Corn trended significantly higher yesterday on Chicago, with more than 6% of gains.
Soybeans and wheat also enjoyed substantial gains.
On macro markets, energy futures also made some positive inroads.
Crude oil tracked nearly 1%.
Diesel rose 0.5%.
Gasoline saw fractional gains.
Meantime, after investors digested a round of better-than-expected jobs data, on Wall St., the Dow moved 141 points higher to 34,464.
The U.S. Dollar, on the other hand, softened slightly.
A geopolitical element to be certainly taken into account for the coming weeks, the reaction of China to the desire of the Biden government to investigate the origin of the covid pandemic.
Coming back on grains market, the IGC yesterday in its monthly report revised upwards the world production of all grains to 2,292 billion tonnes against 2,220 last year.
The first grain produced in the world, corn, is expected at 1.194 billion tonnes.
However, traders refocused their attention on strong corn export demand after USDA reported huge sales from this past week in its weekly recap and reported an other large corn flash sale.
That triggered a round of short-covering and technical buying that pushed all prices higher by the close, with Chicago corn July contracts finished the session limit-up.
US sales of corn internationally came out in line with market expectations last week, at 6.25 Mt, including 556 kt from the old harvest, which surprised many operators.
Particulary corn found support in the selling activity of recent days to China, coupled with the fact that dirty exports do not show significant volumes canceled, contrary to rumors of recent days.
In fact, the United States will already accumulate 14.6 Mt over the next harvest, a historic record that is significantly higher than the sales recorded last year during the same period!
In add, the first estimates of corn imports by China for the next season are displayed at 26 million tonnes.
Wheat prices rose sharply yesterday, both for technical reasons and on fears of a water deficit on the great plains of the northern United States.
Export sales are posted this week at 403,000 t within the range of expectations.
Soybean prices finally moved higher for the first time in eight sessions on a round of technical buying and short-covering partly spurred by spillover strength from corn.
However, plenty of forecasted rain across the central U.S. will make it harder to find longer-term momentum without some other fundamental supply or demand news hitting the market.
Soybean exports was on the lower end of trade estimates, and soybean export shipments slid 4% below the prior four-week average.
In this context, corn basis bids fell 5 cents at two Midwestern processors while firming a penny higher at an Illinois river terminal and holding steady at most other central U.S. locations.
Soybean basis bids inched a penny higher at an Illinois river terminal while spilling 10 cents lower at an Iowa processor and an Indiana processor.
Other locations across the central U.S. held steady.
From South America, The Buenos Aires Grains Exchange is now predicting Argentina’s 2020/21 soybean production will reach 43.5 million tonnes against 43.0 estimated last month, moving modestly above the group’s prior estimate – citing better-than-expected yields coming in so far in the country’s Cordoba and Santa Fe provinces.
Argentina’s ports strike came to a quick end with port workers being given priority to get their COVID vaccine.
The break has unearthed a raft of demand although it appears little has been physically booked.
Also on European market, we have seen a ppectacular rebound in prices for all products yesterday, proving, if it was still needed, the extreme volatility on all markets.
This is linked to intense activity on the part of financial funds since the fundamental balances have hardly changed.
The end of the 20/21 season promises to be very tense and once again pushes up wheat prices.
Meantime, the European Commission for its part has raised its estimates for EU 2021/22 soft wheat production by 1.1% from a month ago to reach to 126.2 million tonnes against 124.8 estimated last month.
That would be 6.5% above the current marketing year, if realized.
EU soft wheat exports for 2021/22 are estimated to reach at 30 million tonnes against 27.0 million in the previous campaign..
However, the end-of-season stock to come 2021/2022 is revised downward estimated at 10.8 million tonnes against 11.4 estimated last month.
Rapeseed, for its part, took advantage of the strong rebound in Canadian canola to afford a small outbreak (however insufficient to make up for the losses accumulated over the past two weeks).
Canadian crops require more rain, and the seven-day weather charts are hardly reassuring.
From South Africa, Crop Estimates Committee is estimating a 6% year-over-year increase for the country’s corn production this season, reaching 637 million bushels.
That’s slightly below the average trade guess from six traders and analysts, which came in at 646.2 million bushels.
From Black Sea basin, the depression in place over the Black Sea area brings its significant share of precipitation.
The Romanian plains as well as those of central Ukraine and the Russian Kuban have been well watered during the last 7 days with more than 30 mm.
For the next 7 days, the weather models anticipate just as heavy rains and which should even affect areas that have remained dry recently, namely the south-eastern Ukraine as well as the central Russian district.
These rains bode well for the production potential of the widely harvested wheat in the region, although appropriate fungicidal protection will be necessary to preserve the quality of the future harvest.
The main spring wheat producing areas in Russia are unlikely to benefit from this rainy episode.
From the Middle Kingdom, China rainfall has been lagging in parts of the growing corn belt.
The northern crop is in the ground and mid-season (harvest Aug/Sep/Oct) and is running around 60-70pc of normal rainfall.
The southern belt is in better shape, but harvest commences in the next month.
From Australia, old crop bids finished the day slightly softer but seemingly limited liquidity as growers happy to sit aside following the recent $10/t pull back off the highs.
Freight availability is seemingly loosening into the winter months as growers can put more wheels on the road.
Patches of SNSW that have seen patchy germination in canola have a 2-week window to re-sow.
Limited areas at this stage, but yield penalties already apply to late sown crops.
More rain on the way for WA with 60-70 mm forecast for the majority of the belt.
On the international scene, Saudi Arabia is buying 720,000 t of wheat.
There are 3 unloading ports and the goods are expected between July 10 and September 30.
The USA has sold 152,400 t of corn, harvested in 2021, to an undisclosed destination.
As expected, Japan has purchased 4.6 million bushels from the United States and Canada in a regular tender that closed earlier yesterday.
Of the total, 51% was sourced from the U.S. The grain is for shipment in July.
Tunisia, on the other hand, decided to cancel its 92 kt tender because of prices considered still too high.
Tonigth we will see how the sessions close.
