Good morning Farmer Family …
US farm markets were mostly firm to start the week.
Corn prices closed 0.66% higher.
Soybean prices managed meager gains, up 0.02%.
The rest of the soy complex was mixed with soymeal prices firmr 0.92%, while soyoil prices faded 0.66% lower.
The wheat market closed out the session higher.
Chicago SRW wheat prices were up 0.76%.
Kansas City wheat contracts were 0.36% higher.
Minneapolis spring wheat settled 0.05% in the green.
Corn and wheat prices have climbed in recent sessions as concerns intensified that fighting in Ukraine could threaten the agreement for the shipping channel for Ukraine’s grain exports, which expires in March.
Russia said yesterday it would be “inappropriate” to extend the Black Sea grain deal unless sanctions affecting its agricultural exports were lifted and other issues were resolved.
The Texas state Crop Progress report showed that 11% of the state’s winter wheat crop was rated gd/ex as of February 12, down 2% on the week.
However, more wet weather is on its way.
Nearly all of the central U.S. will receive at least some measurable moisture between Tuesday and Friday, according to the NOAA.
Also, the agency’s new 8-to-14-day outlook predicts for the Midwest and Plains between February 20 and February 26, a seasonally cold weather establishing itself in the Northern and Central Plains.
As for soybean, South America weather concerns continued to be on the table despite Central-eastern Argentina, has received between 5 and 25 millimetres of rainfall on Monday.
The country’s persistent drought on top of high temperatures last week, make this benefits short-lived, meteorologists said.
Also, the U.S. soybean crush in January likely increased versus December, as NOPA members, were estimated to have crushed 181.656 million bushels last month.
However, if realized, that could means a decline from the same month a year ago.
The monthly NOPA report is due on Wednesday.
As a result, grain prices were unable to move the needle much in either direction yesterday, as traders searched for fresh supply and demand clues.
Only after USDA showed a solid round of export inspection data, prices got a touch of bullish assistance.
USDA’s weekly Export Inspections report, indeed, showed 511,506 MT of corn was shipped during the week that ended 2/09.
That was up from 494,000 MT last week although well below the 1.46 MMT during the same week last year.
Mexico was the top destination of 297,817 MT.
The season’s exports reached just 13.06 MMT through February 9, which remains 35% behind last year’s pace.
As for soybean, exports were again excellent at 1.555 MMT.
That was down from 1.915 MMT last week but was still larger than the 1.233 MMT shipped during the same week last year.
China was the destination of 998,660 MT of the total.
USDA also added 85k MT to past reports, bringing the season’s total to 39.540 MMT.
That is 1.6% ahead of last year’s pace.
As for wheat, exports were reported at 472,327 MT.
That was 118k MT lower on the week, but up 13k MT from the same week last year.
USDA added 55k MT of shipments to past reports for a MY total of 14.286 MMT, now trailing last year by 1.5%.
In this context, corn basis bids were steady to firm after rising 2 cents at an Ohio elevator and 5 cents at an Illinois ethanol plant.
Soybean basis bids were steady to firm after tracking 2 to 10 cents higher across four Midwestern locations.
Commodity funds were net buyers of CBOT corn, soymeal, soybean and wheat futures contracts and net sellers of soyoil futures.
On this morning, Chicago wheat and corn prices slid for the first time in three sessions, while soybeans ticked higher.
Notably, the most-active wheat contract on the Chicago Board of Trade fell 0.4% to $7.88-1/2 a bushel, as of 04:01 GMT, and corn gave up 0.1% to $6.84-1/4 a bushel.
Soybeans added 0.1% to $15.43-1/2 a bushel.
In energy markets, oil prices edged higher on Monday, as investors weighed Russia’s plans to cut crude production and short-term demand concerns ahead of U.S. inflation data this week.
Brent futures for April delivery rose 22 cents, or 0.3%, to $86.61 a barrel, while U.S. crude rose 42 cents, or 0.5%, to $80.14 per barrel gain.
The United Arab Emirates’ energy minister said there was no need for the OPEC+ group of oil-producing nations to meet earlier than scheduled as the market was balanced.
However, gains were limited as traders and the Fed look for confirmation of the gradual downward inflation trend of the past few months.
Additionally, supply concerns were relieved somewhat as a cargo of Azeri crude set sail from Turkey’s Ceyhan port, the first since a devastating earthquake in the region on Feb. 6.
Also on the supply side, U.S. shale crude oil production in the seven biggest shale basins is expected to rise to its highest on record in March, the Energy Information Administration said on Monday.
On this morning, oil prices fell, with Brent crude futures down 43 cents, or 0.5%, to $86.18 per barrel by 07:30 GMT, while U.S. crude futures fell by 71 cents, or 0.89%, to $79.43 per barrel.
The U.S. Department of Energy said after the previous session ended it would sell 26 million barrels of oil from the SPR, a release that would likely push the reserve to its lowest level since 1983.
