A big purge yesterday on Chicago grains market.
The meteorological situation in the USA that forecast new for next 10-day new precipitation and milder temperatures, Chinese restrictions on trading by commodity houses there and US Federal Reserve monetary policy meeting’s that projected ithat interest rates could move up sooner than last predicted with the possibility of two hikes before 2023, have triggered a broad selloff sent stocks, crude oil, metals, livestock and other commodities.
It was a really bloodbath on the boards.
Corn and soybean prices closed the session limit down tumbling around 7-8% lower overnight as rain arrived in Iowa.
Soybean oil has again fallen sharply and dragged European rapeseed below the symbolic threshold of € 500 / t, at its lowest level since last February!
Canola was displayed in limit down in a context of coming rains in the south of Canada.
Some wheat contracts were relatively spared, but all contracts were down double digits, whit SRW and HRW markets off 4pc.
Lean hogs crashed the expanded limits and both cattle contracts were down despite the weaker grain prices.
On macro markets, energy futures also tilted lower, with crude oil down 1%.
Gasoline also dropped about 1% and diesel down more than 1.75%.
On Wall St., the Dow dropped 210 points to 33,823.
The U.S. Dollar firmed moderately.
Coming back on grains market, corn prices closed session limit down, pressured by a broad commodity selloff and the prospect for improved weather forecasts in the Midwest and Plains later this month.
Rains remain on the forecast map, and the confirmation of rains starting to fall in Iowa has built confidence there.
Widespread falls of 1-2+” are forecast across the corn belt this weekend with more to come later next week on extended outlooks.
Soybean prices caught the worst losses of any grains, tumbling 8% lower.
Uncertainty over government policy Biden in terms of obligations to incorporate biodiesel weighs on the soy complex.
Worries over a record-breaking Brazilian harvest and better weather conditions ahead for the U.S. applied additional headwinds.
Wheat prices followed corn, soybeans and a broad range of outside commodities lower.
Worries about the competitiveness of U.S. grain abroad applied additional headwinds.
In fact, in addition to the favorable weather forecasts for the next few days, we have note the weakness of export sales that added to yesterday’s selling pressure.
US regular export sales, indeed, was fairly quiet, with 287,000t wheat, 276,000t corn, and only 6,500t beans after Chinese cancellations.
Old crop corn sales tumbled 95% below the prior four-week average.
New crop sales fared better but were still disappointing overall.
Corn export shipments were much more robust, but that was still 16% below the prior four-week average.
Old crop soybeans were tepid meantime new crop sales was chipped again.
Soybean export shipments tumbled 48% below the prior four-year average to a marketing-year low.
Wheat export sales reached the lower end of trade estimates.
Cumulative totals in the new marketing year have started off a bit slowly compared last year.
Wheat export shipments were just under 11.0 million bushels.
In this context, corn basis bids showed plenty of variability across the central U.S. Thursday, moving as much as 15 cents higher at an Indiana ethanol plant while sliding as much as 5 cents lower at an Illinois river terminal.
Soybean basis bids eroded 15 cents lower at an Indiana processor while firming 3 cents higher at an Illinois river terminal.
Other locations across the Midwest held steady.
The funds were net sellers yesterday for 30,000 lots of corn, 30,000 lots of soybeans and 15,000 lots of wheat.
Daily futures limits have been pushed up for today’s trading sessions with corn to 60¢ and and 150 cents in soybeans after yesterday’s large moves.
From South America, another port strike is set for Argentina, though this time it is not ag-specific and is only for 24 hours.
Reportedly striking in protest against slow vaccine rollouts there.
To stay in Argentina, corn yields are revised upwards and the Buenos Aires Stock Exchange has an estimated harvest of 48 million tonnes.
57% of wheat areas are estimated to have been established yesterday.
On European market, Euronext fell back violently into the red, in the wake of a highly disrupted American market.
The current rains in the form of thunderstorms in France are welcome, provided that they do not cause damage, and that they stop in the coming days so as not to compromise the qualitative aspects.
As we said, rapeseed showed a sharp decline yesterday, particularly in the wake of soybean oils.
The strengthening of the dollar against the euro was not sufficient to limit Euronext’s losses.
From Black Sea basin, in Russia, although conditions remain favorable in the south of the country, some analysts are still warning of a water deficit situation in the central zone, mainly impacting spring wheat.
As of June 17, Russian spring crops were sown on an area of 51.6 Mha, or 100.3% of the target, according to the latest official data.
Record areas were recorded for spring wheat – 13.1 Mha, or 103.2% of estimates, and sunflowers – 9.1 Mha, or 106.9% of the planned area.
The significant increase in the areas devoted to these two crops is explained in particular by the need to reseed winter crops on a large scale in the central regions of the Black Earth and the Volga.
In Ukraine, analyst APK-Inform has slightly raised its estimates for the country’s 2021 corn production, to 1.424 billion bushels.
Ukrainian analyst APK-Inform lowered its forecast for the country’s 2021 wheat production by 1.3% from prior estimates, moving it to 1.002 billion bushels.
The group’s export outlook remained steady, at 725.7 million bushels.
From Australia, local markets wide-eyed this morning after yesterday’s global move, but Australian people are very nice to see the $A back to US75.5¢, cushioning the impact slightly in $A terms.
Weather maps are continuing to build this moisture outlook back up.
There is now a fairly widespread 15-20mm east coast forecast and 15-30mm across the WA wheat belt.
On the international scene, we note the purchase by Japan of just over 207,000 t of milling wheat from the USA, Canada or Australia.
Of the total, 53% was sourced from the U.S..
The grain is for shipment in August.
Turkey is once again shopping for of milling wheat.
Indeed, Turkey issued an international tender top purchase as much as 395,000 t of red milling wheat from optional origins with a deadline of June 30.
The grain is for shipment in July and August.
Yesterday, private exporters reported to USDA the sale of 135,000 metric tons of soymeal for delivery to the Philippines during the 2020/21 marketing year, which began October 1.
Tonigth we will see how the sessions close.
