Grain markets were mixed again yesterday.
On Chicago, soybeans saw more technical selling and profit-taking that left prices down double digits, losing nearly 1% by the close, as planting pressure has been factored into the data mix by now.
Wheat prices were mixed but mostly higher on a round of technical buying partly prompted by dry weather forecasts across Europe.
In fact, Chicago SRW and MGEX spring wheat contracts firmed by more than 1%, while Kansas City HRW contracts were down slightly.
On a positive note also corn prices, trended higher after a choppy session, with May and July contracts that trended higher, while contracts from September 2021 onward saw modest losses as planting progress applied downward pressure.
On macro markets, with the post-corona recovery still underway, the US President Biden made his first speech to the government there, pushing for more multi-trillion-dollar spending on infrastructure and social programs which has some in the market optimistic about the cash influx from the infrastructure spending.
Meantime after some highly positive earnings reports from tech giants Facebook and Apple, on Wall St., the Dow climbed 239 points higher to reach 34,060.
Energy prices also improved significantly, with crude oil up nearly 2%. Diesel rose around 1% higher.
Gasoline finding gains of around 1.25%.
The U.S. Dollar, meantime, firmed slightly.
Coming back on grains market, if the water deficit persists on the American continent, certanly this will have a negative impact on wheat crops, however, allows rapid progress in the sowing of corn and soybeans.
The weekly US export sales report had half million tons of old crop corn and half a million tons of new.
The corn figures included a large chunk of unknown destination rolled from old crop to new, and more rolls are rumoured to come.
Soybeans export sales were 0.3Mt old crop and 0.4Mt new crop, half of which was to China.
Wheat was 0.2Mt old crop and 0.2Mt new crop.
All in all, about as expected.
Milo/sorghum sales had an additional two Chinese boats reported.
Corn export shipments improved 19% week-over-week and 3% above the prior four-week average.
China was the No. 1 destination.
Soybean export shipments jumped 50% higher week-over-week but were still down 6% below the prior four-week average.
Egypt was the No. 1 destination.
Wheat export shipments, on they part, stayed 14% ahead of the prior four-week average.
China was the No. 1 destination.
Rumours about more new crop Chinese demand for both beans and corn have been doing the rounds.
However, no new flashes overnight, but as we’ve noted through the last year there seems to be a fair amount of disregard for the reporting regulations across the Chinese purchases.
In this context, US corn basis bids were steady to slightly soft across much of the Midwest, sliding 1 to 2 cents lower at three locations.
An Iowa ethanol plant bucked the overall trend after rising 6 cents higher.
Also US soybean basis bids were steady to mixed, moving as much as 3 cents lower at an Illinois river terminal while firming as much as 10 cents higher at an Iowa processor.
From South America, there seems to be no relief on the cards for Brazilian safrinha crop areas with more talk shifting down into the 90Mt ranges.
The two-week weather maps are as dry as a bone.
Meantime, according to the Argentine Stock Exchange 32.9% of soybean areas are harvested, up 14.4% compared to the previous week.
This clear advance is linked to a return of dry weather in the country.
South Africa’s Crop Estimates Committee says the country’s 2020/21 corn production should rise 5% year-over-year to 633.6 million bushels, based on more favorable weather conditions this season. Analysts had offered an average trade guess that was 10 million bushels higher than this total.
Another ASF outbreak in China with reports from the Ag Ministry there confirming cases in Inner Mongolia though, supposedly, it has been contained.
On the European market, we have seen a very sharp drop in cereal prices on Euronext on the 2021 harvest dates.
The outlook for a change in the weather next week in France points to beneficial rains, allowing more optimism about future production.
In this context, wheat prices fell 8 € / t on Euronext harvest 2021.
Meantime in rapeseed, the last deadline for the 2020 harvest, i.e. May 2021, closes today and the 2020 harvest quotes are no longer available, however to note that recorded a bewildering leap of 84 euros per tonne, due probably forced buybacks.
This movement must therefore be interpreted as an anomaly more than anything else.
The European Commission, however, is revising downwards its estimates of soft wheat production for the EU for the next season to 124.8 million tonnes against 126.7 still posted last month.
In any case, this remains higher than the 2020 harvest which was estimated at 117.2 million tonnes.
