Grain prices were mixed but mostly lower on Chicago.
Nearby corn contracts were the yesterday session’s clear winner, rising 2.96% higher.
Also soybean oil futures saw gains of nearly 3%.
While soybeans picked up fractional gains.
Meantime, wheat stumbled on a round of profit-taking and technical selling with spring wheat contracts that fared worst of others, losing more than 2.75%.
On macro markets, oil prices on this morning are extending the previous day’s small gains after an industry report showed U.S. crude stockpiles fell last week, overriding trader and investor concerns about transportation curbs in some countries as COVID-19 cases surge.
In fact, Brent crude was up 25 cents, or 0.3% at $75.01 a barrel by 06.55 GMT, after edging higher on Tuesday.
U.S. crude was up 41 cents, or 0.6% at $73.39 a barrel, having risen 0.1% in the previous session.
Meantime, on Wall St., the Dow inched 9 points higher to 34,292 based on some bullish consumer confidence and home price trends.
The U.S. Dollar firmed moderately.
Coming back on grains market, all eyes are looking towards tonight’s USDA reports.
While there’s plenty of bullish optimism going around, as always it will come down to what the USDA data says.
Surveyed figures are averaging, for the acreage report, around 93.8 million acres corn and 88.9 million acres beans.
Markets all agree on some increase.
Stocks figures sare also wide-ranging, with averages about 4.1 bbu on corn and 780 mbu on beans.
However, markets will trade off the figures as they come out, regardless of what the numbers will be.
Meantime, Monday’s crop progress report from USDA showed corn quality ratings facing a one-point dip from a week earlier, with 64% rated in good-to-excellent condition through June 27.
Analysts thought the agency would raise ratings by a point, in contrast.
Physiologically, 4% of the crop has reached the silking stage, versus the prior five-year average of 6%.
The agency kept its good-to-excellent ratings for soybeans steady, at 60%.
Analysts were expecting to see a one-point improvement.
Physiologically, 96% of the crop is emerged through June 27, and 14% is blooming, which is ahead of the prior five-year average of 11%.
Winter wheat crop quality dropped a point this past week, with 48% now rated in good-to-excellent condition.
Harvest pace has reached 30%, up from 17% a week ago and still well behind the prior five-year average of 40%.
Spring wheat crop quality tumbled seven points lower, with just 20% now rated in good-to-excellent condition.
Analysts thought USDA would dock quality two points in its latest report, out Monday afternoon.
Another 41% is rated fair, with the remaining 39% rated poor or very poor.
Nearly half (48%) is headed, versus the prior five-year average of 39%.
In fact, Minneapolis wheat selling off yesterday proved more about balancing positions and squaring books pre-report than any substantial fundamental change.
Consequentially, the meteorological situation remain still worrying especially in part of the production areas in the Midwest.
The formation of a heat dome, which implies high temperatures over western North America, in fact directly impacts this production area and in particular the spring wheat, corn and soybean crops.
In this context, corn basis bids were steady to mixed, moving as much as 7 cents higher at an Illinois river terminal while sliding as much as 2 cents lower at an Iowa ethanol plant.
While soybean basis bids were mostly steady across the central U.S. but did tilt 2 cents higher at an Ohio elevator and an Illinois river terminal.
From Canada, Statistics Canada estimates that all-wheat planting intentions this year are at 23.4 million acres, a year-over-year decline of 6.5%, if realized.
Durum wheat is 2,77% lower compared year ago.
Canadian farmers are expected to plant more barley and canola this year.
Figures published yesterday, indeed, confirm the sown areas up + 8% in canola in Canada compared to last year to 22.5 million acres, but the growing conditions facing the hot weather are pushing the prices higer.
In this context, Canadian new crop canola to mark new highs in Winnipeg for the November 2021 deadline.
New crop prices are now approaching prices for deliveries closer to the 2020 crop.
From South America Brazil is again at the center of concerns with a drop in temperatures observed in the south of the country, which could further erode the country’s yield potential.
