Only corn managed to close higher in Chicago, yesterday.
Meantime, rains moved across the Midwest and Plains put negative pressure on soybeans and wheat.
In fact, July soybean futures dropped 0.8%.
Most wheat losses came in at less than 0.5%.
On macro markets, energy futures spilled into the red.
Crude oil dropped 1.25%.
Diesel and gasoline were both down around 0.25%.
A round of weaker-than-normal housing data soured investor sentiment, that have seen on Wall St. the Dow 267 points lower to 34.060.
Food inflation continue to have destabilising and destructive impact of the wider stimulus packages, and in this context, Argentina has limited exports of beef for 30 days in an effort to contain inflation which is pegged somewhere around 50pc annually.
The U.S. Dollar, meantime, softened moderately.
Coming back on grains market, corn prices held onto moderate gains, thanks to some technical buying inspired by export optimism and slower-than-expected planting progress.
Indeed, new export sales were declared yesterday for China in the 2021 harvest for a volume of 1.36 Mt, which puts them around 8Mt of new crop purchases. .
So, cumulative sales in May are progressing sharply to China for next season from the USA.
In the latest USDA report, China’s maize import requirement for the 2021/2022 crop year was 26 Mt.
However, despite these announcements, corn prices were only little changed higer and remain close to the support zone technical.
Operators, indeed, remain very attentive to the progress of the sowing and to the weather conditions in the areas recently sown.
Corn planting progress reached 80% through Sunday.
That’s up from the prior week’s mark of 67% but four points lower than the average trade guess of 84%.
Still, 2021 progress is two points ahead of 2020’s pace of 78% and well above the prior five-year average of 68%. Corn emergence jumped from 20% a week ago up to 41% through Sunday.
That’s slightly ahead of last year’s pace of 40% and moderately faster than the prior five-year average of 35%.
Soybean prices, on the other hand, stumbled after collecting moderate overnight gains.
The consolidation phase after recent highs, is still observed in Chicago with fairly stable prices since the start of the week for both old and new crops.
The soy complex, recorded notable losses after Nopa announced a particularly disappointing American crush last month (60.3 million bushels against 171.8 million bushels last year).
However, the oil market has regained some color, in the wake of a Malaysian palm which has risen again by 5%.
The country indeed recorded a sharp acceleration of its exports during the first half of May, while national production suffered a sharp contraction.
Despite new higher deals during the session in soybean oil in Chicago, the progress of seedlings reassures and pushes certain financial players to mark new profits by closing a few positions.
Soybean plantings, indeed, are progressing slightly faster than expected.
Progress reached 61% through Sunday, versus the average trade guess of 60% and the prior week’s mark of 42%.
Planting pace has jumped well ahead of 2020’s pace of 51% and far beyond the prior five-year average of 37%.
Crop emergence moved from 10% a week ago up to 20% through Sunday.
That’s also a faster pace than 2020’s 16% and the prior five-year average of 12%.
Also wheat prices slid lower on some technical selling, as traders mostly shrugged off USDA’s downgrading of winter wheat quality, mainly on the wake of spring wheat plantings progress that are now at 85% through Sunday, up from 70% a week ago and only one point below the average trade guess of 86%.
Last year’s pace was just 57%, with the prior five-year average at 71% through the first two weeks of May.
Forty-seven percent of the crop is emerged, versus the prior five-year average of 36%.
For winter wheat, more than half (53%) of the 2020/21 crop is now headed, up from 38% a week ago.
That’s a bit below 2020’s pace of 54% and the prior five-year average of 58%.
However, quality ratings dipped a point lower, with 48% of the crop now rated in good-to-excellent condition.
Analysts were expecting to see a one-point improvement, in contrast.
Another 33% is rated fair (unchanged from last week), with the remaining 19% rated poor or very poor (up a point from last week).
Consequentially, losses were mostly minimal.
In this context, Chicago corn rallied 6.75usc/bu to close at 658.25usc/bu.
Chicago wheat traded a wide range before settling in the red – down 2usc/bu to close at 697.75usc/bu.
Kansas walked a similar path also finishing lower by 3.5usc/bu to close at 647.75.
Minni rounded off the US wheat complex with a 1usc/bu lower print.
Soybeans closed down 13usc/bu to settle at 1574.25usc/bu.
Soymeal was down USD$3.5/st.
