US grain prices were mixed yesterday, with some contracts that moved back into the green after traders resumed a round of technical buying.
In deed, soybeans, rising nearly 1.5% higher and grabbing double-digit gains by the close, were the big winner.
Corn and winter wheat contracts, on the other hand, moved only moderately higher in a sometimes-choppy session.
Spring wheat, meantime, was the big exception, as spilled 2% lower following recent yield-replenishing rains in Canada.
On macro markets, Brent crude futures in preopening are up 37 cents, or 0.5%, at $72.59 a barrel at 05.20 GMT and earlier rose to $72.83, the highest since May 20, 2019, and closed yesterday session rosing 1%.
Also U.S. West Texas Intermediate (WTI) crude futures are jumping 39 cents, or 0.5%, to $70.44 a barrel after rising to as high as $70.62, the most since Oct. 17, 2018.
Yesterday, WTI prices climbed 1.2%.
The recent traffic data suggests travellers are hitting the roads as restrictions ease.
TomTom data showed traffic congestion in 15 European cities had hit its highest since the coronavirus pandemic began.
Meantime, the U.S. Energy Information Administration yesterday forecast fuel consumption growth this year in the United States, the world’s biggest oil user, would be 1.49 million barrels per day (bpd), up from a previous forecast of 1.39 million bpd.
In another positive sign, industry data showed U.S. crude oil inventories fell last week, in line with analysts’ expectations.
The American Petroleum Institute reported crude stocks fell by 2.1 million barrels in the week ended June 4.
Meantime, investors are still wary of US inflation trends and the potential for rising interest rates, even if they had plenty of positive data to digest, including an all-time record job openings in April.
However, widespread internet outages and a bearish market sentiment about US trade data, led to mixed results from the stock market yesterday.
On Wall St., indeed, the Dow fell 30 points trading to 34,599.
The Nasdaq rose 43,19 point, to close at 13.924,91.
The S&P 500, gained only 0,74 point, reaching 4.227,26.
The U.S. Dollar firmed moderately.
According to the report released yesterday morning by the U.S. Bureau of Economic Analysis and the U.S. Census Bureau, indeed, U.S. monthly international trade deficit in April 2021, decreased from $75.0 billion in March (revised) to $68.9 billion in April, as exports increased, and imports decreased, however, it remain in any case a big negative record.
Coming back on grains market, corn prices moved moderately higher on a round of technical buying that was largely supported by hot, dry weather forecasted for the central U.S. over the next few weeks.
Spillover strength from soybeans lent additional support.
Corn quality took a four-point hit this past week, moving from 76% rated in good-to-excellent condition down to 72% through Sunday.
Analysts were more bullish on quality ratings but did expect to see a two-point drop from a week ago.
Another 23% is rated fair (up three points from last week), with the remaining 5% rated poor or very poor among the top 18 production states (up one point from last week).
Physiologically, 90% of the crop is emerged, up from 81% a week ago.
Soybean prices, meantime, traded nearly 1.5% higher after a round of weather-related technical buying handed out double-digit gains.
Soybean planting progress reached 90% through Sunday, in line with analyst expectations and up from the prior week’s mark of 84%.
It’s also moving along at a faster clip than 2020’s pace of 84% and the prior five-year average of 79%.
Emergence reached 76%, compared to the prior week’s mark of 62% and much faster than the prior five-year average of 59%.
USDA’s first look at soybean quality ratings were lower than expected.
Analysts offered an average trade guess of 70% rated in good-to-excellent condition prior the report, but the agency showed 67% of the crop with those ratings.
Another 27% of the crop is rated fair, with the remaining 6% rated poor or very poor.
Wheat prices were mixed after some uneven technical maneuvering.
Winter wheat contracts carved out modest gains, while spring wheat contracts tumbled 2% lower.
Spring wheat plantings are complete this year, with 90% of the crop now emerged.
That’s up from 80% a week ago and faster than both 2020’s pace of 79% and the prior five-year average of 86%.
Spring wheat quality is on its heels, meantime, dropping five points to 38% of the crop rated in good-to-excellent condition.
Analysts were anticipating a three-point drop.
Meantime, winter wheat quality improved two points, in contrast, with half of the crop now rated in good-to-excellent condition.
Analysts expected USDA to hold ratings steady from a week ago, when 48% was rated goodto-excellent.
Physiologically, 85% of the winter wheat crop is now heading, up from 79% last week and just behind the prior five-year average of 86%. Harvest nationwide is on the board with 2%.
In this context, corn basis bids were mostly steady to weak after falling 1 to 10 cents lower across a handful of Midwestern locations.
An Illinois river terminal bucked the overall trend after firming 2 cents.
Also soybean basis bids were mostly steady to weak, seeing some substantial drops by as much as 25 cents at an Ohio river terminal.
Also for soybeans, an Illinois river terminal bucked the overall trend after firming 4 cents higher, however.
USDA, meantime, will release its first report of the month tomorrow morning, the World Agricultural Supply and Demand Estimates (WASDE) report.
After that, USDA will pubblished Grain Stocks and Acreage data, out June 30.
