Good morning Farmer Family …
US farm markets were mixed but mostly lower on Monday.
Corn prices closed 0.22% higher.
Soybeans faded 0.70% lower, with soymeal weaker by 1.51%.
Soybean oil, in contrast, went home up by 0.42%.
Wheat markets were also variable, with Chicago and Minneapolis down 0.86% and 0.43% respectively, while Kansas City was up 0.34%.
The surge in US dollar caused Euro-denominated prices to gain yesterday.
Corn prices remained barely firm after private exporters reported to the USDA having sold 111,800 metric tons of corn for delivery to Japan during the 2022/2023 marketing year and 200,000 metric tons of corn for delivery to Mexico.
As for Mexican sale, of the total, 100,000 metric tons is for delivery during the 2022/2023 marketing year and 100,000 metric tons is for delivery during the 2023/2024 marketing year.
However, weekly export inspections data showed 480,205 MT of corn was shipped during the week that ended 2/02.
That was a drop of 62,784 MT for the week and was 55% below the same week last year.
The accumulated corn shipments remain 33% behind last year’s pace with 12.5 MMT shipped MYTD.
Meantime, U.S. farmers are planning to boost corn acreage in 2023, eyeing lower prices of fertiliser needed to grow the crop and hoping for a bumper crop.
As for soy complex, profit takings on soymeal and anxiety over whether last week’s Chinese spy balloon debacle will cool trade moving forward, has dragged down the soy market.
USDA reported 1.83 MMT of soybean exports for the week that ended 2/02.
That was just under 1.93 MMT last week, although up 589k MT from the same week last year.
However, China was the main destination, with 63% of the total.
The accumulated soybean shipments were at 37.9 MMT, now ahead of last year’s pace by 209k MT.
Meantime, investors were waiting for news about the size of the crops in South America before pushing prices too far in either positive or negative directions.
As for wheat, prices dropped despite weekly export inspections exceded expectations, as forecasts for rain in both the U.S. Midwest, the principal growing area for soft red winter wheat, and the U.S. Plains, where the bulk of the hard red winter wheat crop is grown, have weighened on the market.
Weekly Export Inspection data indeed showed 536,355 MT of wheat was exported during the week that ended 2/02.
That was up from 446k MT last week, and was 102k MT above the same week last year.
The accumulated wheat export was at 13.759 MMT as of 2/02, trailing last year’s pace by 291k MT.
In this context, corn basis bids were largely steady across the central U.S. on Monday but did shift 2 cents lower at an Iowa processor.
Soybean basis bids were mostly steady across the central U.S. but did tilt 2 cents higher at an Illinois river terminal.
Commodity funds were net sellers of Chicago Board of Trade soybean, soymeal and wheat futures contracts.
Meanwhile they were net buyers of corn and soyoil futures.
On this morning, soybean prices inched higher, as harvest progress slowed in top exporter Brazil due to continued heavy rains in key producing regions.
Wheat reversed earlier gains, while corn edged lower.
Notably, the most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.1% at $15.23-1/4 a bushel, as of 04:58 GMT.
Wheat lost 0.3% to $7.48-1/4 a bushel and corn gave up 0.2% to $6.77-1/2 a bushel.
Meantime, traders await the rapidly approaching WASDE report, which the agency will deliver on Wednesday.
In energy markets, oil prices rose for a second straight session on Tuesday.
Brent crude futures, indeed, were up $1.74, or 2.15%, to $82.73 per barrel by 08:04 GMT, while West Texas Intermediate U.S. crude futures rose $1.70, or 2.29%, to $75.81 per barrel.
Crude prices are rising on expectations that China’s recovery will take hold.
Also, supply outages from the earthquake that devastated Turkey, are supporting prices.
Operations at Turkey’s 1 million barrel per day (bpd) oil export terminal in Ceyhan were halted.
The BTC terminal, which exports Azeri crude oil to international markets, will be closed until Feb. 8.
