Meantime, Brazil’s Anec reported that the country’s corn exports climbed to 6,24 MMT in October.
That was more than triple October 2021’s tally of 1,87MMT.
Brazil’s Anec also reported that the country’s October soybean exports reached 3,57 MMT in October.
That was a year-over-year increase of 19.5%.
Brazilian soymeal exports were also up from year-ago results, with 1.817 million metric tons last month.
Meantime, Brazilian road blockades set up by demonstrators protesting the result of Sunday’s presidential election is compromising about 45% of the country’s poultry and hog industry capacity.
Some plants were halted while others reduced slaughtering.
The situation is expected to improve around Monday as protests fizzle out.
The Buenos Aires grains exchange on Thursday cut their forecasts for Argentina’s wheat production 2022/2023 to 14 million tonnes, down from 15.2 million tonnes previously.
Meantime the government has announced that due to severe drought conditions and a smaller than expected harvest, current wheat export licenses will be extended for up to 360 days.
The measure would apply to shipments originally scheduled to load between 1 Dec and 28 Feb.
In Europe, wheat market gave up a little ground yesterday, still in the context of a recovery in exports from Ukraine.
Corn and rapeseed 2023 contracts changed little.
The warmest October in 40 years in France has accelerated grain crop development so much that it has left them fragile to sudden frosts later in the season, French crop institute Arvalis warned.
Average temperatures in October were 3.3 degrees above normal at 16.3 degrees Celsius (61.34°F), Arvalis said, noting that these temperatures were usually seen in September.
Furthermore, France experienced a drop in rainfall in 80% of the country.
Soft wheat and winter barley sowing for the 2023 harvest are running about one week ahead of the five-year average in France, farm office FranceAgrimer said on Friday.
The warm weather means winter crop leaves will grow earlier than usual and be bigger, as seen in fields that look “greener” than usual in early November, Arvalis said.
But cereals have not yet experienced the cool or even cold temperatures needed to make them hard enough to resist frosts, it said.
“The scenario to be feared would therefore be a sudden and significant drop in temperatures and a rapid arrival of severe frosts,” it said in a statement.
Meantime, two Spanish poultry farm workers tested positive for bird flu following an outbreak in poultry, in what appears to be the first known human infections in Spain and the second in Europe since 2003, the World Health Organization said on Thursday.
The poultry outbreak was confirmed by authorities on Sept. 20 and there has been no evidence to date of human-to-human transmission related to this event, the WHO said.
The infections with influenza A (H5N1) of the two workers – males aged 19 and 27 – were detected in September and October, likely triggered by exposure to infected poultry or contaminated environments at the farm in Guadalajara in central Spain.
The reports of these two cases do not change the current WHO recommendations on public health measures and surveillance of influenza, the organization said.
From the Black Sea basin, uncertainty about grain exports from the region supported wheat this week.
Ukraine has exported 10 million tonnes of grain and other food under the U.N.-brokered deal.
The Kremlin said on Thursday it had not committed to extending the export deal beyond the 19 November deadline.
Russia says it still needs to assess whether the deal was working before deciding whether to extend its participation.
Russian Foreign Minister Sergei Lavrov urged the United Nations to step up its efforts to ensure Western countries ease restrictions.
Moscow says Western hinder its agricultural and fertiliser exports which also formed part of the deal.
“We still do not see any results regarding a second aspect: the removal of obstacles to the export of Russian fertilisers and grain”.
There are currently 120 vessels waiting to use the export corridor with the JCC saying that “While the queue for the inspections has been significantly reduced, there are nevertheless currently over 120 vessels waiting to move, mainly those planning an inbound voyage”.
Meantime, Turkish President Tayyip Erdogan said on Friday that he had agreed with counterpart Vladimir Putin that Russian grains sent under the Black Sea export deal should go to poor African countries for free.
Seems Vladimir Putin, said ‘Let’s send this grain to countries such as Djibouti, Somalia and Sudan for free’.
Really Turkey and Russia are working to determine the list of countries that need Russian grain and fertilizers.
The list of countries, to which Russian grain and fertilizers will go, is being determined.
The lists and routes are being clarified by the relevant departments under the coordination of both Turkey and the UN.
Efforts are also aimed at removing obstacles to the export of Russian food and fertilizers.
“African countries and countries in need” are considered as potential recipients of the Russian products, of course.
Meantime, Russian Agriculture Ministry reports that as at early-Nov, 2023-24 winter crops have been planted on around 17Mha.
Fieldwork in some regions, notably in the Volga and Central Districts, has been hampered by overly wet conditions, with additional fields likely to be seeded with spring crops later in the season.
Reduced fertiliser application rates may negatively impact productivity.
Meantime, as of early November, Russia cut grain export by 1.5% y/y so far in 2022/23 MY to 17.995 mln tonnes, head of Russian Grain Union Eduard Zernin said on November 2.
He added that the export of Russian wheat decreased by 3.5% y/y to 15.036 mln tonnes.
In Ukraine, as of November 4, Ukraine has exported 13.87 mln tonnes of grains and pulses, including 668 thsd tonnes so far in November, the Ministry of Agrarian Policy informed.
At the same date last year, the export amounted to 20.434 mln tonnes, including 1.024 mln tonnes in November.
The total included 5.211 mln tonnes of wheat (12.815 mln tonnes in 2021/22 MY), 1.164 mln tonnes of barley (4.52 mln tonnes), 7.44 mln tonnes of corn (2.831 mln tonnes), 6.3 thsd tonnes of rye (69.9 thsd tonnes).
Ukraine has exported 40.3 thsd tonnes of flour (44.1 thsd tonnes), including 37.5 thsd tonnes of wheat flour (43.6 thsd tonnes).
