US farm markets were mixed but mostly lower yesterday.
Corn and wheat saw moderate cuts.
The soybean complex, in contrast, was the lone bright spot, with nearby soybean, soymeal and soyoil contracts all trended higher.
On macro markets, oil prices are rosing this morning, edging up from a three-week low comapred the previous session, as U.S. crude, gasoline, and other product inventories are likely to have dropped last week, with gasoline stocks forecast to fall for a fourth consecutive period.
However gains are likely to be limited on worries that rising COVID-19 cases and restrictions in China will dent fuel demand.
So, Brent crude was up just by 29 cents, or 0.4%, at $69.33 a barrel by 03:59 GMT, after falling 2.3% on Monday.
U.S. oil was up by 46 cents, or 0.7%, at $66.94 a barrel, having fallen by 2.6% in the previous session.
On the financial side, the U.S. Senate came closer to passing a $1 trillion infrastructure package, though it still has to go through the House.
Meantime Federal Reserve officials said that while the labour market still has room for improvement, inflation is already at a level that could satisfy one leg of a key test for the beginning of interest rate hikes.
Consequently, U.S. stock indexes were mostly soft, with the Dow Jones Industrial Average down 0.3%, the S&P 500 off 0.09% while the Nasdaq Composite added 0.16%.
MSCI’s gauge of stocks across the globe were 0.03% lower.
Asian stocks, on their part, started off on a weak footing this morning after the largely soft performance on Wall Street.
So, MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.4% in early trading, with Korea’s KOSPI index down 0.56% while China’s blue chip index CSI300 shed 0.33%.
Japan’s Nikkei was UP 0.9% while Australia’s benchmark S&P/ASX200 was 0.2% higher on the back of strong earnings results.
The U.S. Dollar firmed slightly.
Coming back on grains market, Corn Belt weather maps are still adding moisture for later this month (beneficial to some bean areas) with the latest model runs pushing a widespread 1-2″+ across the Corn Belt for late August.
Meantime, regular US crop progress figures had winter wheat harvest up to 95pc completed, mostly remaining only in Idaho and Montana.
Spring wheat progress was reported 38pc complete, up 21% week on week, as hot/dry weather leads to fast fieldwork.
Crop ratings show a slight increase in spring wheat to 11% judged as good to excellent, compared to 10% last week.
However, this remains very low.
Corn conditions were pegged up 2pc to 64pc good-to-excellent, a slightly unusual jump for this point in the year.
Beans conditions were unchanged 60pc good-to-excellent.
Milo/sorghum was rated 1pc better, at 63pc.
Survey estimates for this week’s WASDE reports are generally in the ~177-178 range for corn yield, ~50.5 range for bean yields.
Both are slightly below USDA July figures.
Wheat production estimates are also slightly lower for spring wheat, ideas averaging ~20 mbu lower, with various estimates sub-300 mbu on HRS.
The next WASDE report will be published on Thursday.
Meantime, US corn export inspections only saw about half of the prior week’s total, tumbling to 667.220 t.
That was below the entire range of analyst estimates.
Mexico was the No. 1 destination.
Soybean export inspections were also lackluster, gathering just 114.253 t and falling 38% below the prior week’s.
It was also on the low end of trade estimates.
Wheat export inspections exceeded expectations last week, jumping to 605.793 t.
That was better than the entire range of trade guesses.
Japan was the No. 1 destination.
Yesterday, another US export sales flash had two boats of new crop beans to unknown destination, many are assuming China.
In this context, corn basis bids plummeted 25 cents at an Iowa processor and eased 2 cents lower at an Iowa ethanol plant while holding steady elsewhere across the central U.S..
Soybean basis bids fell 5 cents lower at an Indiana processor while holding steady elsewhere across the central U.S..
Farmer sales are likely to be relatively sluggish again this week.
From South america, Brazilian oilseed association Abiove projects that the country’s 2021 soybean exports will rise 4.6% higher year-over-year, to 3.816 billion bushels.
Abiove also offered one of the more bullish 2021 soybean production estimates, with 5.052 billion bushels.
And the group noted Brazilian soymeal exports in July were a record for the month, at 2.0 million metric tons.
On the other hand, Brazil’s AgRural consultancy reported that just 58% of the country’s second corn crop has been harvested, which is up from 49% a week ago but well behind 2020’s pace of 70%.
Total corn production is projected at 90 million tonnes, which is nearly 20% below last year’s tally, if realized.
Brazil has struggled with plenty of drought and other weather-related problems this season.
On European market, we have seen a relatively quiet session yesterday.
Operators expecting more visibility on the quality of wheat remaining to be harvested and an estimated quantity in France around 13 million tons.
In wheat, the resistance of €230/t on Euronext is still preventing a continuation of the rise for the time being.
Feed barley prices change little in the wake of wheat while firmness remains de rigueur on spring malting barley in a tense market context linked to the climate situation.
The long-awaited return of the anticyclone should be effective in France tomorrow and remain relevant for the next few days.
In this context, the first sowing of rapeseed should begin next week.
From the Black Sea basin, wheat prices are still rising despite a marked pause in other international markets.
About corn, activity is more reduced, as operators expect more visibility on the balance sheets that USDA will post after tomorrow.
In Russia, wheat exports are accelerating with 1.1 million tons loaded over the period 30 July / 5 August against 700,000 t over the previous week.
In July, inflation in Ukraine reached 10.2%, the highest level in 3 years.
From the Middle East, Iraq announced last night that they intend to import more wheat in 2021/2022 season to offset lower domestic production this year.
From the Middle Kingdom, increased travel restrictions in China (they announced a plan yesterday to regulate domestic travel based on case status) are spooking global macro markets as questions about the economic impact do the rounds.
So far the restrictions have not had a substantial impact, but with the imposition just starting and an unknown duration markets are worried.
From Australia, local markets firmed again yesterday to start the week on a positive note.
Wheat lifted A$5/t in places for new crop and $2-3/t for spot old crop.
Barley continued to firm too, as markets saw an increase in new crop bids.
Canola markets continued to print new contract highs for the new crop with bids firm across the port zone.
On the international scene, as we said there has been a new sale of 104 000 t of soya by the USA to undeclared destinations.
We wish you a good day.