In this context, Saudi Arabia raised prices for its flagship crude for Asian buyers for the first time in six months.
In ocean freight markets, the Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, fell to the lowest in nearly three years, pressured by weaker rates across vessel segments.
The overall index, indeed, fell 13 points, or about 2.1%, to 608, its lowest since early-June 2020.
Notably, the capesize index lost 10 points, or about 2.3%, to over a five-month low of 419.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down $86 at $3,475.
The panamax index lost 33 points, or about 3.5%, at 907, its lowest since June 15, 2020.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, fell by $297 to $8,159.
Among smaller vessels, the supramax index fell 2 points to 680.
In equity markets, on Wall Street, the benchmark S&P 500 index fell 0.6% to 4,111.08.
The Dow Jones Industrial Average lost 0.1% to 33,891.02 and the Nasdaq composite tumbled 1% to 11,887.45.
The yield on the two-year Treasury, which tends to track expectations for the Fed, leaped by an unusually wide margin to 4.47% from Friday’s 4.29% and the previous day’s 4.1%.
The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, jumped to 3.64% from 3.52% late Friday.
Friday’s employment data showed the U.S. economy added twice as many jobs as expected last month despite higher interest rates.
That is good for workers but the Fed worries wage gains will push up inflation.
On this morning, Asian stock markets rebounded.
Traders were looking ahead to a planned speech by Fed Chair Jerome Powell in Washington for possible clues about interest rate plans.
Thus, the Nikkei 225 in Tokyo gained 0.2% to 27,754.36.
The Shanghai Composite Index rose 0.2% to 3,244.55 and the Hang Seng in Hong Kong advanced 1% to 21,422.97.
The Kospi in Seoul added 0.6% to 2,453.80 and Sydney’s S&P-ASX 200 was up less than 0.1% at 7,541.60.
New Zealand and Singapore declined while Jakarta advanced.
In currency trading, the dollar fell to 132.17 Japanese yen from 132.67 yen.
The euro rose to $1.0744 from $1.0728.
Going back to analyzing the other agricultural markets …
From South America, agribusiness consultancy in Brazil, AgRural, estimated 2022-23 soybean harvest at 9pc complete this week, up from 5pc last week but below 16pc last season.
Notably, Brazilian farmers have harvested more than 14 million tonnes of soybeans so far.
However, some areas of Brazil remain too wet, slowing down harvest progress.
Those volume would been greater, if it not been for rains disrupting the work of harvesters.
Meantime, Argentina is unlikely to see any rains over the next five days, but chances will improve into the weekend and scattered rains are still forecast for next week, although it is difficult to be confident that enough rains will fall to ease crop concerns, as forecast models have been flip-flopping recently.
Hot and dry weather has returned to Argentina and will continue this week.
Crops have had a boost in conditions the last couple of weeks, but the heat and dryness this week will likely have a negative impact.
In Europe, prices rebounded yesterday as the market is benefiting from the fall in the euro against the dollar.
However, activity on the physical market is somewhat sluggish.
Slovakia has reported an outbreak of the highly pathogenic H5N1 bird flu virus on a farm in the western part of the country, the Paris-based World Organisation for Animal Health said on Monday.
The outbreak near the town of Galanta killed 1,530 poultry birds out of a flock of 5,665, the Paris-based body said, quoting information from Slovakian health authorities.
In other news, nitrogen fertilizer prices continue to crumble, meantime.
From Ukraine, Ag Ministry expects the 2023 grain harvest will be 45-50 MMT, down from 2022’s 53.2 MMT grain crop – itself includes ~9% of unharvested corn in the fields.
Meantime, the Ukraine Ag Ministry reported cumulative 2022-23 exports of 27.7Mt as of 6 Feb, compared with 39.2Mt a year earlier
The total included 9.9Mt wheat, down 42pc compared to previous year,1.8Mt barley, down 67pc and 15.9Mt corn, down 1.5pc.