From South East Asia, Malaysian palm oil futures ticked up on Friday to log a 9.4% weekly jump, as a recent rally in rival edible oils, crude futures, and a declining ringgit lent support.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange gained 28 ringgit, or 0.7%, to 4,365 ringgit ($919.72) a tonne, rising for a fourth session in five.
It had earlier jumped 3%, but surrendered gains after leading analysts told a conference global demand for the commodity remains uncertain as strict COVID-19 policies in key market China remains.
Operators are expect palm oil prices to trade between 3,500 to 4,500 ringgit per tonne in the period from now until the end of March next year due to higher crude prices and weaker ringgit.
Malaysia’s palm oil inventories at end-October likely swelled to 2.53 million tonnes, its highest in three and a half years, as production improved while imports slumped.
Production is seen expanding 3% to 1.82 million tonnes, while exports likely rose 4.5% to 1.48 million tonnes.
In Indonesia, the Indonesia Palm Oil Association said palm oil and kernel oil production is expected to slip to 51.3 million tonnes this year, from 51.6 million tonnes in 2021.
However, leading industry analyst Thomas Mielke said global palm oil output is seen increasing by 2.9 million tonnes in the 2022/23 season.
($1 = 4.7460 ringgit).
From Australia, the country exported 875,107 tonnes of malting barley, 7,196,296t of feed barley and 2,242,473t of sorghum in 2021-22 (Oct-Sep).
The figures have come to light following the recent release of Australian Bureau of Statistics (ABS) export data for September.
For malting barley, September exports fell to a low for the 2021-22 year of 41,870t, with Vietnam on 32,942t showing up as the only full bulk cargo for the month.
September feed barley exports at 662,421t hit a monthly high for the back half of the shipping year, as did shipments to Saudi Arabia on 335,543t.
Saudi on 3.2Mt for the year has been the market for close to half of Australia’s 2021-22 feed barley exports, with Japan on 1Mt the only other seven-digit market for the year.
On sorghum, China was again the major market by far in September, with 219,073t shipped for the month to take the total 2021-22 to 1.9Mt, or 86 per cent of the annual total.
The shipping year has seen Mexico on 317,238t emerge as the biggest market for Australian malting barley, and India pop up as a fledgling market for Australian feed and malting barley now that some phytosanitary issues have been resolved.
Meantime, local markets continued to track sideways to round out the week.
The ASX Jan 23 eastern wheat contract settled A$10/t lower from previous trading day and saw a touch more liquidity trade on the Jan to March spread with Jan at $494 and March at $492 settle.
With a stop start harvest in the north wheat values have also tracked sideways for the week, SFW1 quoting $400-405/t and H2 Brisbane $568/t.
A very welcome dry couple of days are on the cards.
Showers are forecast to reappear on Sunday but the totals at this stage look to be below 10mm from Sunday into next week for most. Victoria is expected to receive 10-25mm is expected from Tuesday to Friday.
On the international trade scene, Iraq’s state grains buyer purchased about 150,000 tonnes of hard wheat expected to be sourced from Canada, Lithuania and Australia in an international tender.
The purchase was believed to involve at least 50,000 tonnes of Canadian wheat, said to have been bought at the lowest price of an estimated $489.80 a tonne c&f.
Trading house Viterra was said to be the seller.
About 50,000 tonnes of wheat sourced from Lithuania was also said to have been bought at about $499 a tonne c&f from trading house Hanalico.
Some 50,000 tonnes of Australian wheat was purchased at about $480 a tonne c&f from trading house Tiryaki.
The wheat could be sourced from optional origins but Russian wheat could not be offered.
Volumes in Iraq’s tenders are nominal and the country often buys more than sought.
Iraq said on Oct. 17 the country needs to import 5 million tonnes of wheat in 2023, including at least 2 million in the first four months of the new year.
Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 60,000 tonnes of soymeal.
The deadline for submission of price offers in the tender is also Friday, Nov. 4.
The soymeal was sought in one consignment for arrival in South Korea around April 15, 2023.
FAO Food Price Index – November 2022 Update
The United Nations food agency’s world price index edged slightly lower in October, the seventh consecutive monthly fall and some 14.9% down from its all-time high recorded in March.
FAO, indeed, said on Friday that its price index, which tracks the most globally traded food commodities, averaged 135.9 points last month versus a revised 136.0 for September.
The September figure was previously put at 136.3.
The index has fallen from a record of 159.7 in March, but remained 2.0% higher than a year earlier.
The index dipped overall, although the cereal index rose 3.0%, with wheat up 3.2%.
International rice prices increased 1.0%.
That thanks as vegetable oil index which fell 1.6% in October and was down nearly 20% on its year-earlier level.
Rising international quotations for sunflower seed oil were more than offset by lower world prices of palm, soy and rapeseed oils.
Dairy prices also fell 1.7%, meat was down 1.4% and sugar eased 0.6%.
FAO Supply & Demand – November 2022 Update
In separate cereal supply and demand estimates, FAO lowered its forecast for global cereal production in 2022 to 2.764 billion tonnes from a previous 2.768 billion tonnes.
That is 1.8% below the estimated output for 2021.
The month-on-month downward revision almost entirely concerns the wheat crop in the United States.
World cereal use in 2022/23 is expected to surpass production at 2.778 billion tonnes, leading to a projected 2.0% fall in global stocks compared with 2021/22 to 841 million tonnes.
That would represent a stocks-to-use ratio of 29.4%, down from 30.9% in 2021/22 but still relatively high historically, FAO said.
World trade in cereals in 2022/23 was predicted to register a 2.2% contraction to 469 million tonnes.
That’s all, thank you.
We wish you a good day.
Author: Sandro F. Puglisi
