Good morning Farmer Family …
US farm markets were mixed again on Tuesday.
Corn prices faded 0.74% lower and soybean was trimmed by 0.39%.
The meal market continued its decline with another 1.55% loss.
Soybean oil, in contrast, bounced 2.66%.
Wheat prices were mixed again with Chicago SRW, and MGEX down 0.07% and 0.03% respectively, while Kansas City HRW jumped 1.11% higher.
Corn and soybean prices fell as investors squared positions ahead of the Feb WASDE report.
Traders are focused on the size of the corn and soybean harvests in Argentina.
Normally February WASDE report is a benign report, however Argentina is going to be kind of the wild card.
Wheat prices were mixed.
Kansas City hard red winter wheat contracts rose on concerns about tight supplies of high protein wheat and fresh forecasts for dry weather in key production areas of the U.S. Plains.
But the most-active Chicago Board of Trade soft red winter wheat contracts and Minneapolis spring wheat were weaker on prospects for a strong crop in the U.S. Midwest and concerns about U.S. supplies struggling to find traction on the export market.
Monthly export data from Census confirmed the December corn export was 3.69 MMT.
That set the MYTD pace at 10.83 MMT officially through the first 4 months.
DDGS shipments were reported at 887,433 MT, a 22% increase from November but a 5% lower volume yr/yr.
Ethanol exports were down 38% from December ’21 and were 9% lower mo/mo with 74.16m gallons shipped.
As for soybean, data showed the official Dec soybean export was 8.295 MMT.
That was a 2.3% increase from Dec ’21 and set the MY total at 29.86 MMT through the first 4 months.
For the products, the data had 1.196 MMT of meal exports and 15.7k MT of soy oil exports.
As for wheat, report confirmed 1.079 MMT of wheat was shipped in December.
That was the lowest volume on record for the month since reporting began in 1967 and was the lowest for any month since October of ’71.
The MY total was 12.45 MMT through December.
The U.S. Department of Agriculture’s (USDA) World Agricultural Supply and Demand Estimates report to be released later in the day is expected to provide a fresh update on its view of the damage done to harvest prospects in South America.
Analysts expect Argentina’s corn production estimates to trend moderately lower, with 48.49 MMT.
In contrast, analysts think USDA will slightly raise Brazilian corn production estimates to 125.17 MMT.
Analysts expect to see Argentina’s soybean production face a moderate shift lower, to 42.35 MMT.
Analysts expect to see Brazil’s soybean production trend fractionally higher, to 152.01 MMT – a record, if realized.
As for wheat, estimates are looking for global wheat stocks to be reported at 268.8 MMT, which would be 400k MT looser if realized.
In this context, corn basis bids were steady to mixed across the central U.S. on Tuesday after firming 4 cents at two Midwestern river terminals while tracking 3 cents lower at an Iowa processor.
Soybean basis bids trended 2 cents lower at an Illinois river terminal and 10 cents lower at an Indiana processor while holding steady elsewhere across the central U.S..
Commodity funds were net sellers of CBOT corn, soybean and soymeal futures contracts.
Meanwhile they were net buyers of soyoil and even in wheat.
On this morning, Chicago soybean, wheat and corn futures edged higher in Asian trading.
Notably, the most-active soybean contract on the Chicago Board of Trade was up 0.3% at $15.20 a bushel, as of 05:24 GMT.
Wheat gained 0.2% to $7.51 a bushel and corn edged up 0.2% to $6.75 a bushel.
In energy markets, oil rose for a third straight day on Wednesday.
Notably, Brent crude rose 99 cents, or 1.2%, to $84.68 a barrel by 09:12 GMT.
U.S. West Texas Intermediate (WTI) crude climbed 93 cents, or 1.2%, to $78.07.
Brent crude gained 3.3% in the previous session, while WTI jumped 4.1%.
Comments from U.S. Federal Reserve Chair Jerome Powell on Tuesday were seen as less hawkish than feared.
That boosted risk appetite and weighed on the dollar.
A weaker dollar makes oil cheaper for other currency holders.
On supply, OPEC+, decided last week to keep output curbs in place, and an Iranian official said on Wednesday the group would likely continue its current policy at its next meeting.
Also, the earthquake that struck Turkey and Syria on Monday stopped crude flows from Iraq and Azerbaijan out of Ceyhan, although Iraq’s pipeline to the Ceyhan export hub resumed flows on Tuesday.
Adding further support was weekly inventory data from the American Petroleum Institute industry group, which showed crude stocks fell by about 2.2 million barrels in the week ended Feb. 3.
However, gasoline and distillate inventories rose more than expected, with gasoline stocks up by about 5.3 million barrels and distillate stocks, which include diesel and heating oil, up by about 1.1 million barrels.
