A big selloff yesterday in stocks, energy futures and other commodities pushed soybeans more than 1.5% lower, while corn prices remained mostly stable.
Wheat contracts, meantime, grabbed moderate gains as near and mid-range weather forecasts suggest a very dry weather on the central U.S. in the next days.
On macromarkets, oil prices stabilised this morning after slumping around 7% in yesterday’s session amid a broader market retreat led by concerns about a resurgence of COVID-19 infections, which came just as producers inked a new supply deal.
So, Brent crude gained 38 cents, or 0.6%, to $69.00 a barrel by 00.58 GMT.
The U.S. crude contract for August delivery, which expires later this morning, was up 49 cents, or 0.7%, at $66.91 a barrel.
U.S. crude for September delivery was up around 1% at $66.99 a barrel.
The selloff, which pushed prices to their lowest in two months, was largely due to concerns centered on the Delta variant and macro backdrop rather than a significant re-think of forward looking oil fundamentals.
Stocks on Wall Street fell as much as 2% on Monday, with the Dow posting its worst day in nine months as COVID-19 deaths increased in the United States.
Also Asian stocks were down this morning as growing fears the spreading Delta variant of the coronavirus would harm the global economic recovery sent riskier assets skidding sharply.
Indeed, MSCI’s gauge of Asia Pacific stocks outside Japan fell as much as 0.29%, with Australia’s S&P/ASX 200 down 0.39%.
Japan’s Nikkei 225 hit a six-month low in early trade and widened the losses to 1.05%.
The Hang Seng Index opened 0.3% lower and China’s benchmark CSI300 Index slid 0.7% at the start.
Coming back on grains market, US Corn Belt weather maps are turning warmer and drier through the end of the month, with above-average temperature anomalies starting to move east.
Western areas are still looking for more rain which the maps are not showing.
Meantime, US crop conditions reports had corn rated 65 per cent (pc) good-to-excellent, unchanged, beans 60pc, (+1pc), and spring wheat at 11pc (minus 5pc from week prior).
Winter wheat harvest progress was 73pc and the kicked the can down the road until next week for spring wheat harvest.
These figures thus confirm the consequences of the dry conditions of the past weeks, clearly contrasting with the situation of last year.
Consequentially, U.S. wheat futures rose more than 1% this morning pushing prices towards a two-month high, on global supply concerns.
Corn rose 1% on concerns over hot and dry weather in the United States, while soybeans also climbed 1%.
In fact, the most-active wheat futures on the Chicago Board Of Trade were up 1.3% at $7.06-1/2 a bushel by 05.04 GMT, having closed up 0.8% on Monday – when prices hit a May 18 high of $7.09-1/2 a bushel.
On the other hand, corn export inspections eased slightly to 1.000.512 t for the week ending July 15.
Soybean export inspections saw moderate declines this past week, dropping to 143.934 t.
Wheat export inspections improved 15% from the prior week to reach 490.626 t.
From South America, more frosts reported in parts of Brazil last night, with some analysts there calling for further losses on later maturing fields.
Brazil’s embattled second corn crop season is finally drawing to a close, with AgRural reporting harvest progress at 30% through July 15.
That’s still well below last year’s pace of 43% due to later-than-normal plantings this season.
Due to widespread drought, Brazil’s second corn crop production is expected to tumble 21% lower year-over-year to 2.327 billion bushels.
Argentine soyoil exports will likely rise, driving down prices internationally, due to a new law cutting the amount of soyoil-based biodiesel blended into common diesel fuel sold domestically.
On European market harvest condition’s are finally favorable.
Nevertheless, the situation in France and in certain regions of Europe is however very heterogeneous after the recent rains.
However, the return of drier weather thus made it possible to see the cutting progress, particularly in barley and in the first areas, the harvests of soft wheat.
The harvest pressure have seen prices stall at the beginning of the week.
In oilseeds, in the wake of the decline in soybean and oil prices, November’s maturity rapeseed fell by -14.50 € / t yesterday to reach 528.75 € / t.
From Black Sea basin, Ukraine’s wheat exports so far in July have totaled 10.7 million bushels, according to the latest data from the country’s agriculture ministry.
In add, Ukraine has exported 19.6 million bushels of corn during the first half of July, per the latest data from the country’s agriculture ministry.
However, total grain exports for the 2021/22 marketing year, which began July 1, are down around 10% from a year ago.
Total grain harvested in 2021 is expected to surpass last year’s volume by around 17%.
On the other hand, as drought gains ground in Kazakhstan and threatens cereal production potential, authorities plan to restrict exports of major cereal crops from August 15.
Also, exports of animal feed including cake and hay will be prohibited.
During the past season Kazakhstan exported 8 Mt of wheat and 1 Mt of barley according to the USDA.
The US Department of Agriculture forecast exports for the beginning of the season, at 7.5 Mt and 1.3 Mt respectively.
These figures will naturally be revised downwards.
From the Middle Kingdom, China reporting a new case of ASF in Sichuan province, reportedly from inter-province moves, breaking quarantine rules.
From Australia, local bids on both old and new crop boards had a firm start yesterday.
Some grades were bid up A$5-6/t.
Canola is pushing over $800/t site for some parts of the east coast already with the board rally.
On the other hand, East Coast barley prices came under pressure as farmer selling picked up into a market as buyers eye-off another thumping harvest.
An abundance of natural pastures and the absence of export buying from China have significantly eroded demand for Australian barley in recent years.
The situation was further complicated in the south.
An absence of export demand from China left Victorian farmers looking for new overseas buyers to absorb excess supplies from last year’s bumper crop.
In this context, old crop barley prices fell $5 to $295 delivered into the Daring Downs last week.
Weather maps are holding steady, with the rains still forecast for WA and a fairly widespread forecast later for southern NSW and Victoria.
Internationally, the Philippines purchased 1.8 million bushels of animal feed wheat, sourced from the Black Sea region, in a tender that closed late last week.
The grain is for shipment in September.
Bangladesh wheat tender’s line up for 50.000 t, have seen the following offers:
- Soubhik export $335;
- Bagadia bross $ 359.9;
- Agrocorp $ 362.29.
We wish you a good day.