Good morning Farmer Family …
US farm markets were mostly lower, on Wednesday.
Corn prices lost 0.88%.
Soybean prices ended with 0.76% losses.
Meal prices closed 1.98% in the red.
The soybean oil market, in contrast, continued its bounce, and closed up by another 1.39%.
Wheat prices suffered variable losses.
The winter wheat markets in Kansas City and Chicago were down the most on Wednesday.
Chicago SRW wheat prices gave back 2.13%.
K.C. HRW closed down by 1.27%.
Minneapolis spring wheat prices faired relatively better with 0.78% losses.
Fundamental news for grains and oilseeds was thin, yesterday.
Corn, wheat and soybean prices fell, primarly pressured down by a stronger dollar and fears of more interest rate hikes by the Federal Reserve.
A stronger dollar, which makes greenback-priced commodities expensive for buyers holding other currencies, weighed on the agricultural markets.
Also, both corn and soybean, were pressured, after crude oil prices sagged in response to a bigger-than-expected U.S. weekly crude stock build.
Additionally, soybeans have eased, on profit-taking, after contract rose to its highest level since June on Monday, driven by a near nine-year top for soymeal prices.
Meantime, traders have shifted their focus in recent days to the advancing harvest of a likely record-large soybean crop in Brazil.
Uncertainty about risks to Black Sea grain supplies from the war in Ukraine, underpinned the wheat and corn markets.
Grain traveling in the USA railways totaled 21,241 carloads last week.
That brings cumulative totals for 2023 at 140,408 carloads, which is 1.4% below last year’s pace so far.
On the demand side, US private exporters reported to the USDA having sold 213,370t corn for delivery to Mexico during 2022-03 marketing year.
EIA data showed ethanol producers averaged 1.014m barrels per day through the week that ended 2/10.
That was a 14k bale increase from the prior week.
It also marked the fifth consecutive week that production stayed above the 1-million-barrel-per-day benchmark.
Ethanol stocks, however, were up from 24.4m to 25.339 million barrels.
That was an 4% increase and are now at a 45-week high.
Meanwhile, the National Oilseed Processors Association (NOPA) said its U.S. members crushed 179.0 million bushels of soybeans in January.
That was up 0.8% from December but down 1.8% from the year-ago January 2022 crush.
The figure also fell below an average of trade estimates for 181.656 million bushels.
Meantime, soyoil stocks through January 31 rose to 1.829 billion pounds, a monthly gain of 2.1%.
The U.S. soybean crush rose for the first time in three months while soyoil stocks increased for a fourth straight month.
However, both gains were smaller than expected,
In this context, corn basis bids held steady across most Midwestern locations on Wednesday but did trend 8 cents higher at an Indiana ethanol plant and 5 cents lower at a Nebraska processor.
Soybean basis bids were steady across most Midwestern locations, but did shift 5 cents higher at an Indiana processor.
Commodity funds were net sellers of CBOT wheat, corn, soybean and soymeal futures contracts, and net buyers of soyoil futures.
On this morning, Chicago soybean prices firmed, with prices rising for the first time in three sessions.
Wheat firmed after dropping earlier in the session to its lowest in almost one week, while corn ticked lower.
Notably, the most-active soybean contract on the Chicago Board of Trade added 0.1% to $15.27 a bushel, as of 03:48 GMT.
Wheat gained 0.3% to $7.82-3/4 a bushel while corn lost 0.1% to $6.75-3/4 a bushel.
In energy markets, oil prices were flat to lower on Wednesday as the U.S. dollar strengthened and investors worried that rising interest rates would slow the economy and cut fuel demand.
Brent futures indeed slid 20 cents, or 0.2%, to $85.38 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 47 cents, or 0.6%, to $78.59.
On this morning, Brent crude futures rose 59 cents, or 0.7%, to $85.97 per barrel by 07:25 GMT, while U.S. West Texas Intermediate (WTI) crude futures gained 73 cents, or 0.9% to $79.32 a barrel.
The International Energy Agency (IEA) said oil demand would rise by 2 million barrels per day (bpd) in 2023, up 100,000 bpd from last month’s forecast to a record 101.9 million bpd, with China making up 900,000 bpd of the increase.
China will account for almost half of 2023 oil demand growth, the Paris-based agency said.
Around 1 million bpd of oil production will be shut by the end of the first quarter, the IEA said, following the European ban on seaborne imports and international price cap sanctions on Russian oil.
Analysts at Commonwealth Bank pointed out in a note that OPEC+ will not look to boost output to compensate for lower Russian output.
