US grain markets were mixed on Chicago yesterday.
Corn prices traded 1%-1.5% lower.
Soybean prices notched a 2% gain.
Soybean oil prices tracked gains in the soybean complex, moving 0.7%.
Minneapolis wheat prices rose $0.10-$0.14/bushel.
Kansas prices added $0.02-$0.03/bushel.
Chicago wheat futures shed $0.02-$0.05/bushel.
On macro markets, oil prices fell for a third day on this morning amid anxiety that supply may rise after the collapse this week of talks among major producers, potentially causing the current output agreement to be abandoned.
In fact, Brent crude oil futures were down 43 cents, or 0.6%, at $73 a barrel by 01.58 GMT.
U.S. West Texas Intermediate futures were down 51 cents, or 0.7%, at $71.69 a barrel.
Brent prices have fallen about 5.3% since Monday’s close after talks between the Organization of the Petroleum Exporting Countries and its allies, including Russia, known as OPEC+, fell apart when de facto leader Saudi Arabia refused demands from the United Arab Emirates to raise its output under the group’s supply cut agreement.
Prices, however, found some support from a large drop in oil inventories in the United States.
Indeed, oil stockpiles in the world’s biggest oil user fell by 8 million barrels for the week ended July 2, according to two market sources, citing American Petroleum Institute figures, compared with an estimate of a 4 million barrel by some analysts.
The Federal Reserve released minutes from its latest meeting, reiterating its stance on leaving current monetary policy measures in place for the time being as the central bank continues to monitor high inflation rates in the post-pandemic era.
Markets rewarded the news by buying into stock indices, though concerns about labor and materials availability looms large in the back of many policy maker’s and investor’s minds alike.
So on Wall St. the Dow Jones rose 0,3% to 34.681, and S&P 500 futures rose 0.34% to $4,358.
Coming back on grains market, USDA next crop production and WASDE reports will publish on 12 July.
With the USDA’s July WASDE reports coming this next week, surveyed ideas for corn yields are largely in the 178 bu/acre range, versus USDA June 179.5, slightly over 50bu/ac for beans, versus 50.8 in June.
Corn carry out stocks were forecast in the low 1 billion bushels range on corn and 125-150 mbu range on beans.
Meantime, rains over the Midwest helped boost corn crop conditions ahead of pollination.
Rains and moderate temperatures are forecast for the Corn Belt over the next three days, which will likely support crop development and weigh on prices.
In contrast, bargain buyers helped prop up gains in the soy complex while declining crop conditions noted in Crop Progress report continued to raise some supply concerns for the 2021 crop, adding some bullish pressure to as the market closed.
Cash soymeal prices were largely flat across the Heartland.
Export demand at the Gulf drove barge bids on the Mississippi River higher, with underlying concerns about export deals further shrinking domestic soybean supplies also underpinning higher prices.
Kansas and Minny wheat prices on their part, rose as quality concerns about recent rains and persistent dry weather in the Northern Plains created temporary scarcity concerns for traders in the wheat complex.
A stronger dollar, however, capped the day’s gains.
Chicago futures, meantime, fell on a large winter wheat harvest expected in the Northern Hemisphere.
Cash offerings for hard red winter wheat in the Southern Plains were largely unchanged.
Country movement of grain was slow as rain delays hinder harvest progress.
Protein premiums for wheat containing 13%-14% protein increased while cash offerings for lower grades held steady.
Hard red winter wheat harvest has largely wrapped up in Texas and Oklahoma.
Top wheat producer Kansas continues to lag behind historical averages amid wet harvest weather.
From South America, Brazil’s grain output is likely to grow by 27% over the next decade, according to projections released by the Brazilian government.
The report citing expanding acreage and growing international demand as prompting a production rise to 333 million tonnes by 2031.
The government report expects Brazilian corn, soybean, and cotton acreage to register just over 200 million acres in 2030/31, increasing by over 30 million acres in the next decade.
Brazilian oilseed lobbying group Abiove expects next year’s soybean crop will add nearly 3.2 billion bushels of soybeans to Brazil’s export total.
USDA projections for the 2021/22 Brazilian crop are more optimistic than those of Abiove.
