Grain prices struggled yesterday on Chicago to stay on green, as dry weather is expected to move across the central U.S. later this month, .
Soybeans and wheat ultimately succumbed with most contracts that did have double-digits losses.
Meantime, corn was most divergent with July futures dropping 0.75% while September futures closed more than 2% higher.
On macro markets, energy futures trended lower, with crude oil sliding 0.5% lower, staying however above $69 per barrel.
Gasoline was down 0.75%.
Diesel faced a much smaller drop of around 0.1%.
Weighed down by losses from the financial and material sectors,
on Wall St., the Dow dropped 126 points trading to 34,630, mentime, the U.S. Dollar softened moderately.
The US sees the latest round of higher domestic prices, however, mostly due more to supply-chain issues than systemic inflation.
Coming back on grains market, corn prices were mixed.
Corn crop conditions in good-to excellent rating (G/E) was lowered to 72pc overnight vs 76pc last week and 75pc last year.
Corn export inspections saw moderate week-over-week declines last week, spilling to 1.413.073 tonne.
That was on the very low end of trade estimates.
China was again the No. 1 destination.
Cumulative totals for the 2020/21 marketing year still managed to extend its already impressive lead over last year’s pace, now at 29.876.128 tonne.
Soybean prices, meantime, fell as much as 1.4% lower, with August futures dropped 13.75 cents to $15.2375.
In contrast, contracts for 2022 and 2023 moved modestly higher as soybeans conditions rated 67pc G/E vs. 72pc last year.
Soybean were 90pc planted vs. 84pc last week & 79pc average,
Meantime, soybean export inspections saw a modest week-over-week increase to 237.108 tonne.
That was on the higher end of trade estimates.
Mexico was the No. 1 destination.
Cumulative totals for the 2020/21 marketing year still have a commanding lead over last year’s pace, with 35.795.706 tonne.
In this context, corn basis bids were steady to weak, falling 2 to 8 cents lower at three interior river terminals and 5 to 6 cents lower at two Midwestern elevators.
An Iowa processor bucked the overall trend, rising 2 cents higher.
Also soybean basis bids were steady to soft, falling as much as 25 cents lower at an Illinois processor, although losses of 5 to 10 cents were more common.
An Illinois river terminal bucked the overall trend after rising 2 cents.
Wheat prices, on the other hand, fell on a round of technical selling, with spring wheat contracts especially susceptible to losses after some yield-friendly rains made their way to Canada this past weekend.
Spillover weakness from corn and soybeans provided additional headwinds.
However, spring wheat conditions reported by USDA yesterday nigth, was at 38pc G/E, vs. 43pc last week and 82pc last year.
According to the USDA, in add, the crop rating of winter wheats appears as good to excellent at 50%, up 2 points compared to last week.
Winter wheat harvest progress was 2pc complete vs. 7pc average.
The others data showed by USDA have seen sorghum planted at 52pc, vs. 41pc last week & 59pc average.
Sorghum conditions was 74pc G/E vs. 55pc last year.
Barley conditions was at 43pc G/E, vs. 48pc last week & 79pc last year.
The vegetative state of the crops is therefore said to be in advance at this stage, which does not reassure traders as to their sensitivity to a water deficit.
Wheat export inspections, meantime, climbed nearly 61% higher week-over-week, to reach 418.547 tonne.
That was on the upper end of trade estimates.
The Philippines led all destinations.
Cumulative totals for the 2021/22 marketing year, which began June 1, are just at 235.496 tonne, but that only accounts for three days of reporting so far.
On Euopean market, dry and hot climatic conditions in North America are pushing up both EU grain prices and rapeseed.
Euronext, indeed, started its week on a positive note given the climatic risks which are developing across the Atlantic.
Meantime in Europe, the weather is considered very favorable with the return of the high pressure allowing a promising harvest to be envisaged.
Per the latest data from the European Commission, 2020/21 EU corn imports have reached 13.56 million tonnes, through June 6, against 18.89 million last year to date: a year-over-year decrease of 28.2% so far.
European Union soybean imports for the 2020/21 marketing year have reached 523.2 million bushels through June 6, tracking fractionally below last year’s pace so far.
EU canola imports are up slightly year-over-year, meantime, and EU soymeal imports are moderately behind the prior year’s pace.