That means the onus will be on the United States and other non-OPEC producers to boost output.
U.S. crude oil stocks soared last week by 16.3 million barrels to 471.4 million barrels, the highest level since June 2021, the Energy Information Administration (EIA) said.
However, the larger-than-expected build was largely due a data adjustment.
That muted the impact to oil prices.
However, the U.S. dollar , which generally moves inversely with crude prices, surged on the back of bullish U.S. retail sales data.
In ocean freight markets, the Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, fell on Wednesday as rates for larger vessels dipped to multi-month lows.
The overall index, indeed, was down 22 points, or 3.9%, at 541, the lowest since early June 2020.
Notably, the capesize index dropped 65 points, or about 17%, to over a five-month low of 317.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, fell $537 to $2,630.
The panamax index fell 18 points, or about 2.1%, to 830, its lowest since June 11, 2020.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, were down $158 at $7,473.
The supramax index posted its best day in nearly six months, up 13 points, or about 2.1%, at 640.
In equity markets, on Wall Street, the S&P 500 rose 0.3% to 4,417.60 after swinging from early losses to gains through the day.
The Dow Jones Industrial Average added 0.1% to 34,128.05, while the Nasdaq composite rose a more forceful 0.9% to 12,070.59.
Sales at U.S. retailers jumped by more last month than expected, even as shoppers contended with higher interest rates on credit cards and other loans.
It’s the latest piece of data to show the economy remains stronger than feared, although, the strong demand could add more fuel to inflation, leading the Federal Reserve to keep interest rates high.
On this morning, Asian shares edged higher.
Notably, Japan’s benchmark Nikkei 225 gained 0.7% in morning trading to 27,705.72.
Australia’s S&P/ASX 200 rose 0.7% to 7,406.70.
South Korea’s Kospi jumped 1.7% to 2,469.63.
Hong Kong’s Hang Seng surged 2.1% to 21,241.94, while the Shanghai Composite added 0.7% to 3,304.77.
In the latest data on the regional economy, Japan’s trade deficit reached a record 3.497 trillion yen ($26.2 billion) in January.
Imports for the world’s third largest economy jumped amid higher raw material and energy costs, and a weak yen.
The total value of machinery orders received by 280 manufacturers in Japan, a key indicator for private sector investment, rose a seasonally adjusted 6.5% in December from the month before.
Japanese machinery orders for December returned to growth after contracting in the previous month.
Exports rose 3.5%.
However, Asian equities were higher on Thursday after a positive day on Wall Street, where price action was driven by strong retail sales in the US, which signaled a hot economy at the start of the year.
In currency trading, the U.S. dollar fell to 133.76 Japanese yen from 134.16 yen.
The euro cost $1.0707, up from $1.0690.
Going back to analyzing the other agricultural markets …
From South America, Brazil’s Department of Rural Economy reported at 7 Feb, the 2022-23 soybean harvest in Parana was 7pc complete (2pc previous week, 3pc previous year), with conditions rated 84pc good (81pc previous week, 76pc previous year).
First (full-season) corn harvest was 7pc complete (4pc previous week, 21pc previous year), with conditions rated at 83pc good (82pc previous week, 68pc previous year).
Second (safrinha crop) maize sowings were at 12pc complete (4pc, 8pc), with conditions rated 100pc good (100pc, 96pc).
Refinitiv Commodities Research slightly reduced its estimates for Brazil’s 2022/23 corn production to 126.49 MMT, citing some planting delays in a few key production regions.
Through February 11, Brazil’s first corn crop harvest was 11% complete, and second corn plantings were at 20.4%.
Brazil’s Agroconsult lowered their soybean production estimate from 153.4 to 153 MMT to match the USDA official forecast.
Meantime, Brazil grain exporters’ association, Anec, cut its Feb soybean export forecast by 0.3Mt, to 9.4Mt (9.1Mt Feb last year), while soymeal shipments were seen 0.1Mt higher, at 1.9Mt (1.6Mt last year).
In Europe, prices fell back yesterday, marking a change from the dynamics of the last few days.
Wheat prices in France are still under pressure from competitive prices from Russia and Eastern Europe.
Corn prices also fell slightly.
However, the current corn level prices are near the parity with wheat prices.
In oilseeds, the rapeseed market fell yesterday in the wake of other oilseeds and the further decline in vegetable oil prices.
FranceAgriMer, lowered its outlook for French 2022-23 soft wheat exports from 10.60Mt to 10.45Mt because of competition from Black Sea supplies.
