Good morning Farmer Family …
US farm markets, shifted back into the green yesterday by the close.
Corn prices tracked 1.45% higher.
Soybeans were up 1.16%.
Meal prices ended with gains nearly 1%.
Bean oil prices closed with 0.92% gains.
Wheat gains were variable, as Dec SRW was up 1.19%, Kansas City wheat ended 0.71% higher, and Minneapolis spring wheat ended the day 1.14% stronger.
Two large flash sales lent some fresh export optimism.
Notabily, private exporters reported to the USDA having sold 230,185 metric tons of corn for delivery to Mexico during the 2022/2023 marketing year, and 261,272 metric tons of soybeans for delivery to Mexico during the 2022/2023 marketing year.
But it was the news (as yet unconfirmed) that one Russian missiles landed in Poland that added more fuel to the fire.
An explosion in a village in eastern Poland near the Ukraine border that killed two people, indeed, raised the possibility that the Russian-Ukraine conflict could spill over.
Early the session and for the most part of it, markets were mostly quite, or in a retreat mode.
Signs of progress in talks to extend the export deal for Ukrainian crops had earlier pressured grain prices.
Moscow is likely to allow the corridor deal to be renewed after its initial duration expires on Nov. 19.
And about this, the Kremlin’s spokesman later said Russia would announce its decision “at the appropriate time”.
Meantime, the monthly U.S. soybean crush rose in October and matched an average of analyst estimates, while soyoil stocks rose for the first time in eight months, according to National Oilseed Processors Association (NOPA) data released on Tuesday.
Notabily, NOPA members, crushed 184.464 million bushels of soybeans last month, up from the 158.109 million bushels processed in September and up from the October 2021 crush of 183.993 million bushels.
NOPA’s crush figure of 184.464 million bushels exactly matched the average estimate from analysts.
Soy oil supplies among NOPA members as of Oct. 31 rose to 1.528 billion lbs, up from 1.459 billion lbs at the end of September but down from 1.834 billion lbs a year ago.
Soyoil supplies at the end of October were expected to have climbed to 1.535 billion lbs.
USDA said will permanently include updated acreage estimates for corn, soybeans, sorghum and sugarbeets in its monthly U.S. crop production reports every September, a month earlier than in most prior years.
The USDA will not release acreage adjustments for those crops in October or November, unless unusual circumstances, such as a weather event, require revisions.
Meantime, private analytics firm IHS Markit Agribusiness, projected an increase in U.S. corn plantings for 2023.
Notabily the firm projected U.S. 2023 corn plantings at 91.968 million acres, up some 25,000 acres from its October forecast and up from the 88.608 million acres farmers planted in 2022.
The firm also estimates that 2023 U.S. soybean plantings will reach 88.515 million acres, which would be more than a million acres higher than 2022’s tally of 87.455 million acres, if realized.
IHS Markit pegged all-wheat plantings in the U.S. for the 2022/23 season at 47.178 million acres.
that was moderately higher than year-ago results of 45.738 million acres.
Also, the firm underlined the split between winter wheat and spring wheat plantings at 33.946 million acres and 11.450 million acres, respectively.
In this context, corn basis bids were steady to mixed across the central U.S. on Tuesday after moving as much as 20 cents higher at an Iowa processor and as much as 11 cents lower at an Illinois ethanol plant.
Soybean basis bids trended 5 to 8 cents higher at two interior river terminals and 15 cents higher at an Indiana processor while holding steady elsewhere across the central U.S..
Commodity funds were net buyers of CBOT corn, wheat, soybean, soymeal and soyoil futures contracts.
On this morning, Chicago wheat slid for the first time in four sessions, retreating from previous day’s one-week high.
Soybeans and corn prices also eased after closing higher on Tuesday.
Particularly, the most-active wheat contract on the Chicago Board of Trade was down 1.5% at $8.15-3/4 a bushel, as of 04:02 GMT, after climbing to its highest since Nov. 8 at $8.43 a bushel on Tuesday.
Soybeans lost 0.6% to $14.48 a bushel and corn gave up 0.7% to $6.62-1/4 a bushel.
The missile that killed two people in Poland was probably not fired from Russia, U.S. President Joe Biden said on Wednesday after holding talks with leaders of Western allies.
Russia wants no disruption of global food security efforts, deputy foreign minister said.
Thus, grain prices are under pressure, as the market is expecting Ukrainian exports to continue and the deal is likely to be extended.
