US farm markets bounce back for the most part yesterday.
Soybean prices moved nearly 1% higher.
Some wheat contracts were more than 2% higher.
Corn, in contrast, failed to follow suit finishing the session with fractional losses.
On macro markets, oil prices this morning are consolidating the yesterday’s strong gains as a bullish outlook for U.S. fuel demand outweighed concerns about mobility curbs in Asia.
Indeed, industry data showed U.S. crude oil and gasoline inventories fell last week, while the U.S. Energy Information Administration raised its forecast for fuel demand in 2021 and said consumption in May through July was higher than expected.
Consequently Brent crude futures inched up 3 cents to $70.66 a barrel at 01:36 GMT, following a 2.3% Tuesday’s gain.
U.S. West Texas Intermediate (WTI) crude futures rose 6 cents, or 0.1%, to $68.35 a barrel, adding to a 2.7% jump on Tuesday.
Weekly figures from the EIA are due on this morning.
On the financial side, the Dow and S&P 500 closed at record highs as economically sensitive value stocks gained with the U.S. Senate’s passage of a $1 trillion bipartisan infrastructure package, which now passes to the House of Representatives.
Meanwhile Asian shares traded sideways on fears about the spread of the coronavirus despite the record close on Wall Street.
So, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.08% in Asian trading, with Chinese bluechips down 0.38% Korea’s KOSPI down 0.37%.
Japan’s Nikkei gained 0.57%.
In this context, the dollar index rose to its highest since mid July, gaining against the yen, while the euro neared year-to date lows against the greenback.
Coming back on grains market, Corn belt weather maps in the US remain fairly widespread wet and markets are focusing on the tropical storm/potential hurricane moving towards the US Gulf.
There are thoughts it may bring higher storm figures across southern areas and a few potential harvest delays further south.
Meantime, another US export sales flash saw two boats of soybeans booked to China, two boats of soybeans to unknown and 183,000t of corn to Mexico, including 30,500t sold for season 2022/23.
Despite this new sales reported to Mexico, corn prices have changed little yesterday, after the reassuring figures on the evolution of the state of crops, figures which are moreover surprising in some states which are however well impacted by the conditions. dry.
Indeed, for the new harvest, prices are still within a narrow range.
The rise in prices observed in soybeans was maily due to new exceptional export sales were announced yesterday to China (132,000 t) for the 2021/2022 season.
Consequentially, new harvest soybean prices are thus approaching a first zone of resistance as they approach the level of $ 13.50 / b for the November 2021 deadline.
SRW wheat prices, on the other hand, for the December 2021 expiry date are now approaching the recent high of this early August, thus testing the resistance zone of $ 7.40 / bbl.
This upward movement, despite the current appreciation of the dollar, is mainly driven by adjustments to purchases in the run-up to the USDA publication on tomorrow morning where a revision of production volumes is expected both in the United States and at other exporting countries.
In this context, corn basis bids fell 19 to 20 cents lower at two interior river terminals yesterday while holding steady across most other Midwestern locations.
Soybean basis bids softened across a handful of Midwestern locations, spilling as much as 38 cents lower at an Illinois river terminal.
Cash domestic durum prices in the US have stepped slightly higher again, after spiking late July, with little improvement to yields of crops harvesting presently.
From South America, Brazil’s Conab again downgraded its projection for the country’s second corn crop production, falling 9.9% from a month ago to 2.375 billion bushels.
Brazil has struggled with widespread drought problems late this season.
Brazilian corn exports for the 2020/21 season are forecasted at 925.2 million bushels.
Meantime, they also slightly raised its prior estimate for the country’s 2020/21 soybean production, which is at a record-breaking 4.996 billion bushels.
However, Conab predicts moderately lower soybean exports versus its July forecast, slipping to 3.065 billion bushels.
Meantime, Brazil’s Anec estimates that the country’s soybean exports in August will rise 24% year-over-year to 223.8 million bushels.
Brazilian corn exports this month are also expected to see a moderate year-over-year increase, reaching 157 million bushels.
