Divergent markets yesterday, with grain prices mixed but mostly lower for closing the sessions.
Indeed, on US market, corn was the lone bright spot, with nearby contracts rising 0.75% on export optimism after USDA’s latest data showed robust volume for both sales and shipments this past week and after the USDA has communicated another 1.22 Mt of corn sold again to China.
Since last Friday, the cumulative volume of exceptional sales to this destination has exceeded 7 Mt over the past week alone.
Consequently, the corn market in Chicago tried to show a rebound, also helped by the still delicate situation in Brazil, both in the old season and in the new harvest, without however succeeding in retracing the downward trend recorded last Friday.
Soybeans prices started the session with modest gains but closed the session into the red, with losses of around 0.4%.
The pressure from a slowdown in US export sales, from a likely record-breaking Brazilian harvest and from a large U.S. crop that’s currently being planted, pushed the prices lower.
Wheat prices, on their part, were mostly modest, although Kansas City HRW contracts slid more than 1% lower, eroded by a round of technical selling spurred by improving weather, by yield prospects for the U.S. winter wheat crop and ongoing stiff competition from overseas competitors.
The final estimate from the 2021 Wheat Quality Council Hard Winter Wheat Tour is 365 million bushels for Kansas.
That was calculated over 350 stops by fewer than 50 participants this year, with wheat yield potential at 58.1 bushels per acre, which is the group’s highest projection in more than 20 years and well above the tour’s prior five-year average of 43.1 bpa.
Kansas is the US’s No. 1 wheat producer.
On macro markets, energy futures were back into the red, on the wake of concerns come from India, as on Wednesday reported more coronavirus deaths in a single day than any other country at any time during the pandemic, while infections continued to spread through vast rural areas with weak health systems.
The Health Ministry reported a record 4,529 deaths in the past 24 hours, driving India’s confirmed fatalities to 283,248.
It also reported 267,334 new infections, as daily cases remained below 300,000 for the third consecutive day.
So, crude oil dropping another 2.2%.
Diesel and gasoline saw similar percentage losses.
Meantime, initial claims for US unemployment benefits fell 34,000 to a seasonally adjusted 444,000 for the week ended May 15, the Labor Department said.
That was the lowest since mid-March 2020 and held claims below 500,000 for two straight weeks.
Economists polled by Reuters had forecast 450,000 applications for the latest week.
Claims remain well above the 200,000 to 250,000 range that is viewed as consistent with healthy labour market conditions.
They have dropped from a record 6.149 million in early April 2020.
This was a signal to investors that the economy continues to move in the right direction.
Consequently, the cypto sector rebounded with many of the NFT’s up 4-5% overnight, and on Wall St., the Dow climb 188 points higher to 34,084.
The U.S. Dollar, meantime, softened moderately.
Coming back on grains market, old crop corn sales only reached 10.9 million bushels last week, but new crop sales soared to 159.9 million bushels on the back of some very large recent sales to China.
That made for a total tally of 170.8 million bushels.
Cumulative totals for the 2020/21 marketing year widened its lead over last year’s pace, with 1.862 billion bushels.
Meantime, corn export shipments carved out a new marketing-year high, with 88.2 million bushels – besting the prior four-week average by 23%.
China was by far the No. 1 destination, with 39.8 million bushels.
Soybean exports found old crop sales dropping 11% week-over-week to 3.1 million bushels.
New crop sales added another 3.5 million bushels for a total tally of 6.6 million bushels.
Cumulative sales for the 2020/21 marketing year remain well ahead of last year’s pace, with 1.282 billion bushels.
Soybean export shipments, meantime, firmed 20% above the prior four-week average to 12.3 million bushels.
Mexico topped all destinations, with 3.8 million bushels.
Old crop wheat sales improved 21% above the prior four-week average to 4.4 million bushels.
New crop exports found additional sales of 11.7 million bushels, for a total tally of 16.1 million bushels.
Cumulative totals for the 2020/21 marketing year still have a modest lead over last year’s pace, with 866.2 million bushels.
Wheat export shipments inched 3% ahead of the prior four-week average to 20.9 million bushels.
The Philippines led all destinations, with 4.1 million bushels.
In this context, Chicago wheat continued to slide, down another 4usc/bu to close at 675.25usc/bu but it was Kansas wheat that led the charge, falling 8.75usc/bu to settle at 625usc/bu.