In energy markets, oil prices slid on Wednesday as COVID-19 cases in China continued to climb.
Brent crude futures, indeed, dropped by 33 cents, or 0.4%, to $93.53 a barrel by 07:37 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 44 cents, or 0.5%, to $86.48 a barrel.
Both benchmarks fell more than $1 earlier in the session, after gainig 0.77% and 1.22% respectively in the previus session due to geopolitical tensions.
Oil prices settled higher on Tuesday after oil supply to parts of Eastern and Central Europe via a section of the Druzhba pipeline was temporarily suspended, according to oil pipeline operators in Hungary and Slovakia.
The disruption came concurrent with the explosion in a village in eastern Poland near the Ukraine border that killed two people and raised the possibility that the Russian-Ukraine conflict could spill over.
But after the initial “knee-jerk rally in oil prices, we had a tepid market.
U.S. President comments helped to ease immediate escalation worries.
In China, rising COVID-19 cases are weighing on sentiment.
The International Energy Agency (IEA) forecasted demand growth to slow to 1.6 million bpd in 2023 from 2.1 million bpd this year.
OPEC cut its forecast for 2022 global oil demand growth for a fifth time since April citing mounting economic challenges.
However, industry data showed a bigger-than-expected drop in U.S. crude stockpiles.
U.S. crude oil inventories, indeed, fell by about 5.8 million barrels for the week ended Nov. 11, according to market sources citing American Petroleum Institute figures.
Analysts were expected that crude inventories dropped by about 400,000 barrels.
That provided some support to oil prices, although producer prices increased less than expected in October.
In ocean freight markets, the Baltic index on Tuesday fell for a fourth straight session to its lowest in more than a week, weighed down by weakness in the capesize and supramax vessels.
The overall index, indeed, lost 25 points, or about 1.9%, to 1,300, its lowest since Nov. 3.
Particularly, the capesize index fell 75 points, or about 5.2%, to 1,371, its lowest in more than a week.
Average daily earnings for capesize, which typically transport 150,000-tonne cargoes of coal and steel-making ingredient iron ore, decreased $624 to $11,371.
The panamax index gained 14 points, or 0.8%, to 1,681, highest since Nov. 7.
Average daily earnings for panamax, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, rose $128 to $15,131.
The supramax index extended its decline for a 17th straight session, falling 11 points to 1,186.
In equity markets, on Wall Street, stocks finished higher following more signs the nation’s high inflation may be falling off faster than expected.
Thus, the S&P 500 climbed 0.9%, or 34.48 points, to 3,991.73.
The Dow Jones Industrial Average closed at 33,592.92, up 56.22 points, or 0.2%.
The Nasdaq composite led the market with a gain of 1.4%, or 162.19 points, to close at 11,358.41.
early in the session, Wall Street opened higher.
The meeting between the US and China presidents raised hopes for an easing of U.S.-Chinese tension after analysts called it better than expected.
Meanwhile Treasury yields eased on hopes a slowdown in inflation could mean the Federal Reserve’s bitter, could taper as well its action.
Thus, the yield on the two-year Treasury fell to 4.34% from 4.40% late Monday.
The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.76% from 3.85%.
In this context, technology stocks continued to lead the way.
Chipmaker Nvidia rose 2.3%, and Apple gained 1.2%.
Walmart jumped 6.5% after reporting strong financial results.
Wall Street will get a broader update on retail sales Wednesday when the government releases its report for October.
On this morning, Asian shares were mostly lower, as investors got jittery over global risks after initial news from Poland.
Benchmarks fell in morning trading in Tokyo, Sydney, Seoul and Hong Kong, while shares were little changed in Shanghai.
Ukrainian President Volodymr Zelenskyy decried the blast as “a very significant escalation” of the war.
President Joe Biden, in Indonesia for the Group of 20 summit, promised “full U.S support for and assistance with Poland’s investigation.”
Thus, Japan’s benchmark Nikkei 225 lost 0.2% in morning trading to 27,924.63.
Australia’s S&P/ASX 200 slipped 0.3% to 7,121.60.
South Korea’s Kospi shed 0.3% to 2,472.97.
Hong Kong’s Hang Seng fell nearly 0.2% to 18,308.00, while the Shanghai Composite was little changed, inching up less than 0.1% to 3,135.88.
However, details were unclear, including who fired the missile.
Three U.S. officials said preliminary assessments suggested the missile was fired by Ukrainian forces at an incoming Russian missile.