In the latest WASDE report, USDA predicted Brazil will harvest 5.3 million bushels of soybeans next year, sending 3.4 billion bushels into international shipping channels.
Brazil is the world’s largest soybean exporter.
Abiove also expects domestic soy crushing could fall by 29 million bushels if the Brazilian government ceases blending 13% of biodiesel into diesel stocks this fall.
During the pandemic, the Brazilian government required blending rates to shrink to 10% in response to falling fuel demand.
But if blending rates remain at 10% and do not return to 13%, the decreased domestic usage rates could cut into soybean prices, disincentivizing Brazilian growers to plant more soybeans.
Another port workers protest in Argentina has halted grain flows out of the Rosario port, Argentina’s largest grain shipping facility.
Construction workers at Rosario set up road blockades last night and this morning to protest low wages paid by agribusinesses and agro-exporting companies which contract out construction work on the port’s shipping facilities.
All truck traffic slowed to a halt, causing massive road congestion leading into and out of Rosario.
The strike helped prop up soybean and soymeal futures prices on the Chicago Board of Trade, as international buyers turned to the U.S. for supplies.
Argentina is the world’s largest exporter of soymeal.
The Buenos Aires Grain Exchange, meantime, forecast Argentina’s soybean crop at 43.5 million tonnes.
On European market, degradation of North American crops is supporting wheat and oilseed prices, despite harvest pressure in Europe.
Plentiful rains across the European Union over the past few weeks boosted crop conditions, sending prices lower.
But as harvest nears and quality issues due to wetter weather mount, the complex likely put in a floor after yesterday’s trading session.
Rapeseed has also gained momentum in the wake of poor Canadian canola after weeks of drought and heatwaves.
The resurgence of the palm in Southeast Asia is also providing some support to the trend.
Barley harvesting sites are struggling to progress in France, in a context of rains or showers disrupting the harvest.
However, the first echoes of returns are generally satisfactory.
According to the producers’ association in Germany, the 2021 winter wheat production could reach 22.82 million tonnes, up + 5% compared to last year.
Rapeseed production is expected to rise by + 6% to 3.71 million tonnes.
Malting barley production is expected to decline to just 1.75 million tonnes, down 12%.
From Black Sea basin, large harvests are expected, especially in Southern Russia.
Despite variable crop conditions, the 2021/22 Russian wheat crop is likely to be the largest on record and will likely add nearly 1.5 billion bushels in exportable supplies to the global wheat market.
As final estimates trickle in for the 2020/21 wheat marketing year, Russia’s Agriculture Ministry projects annual wheat exports at nearly 1.4 billion bushels over the past year.
Rising global feed production boosted 2020/21 Russian wheat exports to the country’s second highest volume on record, following only 2017/18 export volumes of 1.5 billion bushels.
The estimate is just a hair lower than USDA’s current estimates for old crop Russian wheat exports.
Russia is the world’s largest wheat exporter.
Harvest pressure continues for wheat with a further drop in prices yesterday of $ 6 in CPT Odessa basis.
The weather remains good near the Black Sea coast, which will allow a rapid progression of harvesting sites over the coming days.
This downturn does not spare the new harvest maize, which is exchanged for October delivery in the ports of Odessa now below 220 usd / t against 270-275 usd / t during the peak observed two months ago that.
From the Middle Kingdom, Chinese news reports the government will set up a type of pig production insurance through the next three years to encourage herd rebuilding and to dampen concerns over ASF risks.
From Australia, local new crop markets remained under pressure on the new crop, tracking lower yesterday as the board collapsed.
Wheat was back A$6-8/t and canola back another $20/t or so.
Old crop markets remained much the same as they have been, still plugging through with execution and logistics dominating the focus as the year wraps up.
Extended-run weather maps are starting to forecast a storm event across northern WA.
We will wait to see how it fills out as we move further down the calendar.
Internationally, South Korea and Thailand both issued international tenders for feed wheat overnight, suggesting international demand for cheap wheat in the face of rising corn prices will alter rations around the globe for another growing season, especially if U.S. crops fall short of yield expectations this year.
Jordan bought 60,000 t of feed barley from optional origins.
Algeria’s call for tenders is expected today for soft wheat.
Have a good day.