Meantime corn basis bids were steady to mixed across the central U.S., moving 1 to 3 cents higher at three interior river terminals while sliding as much as 3 cents lower at an Illinois ethanol plant.
Soybean basis bids, on their part, were mostly steady to lower, falling 4 to 20 cents lower across half a dozen Midwestern locations.
An Illinois river terminal bucked the overall trend after rising 6 cents higher.
From South America, Brazil corn weather has deteriorated and while there is still rainfall on the horizon there is debate about the benefit, if any.
Meantime, Brazil’s Anec is now predicting the country’s soybean exports will climb to 594.8 million bushels in May, which is 7% higher than its estimates from a week ago.
The group still expects Brazilian corn exports will effectively zero out this month.
In the Old continent, the European market, continues to record high volatility both on the agricultural commodity market and on the financial market and in particular on certain currencies.
The euro, indeed, has marked a sharp rebound against the dollar, and has thus returned to levels close to the highs of the start of 2021, rising above the level of 1.22.
Euronext seems to be returned to a stable to timid bullish trend.
Wheat notably received the support of an Algerian tender for July deliveries and with a limited carry-over stock, traders anticipate relatively high traded prices.
Meantime, however, the rainy conditions are confirmed with new precipitation expected in France and more widely in Europe, which in terms of production estimates for the new harvest, moved COCERAL to expect soft wheat production to increase in Europe by +12.26 Mt compared to last year, close to 131 Mt.
In corn, despite areas under construction, its expect a slight decline, however the prospect of higher yield compared to last year could lead to an increase in maize production to 64.74 Mt.
In barley, production should show a slight decline compared to last season to 55.39 Mt (- 0.5Mt compared to 2020).
In oilseeds, COCERAL once again communicates on a 2021 production volume for Europe at 27 to 16.63 Mt, a slight increase compared to last year.
This increase is explained in particular by an estimate of production in Romania in clear increase compared to last season.
The situation nevertheless remains tense in Europe where the crushing activity remains strong, particularly to meet oil needs.
Consequentially, rapeseed prices for August 2021 are still moving close to higher, but are not yet able to rise above the level of € 550 / t .
Meantime, Turkey did not prolong zero imports levy as new crop harvesting started and they need to support local farmers.
For today it is: 200 usd referans price/25% corn/ 35% barley/ 45% wheat.
By the way, Turkey wheat imports could reach 10mmt 21/22.
From Black Sea basin, the expected rains arrived at the rendezvous, even beyond expectations on the majority of Ukrainian territory.
A very large majority of the territory has been served with accumulations which already locally exceed 50 mm since the start of the week.
These rains come at the right time for the winter crops, while the wheat is in the ascending phase and the rapeseed in flowering.
They will also ensure a good establishment of the so-called late spring crops, namely corn, sunflower and soybeans.
Additional rains will be observed by the weekend.
From the Middle Kingdom, China imported 72.8 million bushels of corn in April – that’s a year-over-year increase of nearly 109%.
Year-to-date corn imports are now at 337.8 million bushels, a threefold increase compared to the first four months of 2020, according to data from China’s General Administration of Customs.
Chinese wheat imports reached 33.1 million bushels in April, a year-over-year increase of more than 146%.
Year-to-date imports are at 140.7 million bushels, which is nearly 135% above 2020’s pace so far.
In India, high soybean prices could lead to an increase of 10% or more planted acres this year.
The country planted 29.233 million acres last year, with a total production of around 382 million bushels.
Aussie cash markets remained slow and quiet yesterday with smalls trading across the day to fill in prompt loads here and there along the east coast.
Bids and offers on the current crop were widely apart through the delivered market zones for wheat and barley.
New crop bids on the boards were a touch softer, wheat and barley down by $2-3/t and canola was back up $5/t for Dec/Jan delivery.
On the international trade scenario, the break in futures has uncovered global demand.
Bangladesh, Algeria and Japan all seeking wheat offers.
Indeed, Bangladesh issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins that will close on May 30.
The grain is for shipment 40 days after a contract is signed.
Japan issued a regular tender to purchase 4.5 million bushels of food-quality wheat from the United States, Canada and Australia that closes later this week.
Of the total, 52% is expected to be sourced from the U.S.
The grain is for shipment in July.
An Algerian tender for new crop wheat was lanched yesterday.
Tonigth we will see how the sessions close.