The Polish government said it was investigating.
U.S. President Joe Biden’s commented that the missile was probably not fired from Russia.
As a result, Japan’s benchmark Nikkei 225 rose 0.1% to finish at 28,028.30.
Australia’s S&P/ASX 200 slipped 0.3% to 7,122.20.
South Korea’s Kospi shed 0.1% to 2,477.45.
Hong Kong’s Hang Seng fell 0.5% to 18,256.48, while the Shanghai Composite dipped 0.5% to 3,119.98.
Among other news, Japan’s Cabinet Office reported that seasonally adjusted core machinery orders fell 4.6% in September from a month earlier.
The data for private-sector orders excluding those for ships and power equipment, closely watched as a leading indicator of corporate capital spending, fell 5.8% in August on-month.
Meantime, European stock benchmarks mostly edged higher in early trading.
France’s CAC 40 edged up 0.1% in early trading to 6,650.25, while Germany’s DAX slipped nearly 0.2% to 14,354.27.
Britain’s FTSE 100 gained 0.3% to 7,388.77.
Traders, however, are waiting for further developments on the geopolitical front for direction for risk assets.
Any signal of escalation in the volatile situation could see a reaction across markets.
In currency trading, the U.S. dollar edged up to 139.39 yen from 139.27 yen.
The euro cost $1.0402, up from $1.0349.
Going back to the analysis of the other agricultural markets …
From South America, Argentine farmers’ soybean sales last week reached 72.2% of the 2021/22 harvest of the crop, data from the Agriculture Ministry showed on Tuesday.
That was slightly behind the 74.2% sold at the same point last year.
Particularly, farmers sold about 249,300 tonnes of soy from Nov. 3-9, down by nearly half compared with the same week during the previous season, the data showed.
Argentina’s 2021/22 soy harvest is estimated at 44 million tonnes.
Argentine farmers have also sold 70.4% of the 59 million-tonne 2021/2022 corn crop, according to the ministry, about 2 percentage points down from sales notched during the same period in the previous season.
In Europe, grain and oilseed markets eased yesterday.
The strength of the euro, coupled with the prospect of an extension of the agreement on the corridor from Ukraine, inevitably led to a situation of price downward correction.
Wheat price for December contract, closed at its lowest level since September.
Ditto for corn, with prices trading at their lowest since August.
This downward movement was also observed in rapeseed, with the February contract now trading below 625 €/t.
And the decline in rapeseed, dragged down also other oilseeds, especially sunflower.
The very good export figures for wheat from Europe since the beginning of the season, communicated by the European Commission, have not provided support to the market.
Notabily, European Union soft wheat exports so far in the 2022/23 season have reached 13.35 million tonnes, now nearly 10% ahead of last year’s pace following a large volume last week, data published by the European Commission showed on Tuesday.
The total from the start of the season on July 1 until Nov. 13 was 9.5% above the 12.19 million shipped by the same week in 2021/22.
It also marked a bigger than usual 830,000 tonne weekly increase compared with the running total reported in the Commission’s previous report.
A breakdown of the EU data showed France remained the leading EU soft wheat exporting country this season, with 5.46 million tonnes shipped, followed by Romania with 1.70 million tonnes, Germany with 1.56 million tonnes, Latvia with 1.14 million tonnes and Poland with 1.07 million tonnes.
The Commission listed the EU’s top five soft wheat export destinations by Nov. 6.
Algeria with 1,881,654 t, represents 14.1% share, Morocco with 1,727,742 t a 12.9% share, Egypt with 1,495,729 t a 11.2% share, Nigeria with 996,809 t a 7.5% share, Saudi Arabia with 720,973 t a 5.4% share.
Meantime, importers in China have bought two cargoes of French wheat in the past week for shipment between January and March.
That is adding to large sales this season for lower-protein French crop.
The sales, thought to have taken place between late last week and early this week, comprised two panamax cargoes of about 60,000 tonnes each.
The wheat was believed to have protein content in the 10-10.5% range.
Chinese buyers booked several hundred thousand tonnes of French crop in July and August for shipment before the end of 2022.
Port data compiled by Refinitiv shows that about 300,000 tonnes have already been loaded.
Meantime, EU barley exports so far in 2022/23 totalled 2.69 million tonnes, down nearly 39% from 4.38 million a year ago, the data showed.
