All markets gapped lower yesterday, except corn, as a broad selloff left stock markets, ag and energy commodity prices more significantly downward.
Particulary, all grain prices spilled into the red after ample technical selling, with exception of corn that was a little more complicated, posting mixed results.
Chicago corn July futures, indeed, climbed 0.4%, after another large sale to China announced by USDA, while spillover of weakness from a broad range of other commodities applied downward pressure on September futures dipping prices 0.25%.
Soybeans and wheat, instead, were both down around 2%.
On macro markets, energy prices also fell significantly lower, after the announcement of US stocks above expectations and on concerns about global demand.
In fact, the deterioration of the health situation in India, Japan and South-East Asia is reviving market fears about global consumption in the short term, at a time when Europe is gradually coming out of health restrictions.
So, Crude oil lost 3.5%.
Gasoline was down around 3%.
Diesel dropping more than 2.5%.
Meantime on stock markets, weighed down by plummeting cryptocurrency prices and sagging tech stocks, the Dow fell 164 points trading to 33,678 on Wall St..
The U.S. Dollar firmed moderately.
Coming back on grains market, good rainfall has fallen with more to come throughout the US Midwest which is massively beneficial to the recently planted row crops.
Meantime, yesterday China bought for the next season others 1.36 Mt of corn, thus adding to the volumes of the past few days.
American exporters are delighted to have already potentially entered into contracts, so early in the season, as nearly a third of the Chinese import volumes estimated for the next season was bought at now.
Ethanol production made another big leap forward for the week ending May 14, climbing to a daily average of 1.032 million bushels – the first time the daily average had cleared the 1 million mark in more than a year.
Ethanol stocks inched fractionally higher from a week ago.
Private exporters also announced to USDA the sale of 142,500 metric tons of soybeans for delivery to Mexico during the 2021/22 marketing year, which begins September 1.
In wheat, meantime, the level of $ 7 / b was broken on short maturities, pushing prices back to their lowest levels for a month.
The current readings on the winter wheat yield potential confirm a good yield potential.
The figures communicated by the Wheat Quality Coucil show in the zones observed since the beginning of the week in Kansas, a potential in increase compared to the last years.
However, the estimate for Kansas will be finalized next Thursday by integrating the potential yields of the areas most affected by the climatic adversity of winter.
In this context, Chicago wheat fell 18.75usc/bu to settle at 679.25usc/bu.
Minni fell 16.5usc/bu to close at 697.5usc/bu.
Kansas closed at 633.75usc/bu, down 14usc/bu.
The corn market finished unchanged while beans shed 36usc/bu to close at 1538.25usc/bu.
Corn basis bids, meantime, were steady to firm after rising 2 to 10 cents higher across a handful of Midwestern locations.
Soybean basis bids were steady to soft – particularly at Midwestern processors, where bids dropped 5 to 10 cents lower across five separate locations.
From South America, Brazil’s Agroconsult has made significant cuts to its estimates for the country’s second corn crop, lowering it 15% from past projections.
The country has faced an abundance of dry conditions in recent weeks.
Consequentially, Brazilian corn crop its seen at 91.1Mt – USDA currently at 103Mt – that equates to an extra 2.6m/ac of US planted area to balance assuming their latest guess at yield.
Also on European market, prices marked a decline in a general context of relaxation yesterday.
The profit-taking movement started last week was also confirmed by the figures in the position report communicated by Euronext where non-commercial players have increased sales or reduced their positions.
In this context, Euronext fell back heavily into the red in the face of sluggish oil and significant climate improvements across the northern hemisphere.
Germany’s national stats office pegged 2021 wheat plantings at 2.83mha, up 3pc over last year at the expense of barley which was down sharply, whit a wheat production potential at 22.66 Mt, an increase compared to last year and slightly higher compared to its previous estimate.
Winter barley production is also expected to increase to 8.97 Mt, the yield potential could indeed offset the posted drop in areas.
Meantime, spring barley volumes are expected to suffer from the drop in areas with production announced to be down to around 1.64 Mt.
The figures communicated by the association of German cooperatives, seen also rapeseed increase with an expected harvest of 3.62 Mt both compared to last year and compared to the latest publications.
Coceral, on its part, boosted its outlook for this year’s EU wheat harvest to 145.8Mt, from an earlier outlook for 141.5Mt compared with last year 128.5Mt.
Rapeseed production is expected at 16.6 Mt, an increase of 500 kt compared to last year.
About rapeseed, however, it should to note that prices were mainly marked by the decline in soybean and canola seed prices, leading prices to negotiate lower.
Consequentially, the current market context is maintaining high volatility, despite
From Black Sea basin, grain market players are gathering this Thursday and Friday for the Black Sea Grain conference in Kiev.
Among other things, the discussions will most certainly focus on the prospects for so-called late cultivated areas that some traders are reviewing downwards, particularly in corn due to the current delay.
Also the level of export commitments for the 2021/22 campaign will be discussed with in particular a possible confirmation of rumors of 3-4 Mt of 2021 harvest maize already sold to China by Ukraine.
Finally, it is certain that the various speakers will have to share their vision regarding the upcoming price development in the current context of pressure.
Aussie new crop markets dipped again yesterday; wheat was down $3-4/t on the boards, and barley for January 21 was $1-2/t softer.
Canola was up $5/t along the east coast and unchanged in WA port zones.
Current crop values remained unchanged on wheat, with liquidity still flowing for prompt demand.
Barley continues to catch a bid for June/July slots through Victoria with delivered Geelong/Melbourne values around the $275-280/t range.
On the international trade scenario, Taiwan purchased 2.4 million bushels of corn, likely sourced from Argentina, in an international tender that closed earlier today.
The grain is for shipment in August.
Algeria bought 300-400,000t of optional origin milling wheat at USD$295/t cnf.
The grain is for shipment beginning in July.
Tonight we will see how the sessions close.
