Corn and winter wheat closed with small losses Thursday, while, soybean prices closed with modest gains.
On veg oils, the context is still buoyant.
However, that hardly told the story of what happened yesterday.
Soybean prices moved more than 25 cents higher early in the session but cooled after that as traders attempt to balance a massive incoming South American harvest with vanishing domestic supplies, which are already historically low.
Brazilian consultancy Datagro, indeed, is offering one of the most bullish 2020/21 production estimates yet, forecasting a total haul of 4.985 billion bushels this season.
Recent rains have set the stage for a “full and record harvest” according to Datagro’s grain coordinator, although those rains are also creating harvest delays.
Spring wheat contracts also trended slightly higher, while corn and winter wheat contracts saw small cuts due some technical selling.
Federal Reserve chair Norman Powell admitted the economic reopening may “create some upward pressure on prices,” and that stoked investors’ fears about inflation more again.
About this question, according to FAO, world staple food prices rose again in February, for the ninth consecutive month, mainly driven by increases in oils and sugar.
TheFAO food price index , which tracks monthly changes in the international prices of the most commonly traded food products (sugar, oils, grains, dairy products, meat) averaged 116 points in February, up 2.4% compared to January.
Over one year, the increase is 26.5%.
This is the highest level since July 2014, according to the United Nations agency responsible for agriculture and food.
The rise in US long-term interest rates is causing concern among fund managers and is boosting the green back.
Energy prices continued to move higher, with crude oil surging 4% also amid an OPEC agreement that keep production cuts in place, deciding not to increase its production from April.
Diesel climbed 3% higher, and gasoline up around 2%.
Regular export sales figures disappointed pretty much across the board.
US wheat export sales were at 220,000t.
In corn, export sales amounted to 116,000t, well under traders’ anticipations.
This is the second week in a row that export figures are disappointing.
Cumulative totals for the 2020/21 marketing year are still nearly doubling last year’s pace, however.
For the soybean, export sales were at 334,000t.
While a net reduction of 52,000t there was on sorghum.
Overall Chinese sales figures were up for corn by over 1Mt, but all on the back of switches from the large “unknown” sales, so it is not new business.
In this context, most American contracts faced moderate losses, with corn prices sputtered late in the session on some technical selling and profit-taking to close modestly lower, although prices were trending slightly higher overnight and this morning.
Soybean prices held onto modest gains, but had moved nearly 30 cents higher earlier in today’s session before significantly cooling off.
Traders are continuing to monitor diminishing supplies in the U.S. and a potentially record-breaking crop slowly materializing in Brazil as harvest continues.
Wheat prices were unable to find any forward momentum after a round of technical selling.
Consequently, now markets are looking forward to Tuesday’s March World Agricultural Supply and Demand Estimates report, with surveyed expectations pencilling in cuts to corn ending stocks on the back of the high export sales overall, even with yesterday’s low figures.
Published survey figures had guesses for corn at around 1.47 billion bushels versus 1.5Bbu in Feb, soybeans nearly unchanged at 117 million bushels, and wheat at 840Mbu, nominally higher than February.
On European markets grains remained mixed yesterday due to a lacklustre international demand and the better forecast next harvest mainly on Black Sea area.
According to deputy economy minister Taras Vysotskiy, indeed, ukrainian farmers could produce in 2021, wheat for 29.5 Mt (25.1 in 2020), barley for 9.2 Mt (7.8) and rapeseed for 2.6 Mt (2.6).
Total grain exports could rise as much as 17% for the 2020/21 marketing year.
In add, a mild winter so far in Russia has improved winter wheat quality ratings for the world’s No. 1 wheat exporter, according to weather forecaster Hydrometcentre.
Plantings are also up 6% this year, with 47.691 million acres.
On the contrary, rapeseed prices continue to rally and the market does not look ready yet to mark a pause.
On the international stage, Algeria bought around 200 000 t of durum wheat.
Tender results were reported about US$370s range.
Origins are optional but should be sourced from the American continent.
Egypt purchased 60,000 metric tons of soyoil in an international tender that closed earlier yesterday.
A South Korean feedmill group purchased 2.7 million bushels of corn, sourced from either South America or South Africa, in an international tender that closed earlier yesterday.
The grain is for arrival by the end of July.
Taiwan purchased 3.7 million bushels of wheat from the United States in an international tender that closed earlier yesterday.
The grain is for shipment in April and May.
Saudi Arabia’s SAGO came back to the barley markets last night, is seeking 540 000 t of feed barley.
The tender is for nine cargoes boats for last-half April and also May windows.
Consequently, barley markets kicked up late yesterday.
The question is at what price it will trade, and how much remaining Black Sea barley works its way out with the Russian tax situation.
Tonight we will comment, how will close the sessions.