EU maize imports so far in 2022/23 were at 10.85 million tonnes, more than double a year-earlier volume of 4.77 million.
Spain was the leading EU maize importer so far in 2022/23 with 4.18 million tonnes, ahead of the Netherlands at 1.19 million, Poland with 907,000, Portugal with 877,000, and Italy with 781,000, the data showed.
The next-largest EU maize importer was Hungary with 632,000 tonnes, in a sign of the drought impact on the regular maize exporter.
The Commission listed the five top maize import origins so far in 2022/23.
Brazil with 5,699,541 t represents a 52.5% share, Ukraine with 4,422,673 t a 40.8% share, Serbia with 285,727 t a 2.6% share, Canada with 139,620 t a 1.3% share, South Africa with 78,494 t a 0.7% share.
EU soybean imports, meantime, have reached 3.98 MMT through November 13, which is moderately below last year’s pace so far.
EU soymeal imports are also trending fractionally lower year-over-year, meantime, with 5.91 million metric tons during the same period.
From the Black Sea basin, Russia launched a widespread missile attack on Ukraine yesterday, one of the broadest aerial assaults since the war began.
Kyiv and Kharkiv were among the major cities hit.
Roughly 100 Russian missiles were aimed primarily at Ukraine’s electrical infrastructure, but Ukraine said it had shot 70 down.
It seems the remains of a Russian missile that may have been shot down by Ukraine have hit a Polish farm killing two people, local media reported.
There has been no official confirmation but as Poland is part of NATO this could be a different escalation.
Russia is denying any involvement.
Turkish President Tayyip Erdogan said on Wednesday that he respects Russia’s statement that Russian missiles had not hit Polish territory, adding that he believes Moscow had “nothing to do with it.”
Prior to all of the above happening the Russian Foreign Minister told reporters at the G20 summit in Bali yestersay that the United Nations had told him of written US and EU promises to remove the obstacles that are hindering Russia’s ability to export grains and fertilisers.
On this morning, Russia spoke in favour of the Black Sea grain deal extension at the G20 summit, on condition that supplies to countries in need are controlled, the Russian finance minister Anton Siluanov said.
Russian Foreign Minister Sergei Lavrov said at the summit “that we are in favour of continuing the grain deal, but we are in favour of ensuring that the grain supplied under the Black Sea arrangements goes specifically to countries that need the grain, rather than to Western countries and countries with European economies, as is currently the case”.
“We therefore spoke in favour of continuing this deal under the control of the grain supply destinations, so that this grain goes to the countries that are really in need,” Siluanov added.
From Ukraine, the agriculture ministry said this week that 2022/23 winter grain sowing was 92% complete at 4.4 million hectares and the acreage included 3.7 million hectares of winter wheat, accounting for 93% of the expected area.
Ukrainian winter grain and rape crops sown for the 2023 harvest are in satisfactory and good condition, the state-run meteorological centre said on Wednesday.
The meteorological conditions of the first ten days of November were satisfactory for the vegetation of winter crops.
Sunny weather at the beginning of the month and a gradual decrease in temperature had created “favourable conditions” for the hardening of plants.
Meantime, the country has exported almost 15.6 million tonnes of grain so far in the 2022/23 season, down 30.8% from the 22.5 million tonnes exported by the same stage of the previous season, agriculture ministry data showed on Wednesday.
The volume included almost 6 million tonnes of wheat, 8.3 million tonnes of corn and 1.3 million tonnes of barley.
Ministry data showed that 2.36 million tonnes of various grains were exported in the first half of November, 22.4% less than in the same period in November 2021.
From Australia, markets again remained largely unchanged on the boards yesterday with still so much uncertainty on the East Coast.
Jan ASX wheat futures settled a fraction lower valued at $469.30/mt
The forecast is not looking great for South Australia and Victoria, with showers expected over the next eight days.
The forecast is better for New South Wales and southern Queensland with lower total rainfall expected.
Any rainfall at the moment will add to the dire situation many are in.
On the international trade scene, Japan is seeking 95,000t of wheat for late February arrival in its regular weekly tender, including 35,000t from the US and 60,000t from Canada.
Five trading companies are believed to be taking part in the international tender from Jordan’s state grains buyer to purchase 120,000 tonnes of wheat which closed on Tuesday.
Participants were believed to be CHS, Cargill, Viterra, Ameropa and Buildcom.
No purchase has been made.
That’s all, thank you.
We wish you a good day.
Author: Sandro F. Puglisi