Spring wheat was more muted, only falling 2usc/bu.
Meanwhile corn rallied 6.25usc/bu to settle at 664.5usc/bu.
Soybeans fell 5usc/bu to close at 1533.25usc/bu.
Meantime, corn basis bids were mixed at three interior river terminals, sliding a penny lower at two Illinois locations while firming 5 cents lower at an Iowa location.
Bids held steady elsewhere across the central U.S..
Soybean basis bids dropped as much as 15 cents lower at an Indiana processor and firmed as much as 2 cents higher at an Illinois river terminal, while holding steady at most other Midwestern locations.
From South America, according to the AgroBravo, acreage increases and infrastructure improvements helped set the stage for record-breaking soybean production in Brazil this season, despite there were, more than a few weather challenges along the way.
These factors, resulted in a new record soybean production of 4.9 billion bushels, a growth of 8.5% from last year
These big figures were also motivated by the high international prices, strong exports, and increase in domestic demand.
The announcements of an increase in harvests in Argentina by the Buenos Aires Stock Exchange, where less than 15% of the areas to be harvested remain, are also weighing on the market with a production figure still hoped for at 43 Mt.
On the European market grains offered a bit of air Thursday evening despite still reassuring news on the supply side.
Indeed, prices rebounded, especially in corn.
The more attractive prices, compared to the last few weeks, has lead to new purchasing achievements for importing countries.
Algeria has notably given some energy to the trend by buying 330 kt of milling wheat for the next harvest, at 295 $ / t C&F, which represents a clear increase compared to the first Algerian tender last year.
A good part of the contracted volume would be of French origin.
The loads are from July.
In oilseeds, rapeseed prices were trying, after the decline of the day before, to consolidate on a first support zone.
However, despite an announced tense context for the new harvest, is still subject to price adjustments due to the recent easing in prices for soybeans, canola and palm oil.
From Black Sea basin, russian producers are catching up at great speed for the delay previously accumulated in the spring sowing campaign.
The investments made in equipment in recent years translate into a strong reactivity today.
Thus, the spring wheat sowing is advanced at 60% with 7.5 Mha planted against an objective put forward by the authorities at 12.6 Mha.
This is also the culture for which little progress is observed.
Spring barley, corn and sunflower are 75-80% advanced.
Recorded rainfall through the higher yielding parts of the Russian belt have been plentiful – too much some are arguing while parts of the spring wheat belt are looking for a drink.
Too much rain is a hard fundamental to buy in ag.
Meanatime, the USDA attaché has pegged the Russian crop at 77.5 million tonnes (Mt) vs the WASDE at 85Mt.
From the Middle Kingdom, chinese purchases of Brazilian soybeans saw a more than tenfold increase between March and April, jumping from 11.6 million bushels up to 186.7 million bushels.
Chinese purchases of U.S. soybeans also moved 223% higher between March and April, climbing to 79.0 million bushels.
China is by far the world’s No. 1 soybean importer.
Aussie new crop cash markets again slipped over the course of the trading day yesterday to be off another $2-3/t across the board.
Wheat now down $10-12/t over the course of the week.
Barley in Victoria caught a bid on the new crop and was firmer by $1-2/t.
Canola values were off hard with delivered into the east coast crushers down $15-20/t.
Current crop markets again remain stagnant, and the liquidity just continues to turn over to meet the nearby demand.
Delivered market continue to trade for June/July, while system-based grain ticks over slowly.
The spreads remain wide on track-to-delivered out to $25/t, the issue remains on logistics and ability to outturn that grain back into port or domestic home as trucks and trains still providing headaches around Australia.
LSC vessel lineups are still showing 4Mt of total grain with ETDs in May.
The June projected sailings currently dropping back to 2.2Mt.
Its expect to see some May roll into June given the logistical challenges out there and it does sound like the wheat forward book remains strong in June/July.
On the international trade scenario, a South Korean feed group purchased 60,000 metric tons of soymeal, which can be sourced from the United States, South America or China.
The grain is sought for arrival by November 10.
Algeria’s state grains agency, as we said, has purchased around 14.7 million bushels of milling wheat from optional origins in an international tender.
The grain is for shipment in July.
Tonigth we will see how the sessions and week close.
