Mostly favorable weather forecasts and fading US export inspection volume for the week ended May 20, was enough to push grain prices into the red yesterday.
Indeed in Chicago, even if corn and soybean losses were minimal, with most contracts only losing about 0.25%, wheat prices, in contrast, were hit much harder tumbling as much as 2% lower in a sometimes choppy session.
On macro markets, energy futures made major inroads with crude oil that rose nearly 4%, on tightening US domestic supplies.
Gasoline was up 2.25%.
Diesel trending 2.5% higher.
With a general optimism over the reopening economy, on Wall St., the Dow jumped 186 points trading to 34,393, S&P 500 future gained 41 points to 4.197, the Nasdaq rose 190 points to 13.661.
Cryptocurrencies, however, remains highly volatile following its precipitous fall last week.
The U.S. Dollar, meantime, was softened moderately, posted at 1.2230 against the euro and 73.40 against the ruble.
Coming back on grain markets, corn prices eased modestly lower on a round of technical selling largely spurred by favorable forecasts for this year’s corn crop, which is nearly all planted at this point.
Corn planting, indeed, is continuing at a sustained pace in the USA and is 90% achieved against 80% on average 5 years to date.
Corn export inspections fell to 1,727,878 tonne, which was on the lower end of trade estimates.
China was the No. 1 destination.
Cumulative totals for the 2020/21 marketing year still widened its already impressive lead over last year’s pace, climbing to 48,874,544 tonne.
In this context, corn basis bids spilled 2 cents lower at an Illinois river terminal and lost 5 cents at an Ohio elevator while holding steady elsewhere across the central U.S..
Soybean prices struggled through a choppy session to close around 0.25% lower after some technical selling, as Favorable forecasts and a swift planting pace are creating short-term headwinds.
Soybean sowing, indeed, is 75% compared to an average of 54% to date, confirming the early sowing.
Meantime, soybean export inspections suffered a moderate week-over-week decline, spilling to 193,912 tonnes.
It was still near the middle of trade guesses.
Indonesia topped all destinations.
Cumulative totals for the 2020/21 marketing year remain well above last year’s pace, with 56,217,013 tonnes.
In this context, soybean basis bids fell 4 to 10 cents lower at three Midwestern locations, while holding steady elsewhere across the central U.S..
Wheat prices, on their part, sagged on a round of technical selling yesterday largely spurred by widespread rains expected across the Northern and Central Plains later this week.
Meantime, wheat export inspections faded 13% week-over-week, falling to 573,912 tonnes.
That was still on the upper end of analyst estimates.
Japan was the No. 1 destination
Cumulative totals for the 2020/21 marketing year are holding on to a slim lead over last year’s pace, with 24,949,747 tonnes.
In this context, most contracts closed between 1.5% and 2% lower.
However, even if spring wheat plantings were 94% vs 85% average, conditions were rated only at 45% good-to-excellent which compares to an initial average rating of around 70%.
On the same wake, winter wheat was 67% headed vs 69% average with conditions rated at 47% good-to-excellent vs 48% last week and 54% last year.
This is below the expectations of traders.
Consequently today markets are seeing some gains in preopening.
From South America, even if in Brazil some rains occurred in the southern half of Brazil, the entire production of Safrina will have to be revised downwards because the rains are insufficient, or even too late in the areas already in the pollination phase.
On the european market, all grain prices continued to decline, in a movement that can still be considered as consolidation, but also on the wake of favor of more favorable weather conditions.
Year-on-year Romanian grain production in marketing year (MY) 2021/22 is projected to grow by 28 percent following last year’s severe summer drought.
Recent abundant rainfall has improved soil moisture throughout Romania.
Cold temperatures and frequent rains delayed the spring planting. With the prospects of a larger harvest, Romania is poised to reemerge as a major international grain exporter.
Wheat exports are expected to grow by 54 percent, while corn exports are expected to increase by 31 percent over the previous MY.
With this forecasts, over one million tonnes of wheat from Russia, Romania, Ukraine, and France was offered in Egypt yesterday, with prices ranged from $294.71/t to $273/t C&F.
But they purchased obviusly four cargoes of Romanian wheat, one at $273/t C&F and the other three at $277.80/t C&F, for shipment from August 11 to August 20.
Rapeseed, on its part, continue to be the product with the highest volatility in recent months.
Indeed, fell sharply yesterday on a backdrop of rising oil inventories combined with improving weather conditions in Canada and export data from Australia.
From North Africa, Egypt also announced it has built its strategic reserves back up to last for nearly six months, per the country’s Supply Minister.
They used to work on about 7 million tonnes, they got down to 6.5 million tonnes and last year they bought less than 6 million tonnes. Egypt is the world’s No. 1 wheat importer.
Algeria’s state grains agency OAIC has issued today an international tender to purchase a nominal 50,000 tonnes of durum wheat.
The tender closes on Wednesday, May 26, with offers having to remain valid until Thursday, May 27, they said.
Shipment is sought between July 1-15 and July 16-31.
Volumes in Algeria’s tenders are nominal and the country frequently purchases more than the volumes initially sought.
According to a survey of analysts from Reuters shows South African corn production could rise 7% year-over-year to 646.2 million bushels, due primarily to favorable weather conditions for the continent’s No. 1 corn producer.
That’s 2% above the prior forecast from the country’s Crop Estimates Committee, which will update its own estimate on Thursday.
From Black Sea basin, Ukrainian corn exports during the 2020/21 marketing year have reached an estimated 803.9 million bushels since last July.
Ukraine has also exported approximately 575 million bushels of wheat and 190 million bushels of barley during the 2020/21 marketing year so far.
Ukraine is among the world’s top grain exporters, although sales have trended 24% lower this year after failing to match 2019’s record-breaking harvest.
According to the Ministry of Agriculture in Ukraine, sunflower seedlings are carried out at 87.7%.
From the Middle Kingdom, among the reasons for the decline of grain prices in recent days, in addition to the profit taking on the part of funds, there is the Chinese government’s desire to limit speculation on agricultural and non-agricultural commodities, in particular aimed at national speculators.
From Australia, much-needed rain is pushing across most of SA this morning.
Parts of the Yorke Peninsula recording upwards to 11mm and Roseworthy recording 10mm so far.
A sigh of relief for farmers as it was getting to crunch time in the winter cropping program and a large proportion of SA has been dry sown.
Other areas such as upper north of SA still cannot get sowing due to lack of moisture.
This event will kick things back into gear.
Current crop markets yesterday remained steady with wheat and barley trading in small volumes again, with the same old story to keep the nearby execution and demand going.
We saw volume trade on ASX east coast wheat, with some spread trading in the July and September contracts.
New crop wheat and barley markets continued to bleed a touch lower on the bid side while offers remained unchanged.
Canola was softer by $5/t on Monday.
NSW winter program is nearing the finish line with estimated planting progress around 90-95pc with early emerged crops now desperately searching for that next 10mm of rain.
To nigth we will see how the sessions close.