That expected volume is still 19% higher year-over-year, however.
Meantime, FranceAgriMer made a sharp upward revision (350kt) to its barley export forecast (2.8Mt) after a surge in shipments to China.
It noted French wheat prospects in North Africa were curbed by competition from Black Sea origins, including Russian wheat in Algeria, while Chinese demand for French wheat appeared thin for the rest of the season.
After a slow start to the export campaign, traders have reported large sales of French barley to China, with several vessels loading in January and February.
Meantime, per latest data published by Euronext on Wednesday, non-commercial market participants reduced their net short position in Euronext’s milling wheat futures and options in the week to Feb. 10.
Notably, non-commercial participants, which include investment funds and financial institutions, lowered their net short position to 14,093 contracts from 46,629 a week earlier.
Commercial participants flipped their net long position to a net short position, going to a net short of 2,177 contracts from a net long of 28,217 a week earlier.
In Euronext’s rapeseed futures and options, non-commercial market participants lowered their net short position to 31,160 contracts from 32,906 a week earlier.
Commercial participants similarly decreased their net long position in rapeseed to 29,933 contracts from 32,030 a week earlier.
From Ukraine, local officials appealed on Wednesday to the United Nations and Turkey to press Russia to immediately stop hindering Ukrainian grain shipments that supply millions of people and not to use the food as a weapon.
From Russia, Ag Ministry reported at 14 Feb winter crop condition were rated 95pc good/satisfactory.
Russian consultancy Sovecon fractionally raised its forecast for 2022/23 wheat exports to 44.2 MMT.
Meantime, Russia on Wednesday gave Cuba an “emergency” donation of 25,000 tons of wheat to combat shortages on the island, a sign of deepening ties between the two long-time allies.
Cuban state-run media said in December the grains deliveries were part of 800 million rubles ($10.8 mln) earmarked by Russia to purchase and deliver wheat to Cuba.
From the Middle Kingdom, China is planning another auction to sell 140k MT of its state imported wheat reserves on February 22.
China has offered a series of similarly sized auctions over the past few months in an attempt to boost local supplies and tamp down high prices.
Meantime, China’s state stockpiler Sinograin will buy 10,875 tonnes of domestic soybeans from the 2022 crop on Feb. 17, according to a notice on the company’s official Wechat account.
From South East Asia, according to India’s Dept. of Agriculture 2022-23 wheat production was forecast at 112.2Mt (107.7Mt previous year).
Corn production was seen at 34.6Mt (33.7m previous year).
Sorghum production was forecast at 4.1Mt (4.2Mt) and rapeseed at 12.8Mt (12.0Mt).
With drought threatening Argentina’s grain crops, India has bumped up its soymeal exports.
As much as 500,000 metric tons may be shipped out in February and March, according to multiple exporters.
“If global prices sustain at the current level, then India could easily export more than 2 million tons in 2022/23,” according to one of those sources.
From Australia, despite supply-side pressure as the sorghum harvest gathers pace, prices for feedgrain in the northern region have firmed in the past week, while southern values have eased.
This reflects some willingness to meet the market now that growers are booking backloads of fertiliser and dropping off loads of grain on the out run.
While sources say trade volume has increased in the southern market, demand has edged ahead of supply in the north to lift values.
Meantime, local markets ticked a little higher on the boards yesterday through wheat strength such as Port Adelaide, where AGP1 and ASW1 values were firmer by $2-3/t.
Delivered Geelong/Melbourne values were largely unchanged.
Northern feed markets remained supported with Downs barley bid around $395/t and SFW1 bid at similar values.
Australia is in for a hot and dry weekend.
The Bureau of Meteorology said low-to-severe -intensity heatwave conditions continue over inland WA.
A Heatwave Warning is current.
Heatwave conditions will be moving into parts of southeast Australia from Thursday.
Likely to see from today to the weekend temperatures over 40C expected in parts of New South Wales, Queensland and Victoria.
On the international trade scene, Jordan’s state grains buyer reportedly sought 120,000t feed barley for Jun/Jul shipment and 120,000t milling wheat from optional origins, Jun/Jul shipment.
An importer in Thailand reportedly purchased 60,000t feed wheat, expected to be sourced from Australia, at $337/t c&f, July shipment.
Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 76,203 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender that closed on Thursday.
ODC Tunisia issued tenders to buy 4 x 25k milling wheat (blé tendre) and 3 x 25k barley (orge).
Tender is closing tomorrow Feb 17, 2023.
That’s all, thank you.
We wish you a nice day.
Author: Sandro F. Puglisi