European Union soft wheat exports for the 2020/21 marketing year have reached 24.71 million tonnes through June 6, against 33.27 last year to date.
That’s a year-over-year decrease of 25.7% so far.
EU barley exports are trending fractionally lower than last year’s pace, with 7.02 million tonnes.
France, the European Union’s biggest grain producer, is expected to produce 7.74 million tonnes of winter barley in 2021, up 19.3% compared with last year’s crop, the farm ministry said on this morning.
In its first production forecasts for 2021 harvests, the ministry projected the winter rapeseed crop at 2.95 million tonnes, down 9.2%.
In this context, rapeseed prices, remaine on the rise, also in the wake of soybean oils and canola in particular as demand for biodiesel increased, supporting prices.
However, this morning in Kuala Lumpur the palm is down.
From Black Sea area, climatic conditions in Russia are favorable in the south, however, it is not the same for spring wheats.
One of the main fears also relates to the qualitative aspects.
Russian growers have practically completed the work on establishing spring crops.
Already 50 Mha of all crops have been sown, with finally a small advance compared to last year despite the delay accumulated at the beginning of spring.
Already 12.9 Mha of spring wheat have been sown, which represents an increase of 600,000 ha compared to last year, despite the export tax which remains in force.
This increase in wheat areas can be explained above all by the reseeding of wheat following winter losses, particularly in the central district of the country.
This increase in wheat areas is at the expense of barley areas which however will not be subject to the export tax regime during the new season and which could thus benefit from a higher price than that of wheat, all the while. less at harvest time.
In this context, Russia’s Institute for Agricultural Market Studies (IKAR), has boosted its production estimates for the country’s 2021 wheat crop by 0.6% or by 500,000t, to 80 million tonnes (Mt).
That would still be a year-over-year decline of 6.9%, if realized.
Russia is the world’s No. 1 wheat exporter.
There are signs that food inflation is biting in Russia as their Minister of Economic Development announced they are prepared to expand export curbs on key food products.
From the Middle Kingdom, China, which is by far the world’s largest soybean importer, has seen soybean imports rise 12.8% year-over-year for the first five months of 2021, with a massive tally of 1.405 billion bushels.
Last month’s totals alone were for more than 353 million bushels as China ramped up purchases of Brazilian beans.
Meantime, China has issued new import regulations that will come into effect on Jan 1, 2022.
The new rules target commodities destined for human consumption and will add another list of requirements for companies and countries selling their goods to China.
From Australia, ABARES released their latest June Crop Report and had the following production estimated for 21/22 winter crop:
Note that we are at the beginning of winter on this continent and that we are still far from the harvest (around December).
Australian markets were touch stronger to kick off the week.
On the boards we saw current and new crop wheat firmer by $1-2/t, barley also showing gains of $1-2/t.
More old crop barley continued to be let go through SA and Vic through the trade.
We are continuing to see parcels firm up for the July delivery window as grower truck fleets become more available and the urea programs kick in.
Rain through SA in the past 24 hours has been a saving grace for growers.
Parts of the Eyre Peninsula received upwards to 20mm, the Mid-to-Lower North also recorded upwards to 20mm.
Smaller totals have been recorded through the Upper South East and Mallee region with 2.6mm received at Loxton.
More showers pushing across over the day.
The Victorian Wimmera also has recorded falls of upwards to 8-10mm which will keep crops drip-fed for now
With the 4-day BOM forecast for northern NSW and southern Queensland predicting 15-25mm, the sorghum yet to be harvest could potentially throw up some more issues on quality with more sprouting and lodging.
On the international scene, the Algerian tender is eagerly awaited.
Algeria, indeed, issued a new international tender to purchase 50.000 tonne of milling wheat that closes today, although the country often buys more than the nominal amount listed.
In fact, a major uncertainty is the volume that will be retained.
The grain can be sourced from optional origins and is for shipment in July and August.
However, according to traders, German and French origins could be selected.
Japan’s Ministry of Agriculture sought 181,355 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender.
Japan, the world’s sixth-biggest wheat importer, keeps a tight grip on imports of the country’s second-most important staple after rice and buys the majority of the grain for milling via tenders typically issued thrice a month.
Tonigth we will see how the sessions close.