Good morning Farmer Family …
US farm markets were hit on Thursday by a bearish sentiment kicked most commodity prices lower.
Corn prices eased 0.26% lower.
Soybeans incurred double-digit losses, down 0.89% by the close.
Meal prices closed with 0.88% losses, while soy oil went home 0.77% lower.
Wheat prices were mixed but mostly lower.
The Chicago wheat market ended the session 0.72% weaker.
Minneapolis spring wheat closed 0.59% in the red.
But Kansas City HRW contracts bucked the overall trend, testing modest gains of 0.23%.
Macro market signals look bearish.
Disappointing export sales data from USDA and spillover weakness from other commodities triggered down grain prices.
Weekly FAS data, indeed, showed 636.8k MT of corn was sold during the week that ended 12/15.
That was near the low end of trade forecasts ranging from 625,000 to 950,000 tonnes.
Exports were 958.7k MT for a season total of 8.22 MMT.
That is 15.6% of the WASDE forecasted total.
China, Mexico, Japan, Colombia and Nicaragua were the top five destinations.
As for soybean, the report had 736k MT of soybean sales for the week that ended 12/15.
That was down from 2.9 MMT sold last week and was below the expected range, as trade expectations were between 800,000 tonnes to 1.4 million tonnes.
USDA had the weekly export at 1.99 MMT, for a 24.93 MMT.
That is 44.8% of the WASDE forecast.
China, Mexico, Spain, Japan and Israel were the top five destinations.
For the products the FAS data had 311k MT of soymeal sales.
The weekly shipment was 336k MT, for a season’s total of 2.265 MMT. Bean oil bookings were 822 MT.
Total soy oil commitments reached 31,267 MT.
As for wheat, FAS data showed 334,207 MT of wheat was sold during the week that ended 12/15.
That was in line with analysts’ forecasts of 200,000 to 550,000 tonnes.
The export shipments for the week were 235k MT for a 10.24 MMT yearly total.
FAS data had 14.444 MMT of commitments for the season.
South Korea, Japan, Mexico, Honduras and Trinidad and Tobago were the top five destinations.
Meantime, abundant rains will for the first time this cycle bring relief to Argentina’s parched farming heartland in the coming days, the Buenos Aires Grain Exchange said on Thursday.
This historic drought had slowed the planting of the current soybean crop.
Brazilian soybeans, are currently more attractive than U.S. soybeans for February shipments.
The wheat market is watching forecasts for temperatures well below freezing across the U.S. Plains in the coming days, which may threaten winter crops not insulated by snow cover.
However, as Winter Storm Elliot makes its way across the Midwest, most areas east of the Mississippi River will see at least some rain or snow between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA.
In this context, corn basis bids were mostly steady across the central U.S. on Thursday but did trend 5 cents lower at a Nebraska processor and 1 to 5 cents higher across two other Midwestern locations.
Soybean basis bids dropped 5 to 10 cents at two Midwestern processors and picked up a penny at an Ohio elevator while holding steady elsewhere across the central U.S..
Commodity funds were net sellers of CBOT soybeans, wheat, meal, corn and soyoil futures contracts.
On this morning, Chicago soybean futures ticked higher, but the market was set to end the week marginally lower.
Wheat and corn firmed, and both markets are on track for a positive finish this week.
Notabily, the most-active soybean contract on the Chicago Board of Trade added 0.1% to $14.74 a bushel, as of 03:34 GMT, wheat rose 0.5% to $7.65-3/4 a bushel and corn gained 0.1% at $6.61-1/4 a bushel.
For the week, soybeans are down around 0.5%, while wheat has added 1.6% and corn is up 1.3%.
In energy markets, oil prices rose more than $1 on Friday.
Brent crude was up by 73 cents, or 0.9%, to $81.71 a barrel by 07:15 GMT, while U.S. West Texas Intermediate (WTI) crude was at $78.40 a barrel, up 91 cents, or 1.2% higher.
They hit highs of $82.17 and $78.77, respectively, earlier in the session.
On Thursday, oil prices on both sides of the Atlantic had settled lower, as a snow storm in the USA scrappeddued more than 4,400 U.S. flights over a two-day period and could upend motorists’ plans to travel during Christmas and New Year, curbing gasoline consumption.
However, heating oil demand could be boosted as the extreme weather are expected to cause power outages.
U.S. crude stocks fell more than expected in the week to Dec. 16, the Energy Information Administration said, with inventories falling by 5.9 million barrels to 418.2 million barrels versus forecasts for a 1.7 million-barrel drop.
Also, analysts expects a drop in Russian crude supply.
Russia’s Baltic oil exports could fall by 20% in December from the previous month.
Russia may cut oil output by 5%-7% in early 2023 as it responds to price caps on its crude and oil products by halting sales to the countries which support them, the RIA news agency cited Deputy Prime Minister Alexander Novak as saying on Friday.
Thus, both contracts were on track to post a second weekly gain, with Brent up 3.3% and WTI up 5.5%.
However, surging COVID-19 cases, concerns about further rate hikes globally and recession curbing fuel consumption limited oil’s price gains.
In ocean freight markets, the Baltic Exchange’s dry bulk sea freight index fell on Thursday, marking its biggest one-day percentage loss in five weeks, as demand waned across all segments.
The overall index, indeed, lost 73 points, or about 4.2%, to 1,650, its worst day since Nov. 17.