Meantime, last week the indicative FOB prices of Ukrainian corn in the ports of the Black Sea and purchasing prices of traders in seaports strengthened somewhat, supported by higher export pace compared to other crops and the gradual recovery of Chinese demand after the New Year holidays.
However, the trend was short-term and had an insignificant effect on the general price situation.
Thus, the indicative prices of corn for supply in February from Black Sea ports strengthened somewhat and reached 255-280 USD/t FOB.
The purchasing prices of traders in the ports of Great Odesa and the Danube rose to 190-220 USD/t CPT-port against 190-210 USD/t CPT-port a week earlier.
In Russia, weather conditions continue to affect this year’s crop estimates.
On this wake, IKAR has lowered its preliminary wheat crop estimate to 84 million tonnes from 87 million tonnes.
Sovecon, however, is maintaining its forecast at 86 million tonnes for now, though notes that dry weather is becoming an increasing problem for the crop in the south.
Russian wheat exports were close to record levels in January.
According to Sovecon, Russia exported up to 3.8 million tonnes of wheat last month, compared with an average for the month of 2.7 million tonnes.
In total, Russia may export 30-35 million tonnes of grain in the second half of the 2022/23 agricultural year, according to the agricultural ministry.
However, Russian wheat prices fell last week as a record harvest and record wheat stocks helped keep supplies high.
Also, “demand is quite stagnant”, according to the IKAR head Dmitry Rylko.
Thus, prices for Russian wheat with 12.5% protein content, delivered free on board (FOB) from Black Sea ports, were down $7 last week to $297 per tonne, the IKAR agriculture consultancy said.
As for other products, price for domestic 3rd class wheat, European part of Russia, excludes delivery was at 12,600 rbls/t +175 rbls/t (Sovecon).
Price for sunflower seeds was at 28,150 rbls/t +1,350 rbls/t (Sovecon).
Price for domestic sunflower oil was at 78,750 rbls/t +250 rbls/t (Sovecon).
Price for domestic soybeans was at 33,600 rbls/t +1,000 rbls/t (Sovecon).
Export price for sunflower oil was at $1,160/t +$30 oil (Sovecon).
Price for white sugar, Russia’s south was at $722.44/t -$0.83 (IKAR)
($1 = 70.68 roubles).
From Australia, local markets continued to lift across the board yesterday.
Wheat, barley and canola all were firmer to kick off the week.
The ASX eastern Australia wheat March 2023 contract was up a buck, reaching A$382/t at settlement.
Clear Grain Exchange also had another busy day with 93,000t trading.
The ex-farm market for wheat lifted slightly, parcels in southern NSW gaining traction.
Australian Minister for Trade and Tourism, Don Farrell, met virtually yesterday with the Chinese Minister of Commerce, Wang Wentao. There was no immediate movement on Chinese tariffs on Australia products, however Minister Farrell accepted an invitation to visit Beijing in the near future and said both parties agreed to enhance dialogue at all levels, as a pathway towards the timely and full resumption of trade.
Minister Farrell in a statement said the discussion covered a range of trade and investment issues, including the need for resumption of unimpeded trade for Australian exporters so that Chinese consumers could continue to benefit from high quality Australian products.
On the international trade scene, Korea Feed Association (KFA) purchased 126,000 tonnes of feed corn, including 60,000 tonnes from South America, at US$337.17/t c&f, and 66,000 tonnes from optional origins, at $336.60/t c&f, for Feb/Mar shipment.
South Korea’s Major Feedmill Group (MFG) has purchased an estimated 138,000 tonnes of animal feed corn to be sourced from South America and optional origins in an international tender on Tuesday.
One consignment was bought at an estimated $339.50 a tonne c&f plus a $1.20 a tonne surcharge for additional port unloading, trading house Sierentz was believed to be the seller.
A second consignment was bought at an estimated $339.83 a tonne c&f including a surcharge for additional port unloading.
Trading house Cofco was believed to be the seller.
The tender sought May arrival in South Korea.
That’s all, thank you.
We wish you a nice day.
Author: Sandro F. Puglisi