In ocean freight markets, the Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, fell for the fifth straight session, dragged by weaker rates in panamax and supramax segments.
The overall index, indeed, fell 7 points, or about 1.2%, to 601, its lowest since early-June 2020.
Notably, the capesize index snapped its 15-day long losing streak, gaining 24 points, or about 5.7%, to 443.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were up $202 at $3,677.
The panamax index lost 40 points, or about 4.4%, to 867, its lowest since June 12, 2020.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, fell by $353 to $7,806.
The supramax index fell 13 points to 667.
In equity markets, on Wall Street, the S&P 500 rose to 4,164.00 and the Dow gained 0.8% to 34,156.69.
The Nasdaq jumped 1.9% to 12,113.79.
Powell said on Tuesday that progress is being made on inflation, though a long battle remains.
Also, Powell signaled that last week’s stunningly strong jobs report won’t by itself sway its stance on interest rates hikes.
Thus, the dollar index fell by -0.19%, retreating from a 4-week high.
On this morning, the Nikkei 225 index lost 0.4% to 27,568.72.
The Shanghai Composite index edged 0.1% lower to 3,246.53.
Hong Kong’s Hang Seng added 0.3% to 21,361.20.
In Australia, the S&P/ASX 200 also gained 0.3% to 7,527.20.
South Korea’s Kospi advanced 1.3% to 15,062.99.
Shares slipped in Bangkok and rose in Taiwan and Singapore.
Tokyo shares were weighed down by losses in electronics and tech-related companies like Nintendo and Sharp Corp. that have reported steep losses in the latest round of earnings.
SoftBank fell 6.5% after reporting its net profit sank $5.9 billion in the last quarter.
Nintendo sank 7.4% following its latest earnings update, which showed a slight decline in profit in April-December from the year before.
In currency trading, the U.S. dollar rose to 131.17 Japanese yen from 131.11 yen.
The euro rose to $1.0733 from $1.0726.
Going back to analyzing the other agricultural markets …
In Canada, Canadian stocks for every field crop were up at the end of December 2022 compared to the same period in 2021.
StatsCan data, indeed, showed 11.862 MMT of corn stocks for their December count.
That was up from 11.530 MMT after last season’s drought.
Canadian soybean stocks were 3.654 MMT in the StatsCan December count.
That compares to 3.205 MMT after the 2021 drought.
Canola supplies were 11.356 MMT, up from 8.786 MMT last year.
As for wheat, data showed 22.294 MMT of wheat stocks as of 12/31.
That was in line with the trade average guess and up from 16.816 MMT during last year’s drought.
Durum wheat stocks were shown at 3.695 MMT, 1.162 above last year.
StatsCan said higher total supplies reflected higher production in 2022, as growing conditions on Canada’s prairies recovered after one of the driest years on record.
From South America, Brazil’s AgRural reported the 2nd crop corn planting at 12% finished for the Center-South region as of 2/02.
That compares to 24% for the same region and same time last year.
Brazil’s AgRural also reported the soy harvest at 9% finished compared with 16% last year and 5% last week.
Private analyst Cordonnier kept his Brazilian crop estimates at 151Mt for soybeans and 125Mt for corn.
Dr Cordonnier estimates the Argentina soybean crop at 38 MMT, 1 MMT below their prior figure and 4 MMT below the trade average guess for the WASDE report.
Meanwhile, he left his Argentine corn crop forecast at 44Mt but warned “any extended period of hot and dry weather going forward would result in a lower corn estimate.”
Rosario Grains Exchange reported as at 3 Feb, crop conditions of Argentina’s late-sown corn in the core growing regions improved from 35pc bad/average to 15pc bad/average, owing to beneficial rains.
However, further rains were required to improve production prospects.
Soybean conditions pegged at 45pc bad/average down from 65pc.
However, rainfall was deemed to have arrived too late to significantly improve yield prospects.
In Europe grain and oilseed prices rebounded sharply on Euronext.
The EU exported 19.05 million tonnes of soft wheat on 5 February, compared to 17.85 million tonnes at the same time last year.
That rapresents a trend 7% above last year’s pace.
The two main export destinations remain Morocco and Algeria, together accounting for more than 28% of shipments.
Egypt, Nigeria and Saudi Arabia complete the top five buyers.
Exports of barley, however, are down to 3.16 million tonnes compared with 5.28 million last year.
Imports of corn rose sharply to 16.69 million tonnes from 9.87 million tonnes a year ago.
That was a 69% jump above last year’s pace.
European rapeseed imports are up sharply to 4.62 million tonnes from 3.18 million tonnes last year.
European Union soybean imports, meantime, were moderately below last year’s pace so far after reaching 6.45 MMT through February 5.
