US grain prices fought through a choppy session yesterday with mixed results.
Corn prices faded into the red on a round of technical selling due to the better weather forecasts.
Chicago SRW and MGEX spring wheat contracts also finished the session in the red.
Meanwhile, drier weather patterns in the Central Plains kept Kansas City HRW contracts moving higher.
Soybean prices, on their part, fought to capture some modest gains.
On macro markets, oil prices were mixed on this morning and still on track for a weekly loss, despite yesterday’s modest gains, as optimism stemming from a draw in U.S. inventories and uncertainty about global supplies fuelled by an OPEC+ impasse.
Brent crude oil futures were down 3 cents at $74.09 a barrel by 04.42 GMT while U.S. West Texas Intermediate futures CLc1 were up 6 cents, or 0.1%, at $73.00 a barrel.
Prices on both sides of the Atlantic are headed for a weekly loss of nearly 3%.
Investors remain skittish about the global economy.
US jobless claims this past week were also higher than expected.
Analysts said an accumulation of events have triggered a turn in sentiment rather than a single catalyst.
Fears central banks will choke economic recovery by tightening policy in their efforts to rein in inflation, a rapidly spreading Delta variant of the coronavirus around the world and still low rates of vaccination have darkened the outlook.
Also raising concerns for investors were political tensions in the Middle East, Russia and China while Beijing’s crackdown on foreign-listed Chinese firms took its toll too.
As a result, markets are now starting to question one of this year’s most successful trades, the so called reflation narrative.
Consequentially, in equities, the Dow fell 0.7%, the S&P 500 lost 0.86% and the technology-focused Nasdaq dropped 0.7%.
European futures pointed to some stabilisation in the sell-off with Eurostoxx 50 futures and Germany’s Dax Futures up 0.4% and London’s FTSE futures rising 0.3%.
E-Mini futures for the S&P 500 were a shade higher.
Asian shares stumbled to two-month lows on this morning and are set for their worst weekly performance since mid-May.
MSCI’s broadest index of Asia-Pacific shares outside Japan went as deep as 665.19, a level not seen since mid-May.
It pared some of the losses to be last down 0.3% at 672.29.
For the week so far, the index is down 2.6%, the biggest decline since mid-May.
Japan’s Nikkei skidded 0.6%.
Chinese shares were weaker too with the blue-chip CSI300 index off 0.3%.
Australian shares dropped 1.2%, with stay-at-home orders in Sydney, tightened further to stop the spread of the Delta variant of the coronavirus.
Coming back on grains market, traders will be cautious today ahead of the weekend and the next 6 p.m. USDA report on Monday.
Meantime, prices fell yesterday in Chicago in favor of a milder weather during the week, even if the rains are still considered insufficient on the part of the producers.
Regular export sales won’t be out until tonigth.
US weekly ethanol stocks were down 0.4 million barrels to 21.1, with the cut attributed to gasoline demand spiking over the 4 July weekend.
Private exporters announced to USDA the sale of 122,200 metric tons of soymeal for delivery to Mexico during the 2021/22 marketing year, which begins October 1.
In thi context, corn basis bids were mixed at two Midwestern processors – rising 5 cents higher at a Nebraska facility while sliding 5 cents lower at an Iowa location – while holding steady elsewhere across the central U.S..
Soybean basis bids firmed 10 cents higher at a Nebraska processor, while holding steady elsewhere across the central U.S..
From South America, Brazil’s CONAB predicts the corn crop 93.4 million tonnes (Mt), down another 3Mt from their last estimate but still well above many private estimates sub-90Mt.
They also called the bean crop at 135.9Mt, up slightly from previous.
US NOAA Climate Prediction Centre, meantime, has come out with a call for a probable La Niña next year, with the associated potential for poor crops in South America.
According to the Argentinian Stock Exchange, the maize harvest is up to 56% and production remains estimated at 48 million tonnes.
On European market, wheat is struggling to find its way up, unlike rapeseed, which relies on the strength of Canadian canola.
In fact, European prices moved in scattered order.
Wheat in particular hesitated before ending the session on a stable to bearish note under the pressure of the harvests.
Yields remain encouraging both in Europe and Black Sea region.
The return of the sun is allowing construction sites to accelerate rapidly.
Uncertainties regarding qualities remain relevant.
Rapeseed prices jumped into positive territory in the wake of Canadian canola.
The dry and hot climate of recent weeks has in fact significantly reduced production potential across the Atlantic and weather forecasts are now much less encouraging, particularly in Saskatchewan.
In Malaysia, it is the lack of manpower given a resumption of the epidemic linked to the Covid which supports the courses.
Meantime, according to FAO, food prices around the world fell in June for the first time in a year.
Thus the price of cereals at the world level fell by – 2.6% compared to last month but remains posted up by +33.8% over one year.
Ditto in vegetable oils with a drop over one month of – 9.8%.
From Black Sea basin, harvest is still pushing along with more reports of wheat trucks coming in, though most still are in barley mode.
Despite a mixed 2020 Ukrainian cereal and oilseed production, the national statistical service shows a general increase in profitability in crop production compared to the previous year.
The rebound in commodity prices thus made it possible to compensate for the yield losses.
In cereals, corn wins the palm of the most profitable crop (29%) ahead of wheat (23%) and barley (14%).
In oilseeds, the sunflower so popular in the rotation in this spring appears as the crop that has allowed access to the best level of profitability (37%), ahead of soybeans (33%) and rapeseed (23%).
From Australia, Aussie local markets firmed up a couple bucks the other day on wheat bids, about a tenner on canola.
Values are supported a little this morning in general with the weaker $A.
Weekend rains for WA still forecast to bring a widespread inch for the wheat belt.
Internationally, Saudi Arabia issued an international tender to purchase 360,000 t of wheat from optional origins that closes on this morning.
The grain is for arrival in October.
Japan purchased nearly 108,000 t of food-quality wheat from the United States, Canada and Australia in a regular tender that closed yesterday.
Of the total, 53% was sourced from the U.S. The grain is for shipment in September.
Pakistan is buying around 500,000 t of wheat.
The Philippines issued a tender to purchase 7.3 million bushels of milling and animal feed wheat from optional origins that closed yesterday.
The grain is for shipment starting in September.
Have a good day.