Meantime, Brazil’s Anec predicts the country’s June soybean exports will total 376.6 million bushels, which is slightly below its estimate from a week earlier.
Anec also expects to see Brazilian soymeal exports reach 2.025 million metric tons this month.
On European market, grain prices ended the day on a negative note.
Since the start of the week, in contrast, the oilseeds market has shown a strong growth.
Rapeseed prices, indeed, retraced the recent downward movement supported by the situation in Canadian canola in particular.
Meantime, harvests are starting even if very slowly in France for the first barley as early July approaches.
Its expect a good volume outlook for the 2021 harvest in Europe.
This, should provide a favorable element to the dynamic towards exports after the decline observed in the 2020/2021 campaign.
Indeed, European Union soft wheat exports for 2020/21 reached only 25.38 Mt through June 27.
That’s a year-over-year decline of nearly 27%.
EU barley exports are also down from a year ago, with 7.08 Mt.
The European Commission also reports that 2020/21 EU corn imports reached 565.3 million bushels through Sunday, which is a year-over-year decline of around 27%.
Meantime, even if the arrival of harvests are pressuring grain prices on one side, on the other side, the easing of prices are pushing certain importing countries to reposition themselves in purchasing.
From South Africa, South Africa’s Crop Estimates Committee is anticipating corn production will rise 6% for the 2020/21 season, based largely on favorable weather conditions.
Production is expected to top 639 million bushels.
If realized, that would be South Africa’s second-largest corn harvest on record.
From Black Sea basin, markets are catching some cautious pressure, with an eye on the board going into the report as always, as harvest picks up pace and more sellers come out of the woodwork.
Confidence is also growing in large wheat and barley yield potential across much of the area.
Russian agriculture consultancy IKAR said on Tuesday it had raised its 2021 forecast for wheat production to 83.6 million tonnes from 82 million tonnes.
It also said it sees Russia’s exports of wheat at 39 million tonnes this year.
Russia produced 85.9 million tonnes of wheat in 2020.
The day before yesterday, Romania stood out for the second consecutive time in the framework of the GASC tender, winning all the volumes contracted. Indeed, the GASC has positioned itself for the purchase of 180 Kt of wheat of Romanian origin.
For the occasion, traders operating in Romania were offering an FOB price starting at $ 243 / t.
Thus, the Romanian origin stands out in terms of competitiveness against its Ukrainian and Russian competitors.
There is no doubt that these two origins will be keen to shine on the occasion of the next GASC tenders.
From the Middle Kingdom, China’s state grains stockpiler Sinograin announced today it will sell another 6.1 million bushels of corn that had originally been imported from the United States and Ukraine in two upcoming auctions.
There have been three similar auctions recently as China attempts to quell high prices and tight domestic supplies.
From Australia, yesterday new crop markets picked up A$2-3/t after the board moves, although liquidity remains thin overall.
Canola jumping up some $20/t with the excitement there.
Old crop markets seeing a little support from domestic consumptive coverage for the early spring, but again a question of volume/liquidity.
BOM maps still looking good for southern Qld, although the latest runs have shifted slightly and pulled back for some in northern NSW later this week.
On international trade scenario, this is a hot day for grain traders.
Thailand issued an international tender to purchase 7.3 million bushels of animal feed wheat from optional origins that closes on this morning.
The grain is sought for five separate consignments that are for shipment between August and December.
Tunisia issued an international tender to purchase 3.7 million bushels of soft wheat and 4.6 million bushels of animal feed barley from optional origins that closes this morning. The grain is for shipment between mid-July and late August.
Iran issued an international tender to purchase 2.2 million bushels of milling wheat from optional origins with a deadline of today.
The grain is for shipment in August and September.
Iran issued also an international tender to purchase 2.4 million bushels of corn from optional origins that closes this morning.
The grain is for shipment in August and September.
Finally, Iran issued also an international tender to purchase 60,000 metric tons of soymeal from optional origins that closes today.
The grain is for shipment in August and September.