On European market, harvesting resumption will make it possible in the days to come to better define production volumes not oly in France and above all to allay current fears about the impact of recent rains on quality.
That will also lead to an increase in short-term availabilities, an important factor in accelerating export activity.
Meantime, per the latest data from the European Commission, European Union corn imports for the 2021/22 marketing year reached 1.231.040 t between July 1 and August 8, .
That’s a year-over-year decline of 21% so far.
Soybean imports for the first five weeks of the 2021/22 marketing year have reached 1.224.689 t, trending moderately lower year-over-year.
EU soymeal imports are also down from a year ago, with 1.21 million metric tons through August 8.
European Union soft wheat exports so far during the 2021/22 marketing year have reached 1.794.857 through August 8, trending slightly lower year-over-year.
EU barley exports are tracking higher from a year ago, with 1.443.344 t.
On the financial side, the euro / dollar parity is back to its lowest level since last March, now moving below 1.1730.
This situation provides significant support to the European market, which is adjusting upwards in an already tense context on agricultural markets.
Breakouts in several technical points yesterday thus prompted an upward acceleration in prices.
Consequentially, wheat prices mark new highs on Euronext for the 2021/2022 season, with the December 2021 deadline now above € 235 / t.
Indeed, it closed the session yesterday at € 237.75 / t.
This rising in wheat prices are benefiting the feed barley market and corn.
However, the premium between wheat and corn on Euronext is widening, as currently market is less tight in terms of feed quality than last year and different volumes for now are available in feed wheat.
Despite everything, the November 2021 deadline is progressing on Euronext, approaching the level of 215 € / t.
Rapeseed also rose yesterday, marking a new high.
From the Black Sea basin, rising in prices for common wheat continues.
Despite everything, current price levels are still attractive compared to other sources, even if the delays in the harvests cause short-term availability to be lower than in years past at the same period.
Producers are in fact always cautious to increase sales.
The logistics positioning also helps to see the repositioning of the interests of importers, which are adapting to the rise in sea freight prices.
This helps wheat prices to rise and also feed barley market, especially in Ukraine.
From the Middle Kingdom, China state stockpiler Sinograin is once again planning to auction off a batch of previously imported corn to boost local supplies and quell high prices.
The upcoming sale is slated for Friday and is comprised of 1.4 million bushels originally imported from Ukraine.
From Australia, weather maps indicate dryness in much of Australia’s crop zone for the rest of this week/early next week.
Extended run models are starting to build out the chances for later in August across both WA and the east coast.
Meantime, according to the latest export data from the Australian Bureau of Statistics (ABS), Austarlia exported 2,820,989 tonnes of wheat and durum in June, up 9.4 per cent from 2,578,529t shipped in May.
The June figure represents a high for the 2020-21 (Oct-Sep) shipping year, and points to the competitiveness of Australian wheat into Asia prior to Northern Hemisphere new-crop hitting the market.
Australia’s biggest bulk market by far in June was Indonesia on 797,293t, followed by Vietnam on 318,722t, The Philippines on 309,540t and China on 229,951t.
Shipments to Indonesia in June showed the biggest single-destination number for the shipping year so far, pipping China in December with 779,511t.
On containerised sales, Vietnam on 48,233t, Malaysia on 36,809t, and Indonesia on 25,232t were the volume destinations.
Italy, has imported so far from January to June 2021 a total of 270.170 t of durum wheat.
That means Italy is the biggest buyer of Australian durum wheat.
The second is Nigeria with 27.500 t of durum wheat imported.
In this context, local markets starting up with a bit of excitement today after the global rally, with cash bids looking to step up again.
Internationally, Morocco issued a tender to purchase 363.000 t of durum wheat, sourced from the United States, under a preferential tariff import quota.
Offers must be submitted by August 24, and the grain is for arrival by the end of December.
South Korea purchased nearly 135.100 t of wheat, sourced from the United States, Canada and Australia, in a tender that closed last Friday.
The grain is for shipment between October and December.
We wish you a good day.