The DOE had considered cancelling the fiscal year 2023 sale after U.S. President Joe Biden’s administration last year sold a record 180 million barrels from the reserve.
But that would have required Congress to act to change the mandate.
In ocean freight markets, the Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, rose to a one-week high on Monday as capesize vessels segment logged its biggest single-day gain since mid-December.
The overall index, indeed, was up 14 points, or about 2.3%, at 616.
Notably, the capesize index gained 48 points, or about 9.9%, to 534, hitting a two-week high.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, gained $399 to $4,432.
The panamax index (.BPNI) fell 1 point to 863 points.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, were down $15 at $7,764.
The supramax index was down 3 points at 625 points.
In equity markets, stock indexes closed higher on hopes that U.S. inflation pressures will continue to ease.
Stocks also garnered support from a monthly New York Fed consumer survey that showed one-year inflation expectations were little changed at 5% in January.
Also, wage growth expectations fell after the median expected growth in household income fell -1.3 points to 3.3%, the largest monthly drop in data going back almost ten years.
The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, dipped to 3.70% from 3.75% late Friday.
The two-year yield, which tends to move more on expectations for the Fed, was at 4.54% and close to its highest since November.
Thus, the Dow Jones Industrial Average gained 1.1% to 34,245.93, while the Nasdaq composite rose 1.5% to 11,891.79.
The S&P 500 rose 46.83 points to 4,137.29.
On this morning, Japan’s benchmark Nikkei 225 gained 0.6% to finish at 27,602.77.
Australia’s S&P/ASX 200 edged up 0.2% to 7,430.90.
South Korea’s Kospi added 0.5% to 2,465.64.
Hong Kong’s Hang Seng lost 0.1% to 21,134.55, while the Shanghai Composite rose 0.3% to 3,293.28.
Japan’s government data showed the world’s third largest economy grew at an annual pace of 0.6% in October-December.
Tourism recovered, as did local travel, and exports grew, the Cabinet Office reported.
In currency trading, the U.S. dollar inched down to 132.04 Japanese yen from 132.42 yen.
The euro cost $1.0735, up from $1.0726.
Going back to analyzing the other agricultural markets …
From South America, the USDA FAS attaché in Argentina pegged 2022-23 wheat exports at 6.2Mt, 1.3Mt lower than the USDA official forecast.
Barley exports, pegged at 2.3Mt, are 400,000 tonnes lower than the USDA forecast.
Corn production is pegged at 45Mt (official USDA 47Mt).
The FAS attaché update noted that very dry conditions had severely affected the early planted corn, while the late corn could still reach almost average production, if rains were to come in February and March.
Due to these poor growing conditions, corn exports were pegged down to 32.2Mt (USDA 35Mt).
In Brazil farmers have harvested 17% of the planted soybean area in the 2022/23 cycle through last Thursday, agribusiness consultancy AgRural said on Monday, up eight percentage points from the previous week.
At the same time last year, 24% of the Brazilian soy fields had been reaped, said AgRural, which expects the local crop to reach 152.9 million tonnes this season, according to a January estimate.
Mato Grosso boosted overall fieldwork in the last week, helped by larger periods of sunshine in-between rainfall.
Soybean yields in Brazil’s southernmost state of Rio Grande do Sul kept falling due to heat and irregular rains, but that in other states the expectation are for “very good yields”.
AgRural also noted that Brazil’s second corn planting remained below year-ago levels, although most farmers still have time to catch up by late February or mid-March.
According to AgRural, 25% of the expected second corn area had been planted in the center-south region as of Thursday, up from 12% a week earlier but below the 42% seen a year ago.
In Europe, grain and oilseed prices continued increasing yesterday.
Geopolitical risk came back in the spotlight.
France yesterday asked its nationals to leave Belarus without delay.
The US Embassy in Moscow has stipulated that “US citizens residing or traveling in Russia must leave immediately”.
What worries operators even more are the almost daily criticisms for a week of the Ukrainian export corridor by Russian officials.
In this context the performance of corn should be noted, meantime, as prices are near wheat’s in a context of a European market that is ultra-dependent on Ukrainian imports for the coming months.
From Ukraine, officials from IMF and Ukraine will meet this week following reports Ukraine is seeking a multibillion-dollar loan to help it deal with the devastating financial impact of war.
Russia said on Monday that it would be “inappropriate” to extend the Black Sea grain deal unless sanctions affecting its agricultural exports are lifted and other issues are resolved.
Meantime, Ukraine’s Ag Ministry reported as of 13 February cumulative grain exports since July 1 were 29.3Mt, down almost 29pc from last year’s pace.
The total included 10.4Mt of wheat (17.6Mt previous year), 16.7Mt of corn (17.4Mt previous year), and 1.9Mt of barley (5.5Mt previous year).