EU soymeal imports are also lower than last year’s pace so far, with 4.62 million metric tons over the same period.
However, the Commission said that it was still experiencing problems compiling grain trade figures from Germany and Italy.
Export data submitted by Germany from November may be inaccurate following the country’s switch to a new declaration system, while for Italy import data was available only until the end of November, it said in a note.
Germany is one of the EU’s largest cereal exporting members and Italy among the bloc’s major cereal importers.
A breakdown of the EU data showed France remained by far the biggest EU soft wheat exporter this season, with 7.79 million tonnes shipped, followed by Romania with 2.28 million, Germany with 2.15 million, Latvia with 1.71 million and Lithuania with 1.61 million.
Meanwhile, Black Sea origins remain very competitive despite geopolitical pressures.
From North Africa, for MY 2022/23, USDA attaché maintained its forecast wheat production for Algeria at 3.3 million metric tons (MMT), and barley at 1.2 MMT.
The attaché forecasted MY 2022/23 barley imports at 772 thousand metric tons, in line with the import volume seen last year.
The attaché wheat imports forecast aligns with the USDA figure at 8.2 MMT.
The attaché anticipates that supplies from Southern hemisphere compensate for some of the shortfalls in deliveries from Europe and Mexico, based on traders’ reports.
From Levant, the death toll from the earthquake in Turkey and Syria has risen to over 7000 with the window for finding survivors beginning to narrow.
Rescue workers were digging through debris in freezing conditions.
The World Health Organization said the death toll was expected to increase by the thousands.
President Recep Tayyip Erdogan declared a three-month state of emergency in Turkey’s 10 affected provinces. “We are face to face with one of the biggest disasters ever for our region,” he said in a nationally televised address.
The Transport Ministry reports that damage caused by the earthquake has stopped operations at the port of Iskenderun.
All other ports remain operational.
From Ukraine, Ukraine grain exports in the 2022/23 season, which runs through to June, are down 29.2% to 28.2 million tonnes so far, agriculture ministry data showed on Wednesday.
The volume included about 10.1 million tonnes of wheat, 16.2 million tonnes of corn and about 1.9 million tonnes of barley.
Exports at the same stage of the prior season were 39.9 million tonnes.
The ministry said grain exports so far in February had reached 1.26 million tonnes as of Feb. 8, down from 1.43 million tonnes in the same period last year.
From Russia, SovEcon estimated Russia’s January wheat exports at 3.8Mt, up 90pc compared to January last year but marginally lower than the January record of 3.9Mt.
Infrastructure remained the biggest bottleneck.
Strong shipments are expected to continue in February although storms are impacting loading.
Meantime, Russia said on Wednesday that work to unblock Russian exports under the Black Sea grain deal was unsatisfactory, accusing the European Union of failing to deliver on its promises, the TASS news agency reported.
The comments, made by Russian Deputy Foreign Minister Alexander Grushko, refer to the United Nations-brokered agreement between Moscow and Kyiv that aimed to free up grain exports held up at Black Sea ports by the war in Ukraine.
From Australia, local markets continued the week on their merry way.
Bids on grower boards were largely unchanged with canola again a few bucks stronger.
Liquidity continued to trickle out into the market however we do see some prompt demand pop up here and there where buyers have to step up.
The sorghum outlook is very mixed with early sown crops faring better than later sown crops in some areas due the hot and relatively dry summer.
Crops that were able to tap into deeper soil moisture are likely to yield well but those that haven’t are struggling.
Although the outlook is generally very positive for a big crop, yields will be very mixed depending on when the crop went in.
Prices are holding well at $395-400/t delivered Downs but as the bulk of the crop starts to come off in March we may see prices ease.
On the international trade scene, Algeria’s state grains agency OAIC has started buying milling wheat in an international tender which closed on Tuesday.
Initial purchases reported were around $329 a tonne cost and freight (c&f) included.
There was market talk of trades both above and below this level.
Tonnage bought was initially unclear.
Traders said the OAIC had not purchased all the wheat it apparently wished to, and that negotiations in the tender would resume on Wednesday morning.
The initial prices were likely to indicate wheat could be sourced from several suppliers including the west EU, east EU/Black Sea region and Russia.
The wheat is sought for shipment in two periods from the main supply regions including Europe: April 1-15 and April 16-30.
If sourced from South America or Australia, shipment is one month earlier.
South Korea’s MFG has reportedly purchased 138,000t corn, including 70,000t from South America and 68,000t optional-origin, at $340/t C&F for May shipment.
Jordan made no purchase in their tender for 120,000t milling wheat.
Prices were regarded as too high.
That’s all, thank you.
We wish you a nice day.
Author: Sandro F. Puglisi