In this context, the 2021/2022 end of season stock is revised downward estimated at 11.4 million tonnes against 12.9 estimated last month.
Future barley production is estimated at 56 million tonnes against 56.3 posted last month.
From Black Sea basin, weather maps are turning somewhat dry on the extended runs, although so far concerns about crop impacts are fairly few and far between with generally good conditions across the winter wheat areas.
The Black Sea markets are now in slow mode as we head into the Orthodox Easter period which will also overlap with May Day celebrations.
In deed, many will be out of the office through most of next week.
In the first two months of 2021, Ukraine exported more than $ 1 billion worth of agricultural products to China.
This figure is up 44% compared to the same period last year.
China turns out to be the first outlet for Ukrainian corn with more than 6Mt exported since the start of the season, the same for feed barley with 3Mt exported and sunflower cake with 1.2Mt and the second for sunflower oil in shoulder to shoulder with India.
China could open its borders for other Ukrainian agricultural products.
Maybe, feed’s wheat, will be next on the list.
Meantime Ukrainian traders union UGA expects corn production should recover by 5.5 Mt to reach t 35.5 Mt while wheat production should rebound by 2.4 Mt rebound to 27.7 Mt.
The UGA, in add, notably sets a national export target of 30 Mt of maize for the 21/22 campaign, against 22 Mt this year!
So, around two-thirds of that total is likely to enter the export market.
Aussie local markets took advantage of the sell-off on the boards the other day to take a little bit of a breather with traders attempting to pull bids back but resulted in fairly thin trading.
On weather market side, rains have been very nicely spread across the WA wheat belt so far, with 20+ mm already towards the south and 10-15mm a little more inland.
Weather maps are still calling for a widespread inch between this set of rain and the showers forecast for early next week.
East coast maps also still favourable, with the forecasts pushing a little further inland across southern NSW along the Riverina region.
Global grain stocks are forecast to finish the 2020-21 marketing year at a five-year low at 609 million tonnes, according to the International Grains Council’s (IGC) most recent Grain Market Report released on April 29.
The IGC said an increase in total grains (wheat and coarse grains) production of 36 million tonnes from the previous marketing year will be offset by a 44-million-tonne rise in consumption, leaving stocks 8 million tonnes lower than a year ago.
“The drop in stocks is mainly because of another drawdown of maize, to the least in eight years, which contrasts with a buildup for wheat to a record,” the IGC said.
The IGC projects wheat stocks to increase to 289 million tonnes from 278 million in 2019-20, while maize stocks are forecast to decline by 26 million tonnes despite an increase in production from 1.12 million tonnes to 1.14 million.
Total grains consumption is forecast to trend higher, led by a 20-million-tonne increase in wheat demand.
Largely tied to a production upgrade in Brazil, global soybean output in 2020-21 was forecast up 1% month-on-month, to 362 million tonnes, which is 7% higher than a year ago.
“Nevertheless, with an expected solid increase in consumption, stocks are seen falling for the second consecutive season, including US carryovers contracting by 80% year-on-year,” the IGC said.
Reflecting larger crops in Asia, world rice production in 2020-21 is estimated at a record-high 504 million tonnes, although record utilization, also projected at 504 million tonnes, will result in marginal tightening inventories, according to the IGC.
With strong gains for all the components other than rice, the IGC Grains and Oilseeds Index (GOI), which measures average prices, rose by 8% from last month to 285, a 54% increase year-to-year and its highest level since 2013.
The IGC said the eight-year high GOI comes “as weather worries and tightening supply outlooks sparked solid gains in maize, wheat, soybean and barley prices.”
On international trade scenario, Algeria was thought to have purchased between 7.3 million and 13.2 million bushels of milling wheat from optional origins in an international tender that closed yesterday.
(Algeria does not release the results of its tender purchases.)
The grain was likely sourced from the European Union and is for shipment in June if that is the case.
The Philippines issued a tender to purchase 6.8 million bushels of milling or animal feed wheat from a variety of origins, including the United States.
The deadline for submissions is May 4, and the grain is for shipment between June and August.
South Korea purchased 133,000 t of corn from optional origins in an international tender that closed earlier today.
The grain is for arrival in late October.
Tonigth we will see how the session will close.