In this context, traders are positionig and will be very cautious.
From south America, in Argentina, despite the firmness of the soybeans, crushing activity reached a 6-year high in April, as a result of the firmness of the oils.
Meantime, Argentinian ports were subject to another seven-hour strike by workers who were protesting the lack of access to COVID-19 vaccinations.
It is affecting all import and export operations.
Argentina is one of the world’s top corn, soybean and soymeal exporters.
On European market, relatively calm session thaere was yesterday on Euronext.
Corn prices stood out again, in a context where availability on the physical market is scarce and where the lean season should be under the sign of tension.
While wheat was more hesitant.
Despite the support of soybean oil, European oilseed rape has made only limited gains, as palm oil losed ground in Kuala Lumpur and canola too in Winnipeg.
Agreste, however, anticipates a French winter colza harvest of 2.95 Mt, the lowest harvest recorded in two decades (4.36 Mt on average)!
Franch Ministry of Agriculture , indeed, yesterday posted its estimates of the following areas for the different crops:
Soft wheat: 4.9 million hectares compared to 4.3 last year;
Durum wheat: 275,000 ha compared to 252,000 last year;
Winter barley: 1.21 million ha against 1.18 last year;
Spring barley: 600,000 ha compared to 795,000 last year;
Rapeseed: 986,000 ha compared to 1,114,000 last year.
In this context, the winter barley production is expected by the ministry at 7.74 million tonnes and that of rapeseed at only 2.95 million tonnes as we just said.
From Black Sea basin, there’s increasing noise around the winter wheat belt in Russia going from a concern to a problem.
Excess moisture at the business end of the growing season has led to concerns about quality.
The repeated rains of recent weeks have left behind a significant pressure in fungal diseases.
Septoria and fusarium wilt are more particularly targeted.
However, with global protein spreads relatively tight and the need to feed more wheat this year due to corn tightness, a lower quality Russian wheat crop may not be the worst thing.
In fact, a number of operators are anticipating a larger than usual share of feed wheat in Romanian, Ukrainian and Russian harvests this year.
Despite these doubts, the quality premiums for the 2021 harvest have remained unchanged for several weeks.
The feed is discounted by 5 usd / t compared to 11.5%, while the 12.5% is remunerated 1 $ / t more than the 11.5%.
Meantime, customs data showed that Russian wheat exports for the first four months of the year topped 350 million bushels.
That was a year-over-year decrease of around 8.7%.
Russia is the world’s No. 1 wheat exporter.
From India, India has stepped up corn exports as a rally in global prices to their highest since 2013 has made shipments from the South Asian country competitive, easing concerns about rising food inflation in Southeast Asia.
Indian exporters have signed deals to sell around 400,000 tonnes of corn for shipment in June to July to animal feed producers in Vietnam, Malaysia, Sri Lanka and Bangladesh, according to two Singapore-based feed grain traders.
Cheaper corn supplies from India would keep the cost of animal feed lower for consumers of meat and chicken in Asia, who are among the most vulnerable to high food prices.
Indian corn is being quoted at $295-$300 a tonne, including cost and freight (C&F), for sale to Southeast Asia as compared with $330 a tonne, C&F, for South American corn, the two trading sources said.
Traditionally, India has been a regular corn seller to Asian buyers, but rising domestic animal feed consumption curbed sales in recent years.
Until mid-2020 Indian prices were higher than global prices, but due to the recent rally in global prices, Indian corn has become competitive in the world market.
Local demand from the poultry industry is also a bit subdued because of the coronavirus outbreak.
That has helped to export more.
Indian exports are expected to reach around 2.6 million tonnes in 2021, the highest in seven years, traders and analysts estimated.
However, total Indian corn supplies are likely to be limited by competition from other crops.
Farmers, indeed, are likely to reduce area under corn crop this year as soybeans and pulses are giving them better returns.
If that happens, surplus for exports will be limited.
From Australia, wheat markets remained relatively unchanged for the day on both new and old crop.
Jan 22 ASX wheat contract settled down $2.50/t to $312/t.
Barley was also steady for the day with values largely unchanged.
Again we saw more gains in the new crop canola market along the east coast delivered into the crushes up $10/t.
Winter has hit!
Cold snaps have hit most of SA and the east coast with temps dropping, but rain has been falling and growers are happy with the precipitation received thus far keeping crops in the game.
On the international trade scenario, Egypt purchased 60,000 metric tons of soyoil and 40,000 MT of sunflower oil in an international tender that closed earlier today.
The oils will be for arrival in August.
Algeria would have bought around 480,000 t of optional wheat at an average price of between 297.50 and 298 usd / t cif.
Japan issued a regular tender to purchase 6.7 million bushels of food-quality wheat from the United States, Canada and Australia that closes later this week.
Of the total, 52% is expected to be sourced from the U.S.
The grain is for shipment in August.
Jordan issued two separate international tenders to purchase a total of 4.4 million bushels of milling wheat from optional origins that close June 22.
The grain is for shipment in December.
Tonigth we will see how the sessions close.