Notabily, the capesize index fell 171 points, or about 6.1%, to 2,626, a day after hitting its highest since July 19.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as coal and steel-making ingredient iron ore, decreased $1,422 to $21,775.
The panamax index fell 35 points, or about 2.2%, to mark its worst day in more than four weeks at 1,563.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, decreased $308 to $14,070.
The supramax index shed 20 points to 1,083.
In equity markets, the S&P 500 fell 1.4% on Thursday after having been down as much as 2.9% earlier in the day.
It closed at 3,822.39.
The Dow Jones Industrial Average fell 1% to 33,027.49 and the Nasdaq closed 2.2% lower, at 10,476.12.
The Russell 2000 index dropped 1.3% to 1,754.09.
Good economic data should be positive for markets when recession may be looming, but the reports Thursday suggested the Federal Reserve may need to keep hiking interest rates and keep them high to curb inflation.
High-growth technology stocks have taken some of the year’s worst hits because they’re seen as some of the most vulnerable to rising rates.
Chipmaker Nvidia slumped 7%.
Electric vehicle maker Tesla tumbled 8.9%, bringing its loss for the year to around 64%.
Worries are rising broadly about corporate profits across industries, which are contending with the weight of higher interest rates.
The housing industry and other areas of the economy whose fortunes are closely tied to low interest rates are suffering.
On this morning, shares declined in Asia in the wake of Wall Street.
Shanghai was flat while other major indexes declined.
Notabily, Tokyo’s Nikkei 225 index lost 1% to 26,242.58 and the Hang Seng in Hong Kong shed 0.5% to 19,578.44.
The Shanghai Composite index was unchanged, at 3,054.52 and Australia’s S&P/ASX 200 declined 0.7% to 7,099.70.
In Seoul, the Kospi dropped 1.4% to 2,323.09.
Shares also fell in Bangkok, Mumbai and Taiwan.
Trading is winding down with the approach of Christmas and New Year holidays.
Japan reported its core inflation rate, excluding volatile fresh foods, rose to 3.7% in November, the highest level since 1981.
That add pressure on the Bank of Japan to adjust its own policies that have kept interest rates ultra-low to spur growth.
Recession in coming months remains the greater concern.
In currency trading, the U.S. dollar rose to 132.64 Japanese yen from 132.38 yen.
The euro strengthened to $1.0607 from $1.0597.
From South America, farmers from Mato Grosso, Brazil’s top grain producing state, started harvesting the 2022/2023 soybean crop, farmer group Imea said on Thursday.
The work is still in its early stages, with less than 1% of the state’s total planting area already harvested, said the group.
Meantime, abundant rains will for the first time this cycle bring relief to Argentina’s parched farming heartland in the coming days, the Buenos Aires Grain Exchange said on Thursday.
“The passage of a storm front will produce rain across most of the agricultural area, bringing effective relief for the first time this season,” the exchange said in its weekly weather report, forecasting between 50 and 75 millimeters in rainfall.
It added that the rains would allow farmers to finish sowing 200,000 hectares of soybeans in the fertile Pampas plains.
Farmers have so far planted 60.6% of a planned 16.7 million hectares, putting them 12.6 percentage points behind their progress this time last year due to the dry soil, it said.
Corn planting for the 2022/23 cycle has meanwhile fallen 8.4 percentage points behind last year’s level, with 51.8% of an estimated 7.3 million hectares sown.
The country’s estimated 12.4 million tonne wheat harvest is meanwhile 78.3% complete, it added.
In Europe, very little change yesterday on Euronext as markets tightened in the run-up to the festive season.
Meantime, the European Commission trimmed its estimates for 2022/23 EU corn production to 52.1 Mt from 53.3 Mt estimated last month after suffering through an abundance of hot, dry weather.
That makes this year’s crop the smallest in more than a decade, and its sharply below initial estimates, made back in June.
The Commission, has also slightly lowered its estimates for 2022/23 EU soft wheat production to 126.4 Mt.
In the meantime, the group said its projection for EU soft wheat exports this marketing year were steady, at 34 MMT.
Only rapeseed production has been revised upwards, to 19.6 Mt compared to 19.4 Mt estimated last month.
From the Black Sea basin, despite the delayed winter planting campaign in Ukraine due to weather conditions (prolonged rainfall), as of December, up to 65% of crops are in good and excellent condition, Ukrhydrometcenter said.
This is an average figure, therefore the weather factor did not critically affect the crops’ conditions, the Ministry of Agrarian Policy of Ukraine reported on December 22.
Crops, even poorly developed (in the seedling phase), amount of which were higher this autumn, were characterized by even development.
However, given the development phases, the dependence of winter crops on the weather conditions will be very significant.
According to the agrometeorological surveys of winter crop crops conducted in the second half of November, 30-40% of crops have reached mass tillering, which is the most favorable for wintering.
According to a visual assessment, plants entered the winter in good and excellent condition on 65% of the examined fields (56% in 2021), the condition of plants was satisfactory on 28% (35%) of the area.
Plant were poorly developed (did not reach a phase of development safe for wintering) on 7% (9%) of the area.
On the international trade scene, as expected, Japan purchased 144,441 t of food-quality wheat from the United States and Canada in a regular tender.
Of the total, 49% was sourced from the U.S. The grain is for shipment beginning in mid-January.
Iraq accepted the first batch of Russian wheat 26.3 KMT (private contract).
Vessel was unloaded on Dec 19.
That’s all, thank you.
We wish you a good day.
Author: Sandro F. Puglisi