As of February 2023, approximately 33 million tons of grain remain in Ukraine, which must be exported.
From Russia, sowing of spring crops could begin in the south soon.
The agriculture ministry said Russia was ready for the spring season.
SovEcon said they expect the moisture content of soils in the south of the country to increase in the next two weeks, just in time for the start of the growing season for winter wheat, which usually begins in March.
Meantime, loadings at ports were down significantly during past week due to poor weather in the Black Sea.
That hit Russia’s capacity to export significally, as grain exports dropped from 1.02 million tonnes a week earlier to 660,000 tonnes during past week, per latest port data.
Still, in February Russia’s grain exports will set at 3.4-3.9 million tonnes, according to SovEcon.
That is up from 2.3 million tonnes during the same month last year, and comfortably above the February average for recent years of around 2.5 million.
In this context, Russian wheat prices rose last week.
Notably, according to the IKAR, prices for Russian wheat with 12.5% protein content, delivered free on board (FOB) from Black Sea ports, were up $1 from last week, to $298 per tonne.
In contrast, price for domestic 3rd class wheat, European part of Russia, excludes delivery, tumbled to 12,500 rbls/t -100 rbls/t (Sovecon).
As a result, Russia’s agriculture ministry set the wheat export duty at 4,653.5 roubles per tonne in the period Feb. 15-21, up from 4,496.6 roubles for the previous week.
As for other products, price for domestic sunflower seeds was at 29,025 rbls/t +875 rbls/t (Sovecon).
Price for domestic sunflower oil was at 80,750 rbls/t +2,000 rbls/t (Sovecon).
Price for domestic soybeans was at 33,950 rbls/t +350 rbls/t (Sovecon).
Export price for sunflower oil was at $1,140/t -$20 (Sovecon).
Price for white sugar, Russia’s South, was at $721.64/t -$0.80 (IKAR).
($1 = 73.78 roubles).
From the Middle Kingdom, the twentieth annual statement by China about agriculture and rural affairs titled No. 1 central document was published yesterday.
It outlined nine tasks comprehensively promoting rural vitalisation in 2023 calling for enhanced efforts to stabilise production, to ensure supply of grain and important agricultural products, to boost the construction of agricultural infrastructure, to strengthen support for agricultural science, technology and equipment, to consolidate and expand the achievements of poverty alleviation, and to promote the high-quality development of rural industries.
In this context, China will expand its soybean production in 2023 and grow new high-yield varieties, state media reported on Monday.
The document reiterated a recently stated goal to boost grain production capacity by another 50 million tonnes, from current production of more than 650 million tonnes, by boosting corn yields, increasing the minimum purchasing price of wheat, and further supporting oilseed crops.
The document also outlined plans to protect soil and conserve water, while strengthening controls on the use of arable land.
It also called for further development of indoor farms, with plans to explore building such facilities in the Gobi and other deserts.
The document also supported a focus on reducing soymeal feed rations to further reduce its reliance on soybean imports.
Meantime, China sold 140.000t of its state reserves of wheat in a recent auction, which was 100% of the total on offer.
China has completed a series of similarly sized auctions as a strategy to push down high prices and boost local supplies.
On the other hand, Hong Kong reported an outbreak of African swine fever (ASF) on a farm near the border with mainland China.
Five other pig farms within three kilometres of the farm were inspected and no abnormalities were found.
Movement of pigs on these farms were suspended and samples from pigs will be tested.
No reports of abnormalities from pig farms outside the 3 km zone have been received.
Enhanced inspection, surveillance and investigation is continuing.
From South East Asia, India Meteorological Department reported the impact of above normal temperatures on wheat crops in the northern parts of the country was limited, so far, while increased irrigation may help alleviate the negative influence of unfavourable weather conditions.
However, yield potential may be curbed if elevated temperatures were to persist.
Crops are expected to enter the crucial grain filling stage during late February/March.
From Australia, the country exported 2,664,135 tonnes of wheat and durum in December, up 50pc from the November total of 1,773,297t, according to the latest data from the Australian Bureau of Statistics.
In the boxed market, Vietnam on 47,707t followed by Taiwan on 32,024t and China on 30,128t were the biggest-volume destinations.
In bulk, China on 828,648t was the largest market for December-shipped bulk wheat, well ahead of South Korea on 299,050t and The Philippines on 290,623t.
Meantime, Monday’s markets were firmer, wheat depot bids up $5-10/t across the country, delivered markets also firmer by $5-7/t.
Barley also firmed.
Canola was largely unchanged.
On the international trade scene, importers from The Philippines reportedly purchased around 110,000t feed wheat in a tender last Friday, at US$332-335/t C&F for June- July shipment with Australia the expected origin.
Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 76,203 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on Thursday.
That’s all, thank you.
We wish you a nice day.
Author: Sandro F. Puglisi
