Good morning Farmer Family …
US farm markets lifted higher yesterday.
Corn prices firmed 1.39%.
Soybeans moved 0.75% higher.
Meal was up 1.53%.
Bean oil closed 2.85% higher.
The wheat complex extended its weekly gains, as Chicago SRW settled 1.38% higher, Kansas City HRW contract was up 1.89%, and Minneapolis spring wheat prices were 1.71% higher on the day.
Today in the afternoon, USDA will releases the August World Agricultural Supply and Demand Estimates (WASDE) report, and operators are anxious to see how bullish or bearish those numbers turn out to be.
Particularly, the government is expected to trim its outlook for U.S. corn production although the proportion of US corn area experiencing moderate to intense drought fell from 31pc last week to 28pc this week.
Soybean growing areas experiencing drought fell from 28pc to 24pc.
As for wheat, the condition rating for the North Dakota spring wheat crop slipped slightly this past week, primarily due to expanding dryness across the state.
Current condition ratings have 74 percent of the spring wheat crop rated good to excellent, down from 80 percent the previous week, but still above five-year average levels, and well above 2021 crop ratings.
Most of the shift was down into the fair condition rating, with only a 1 percent increase in the poor to very poor.
As of August 8, NASS was reporting no harvest of the ND spring wheat crop, although harvest has begun across southern portions of the state as the week is progressing.
It is too early to get a solid assessment of yields and quality but hopefully there will be more information for next week’s update.
The recent pattern of drier and warmer conditions has been favorable for harvest and advancing crop maturity.
Approximately 14% of the crop was rated as mature on August 8, well behind the more normal level of 45 percent.
Nearly two-thirds of the crop has begun to turn color, compared to the more typical level of 90 percent for this date.
Harvest is more advanced in surrounding states with South Dakota estimated at 54% complete, Montana at 22%and Minnesota at 2 percent.
The U.S. northern durum crop had a slight decline in overall condition ratings in both Montana and North Dakota for the week ending August 7.
North Dakota’s crop is rated 77% good to excellent, and 1% poor to very poor, down from 84% good to excellent and 1% poor to very poor the previous week.
In Montana, the durum crop is rated 43% good and 5% poor to very poor, down from 51% good and 6% poor to very poor the previous week.
Due to hot and dry conditions, and earlier planting dates, harvest has already begun in Montana, with 9% harvested, near the five-year average of 11 percent.
An additional 74% of the crop is turning color.
In North Dakota, no harvest has been reported yet.
Nineteen percent of the crop is rated as mature, well behind the five-year average of 35 percent, and 60% of the crop was turning color.
However, forecasted scattered precipitation will slow progress in some areas of the states the balance of the week.
Also, parts of the U.S. Midwest, received rain in recent days and, even if heat in the western regions of the farm belt is expected to continue stressing crops, including soybeans going through a key growth phase, it’s by see how much the government will lower those numbers.
Meantime, during this week, US prices were also supported by a renoved export demand, and by a weaker U.S. dollar that lent an additional support to dollar-priced commodities.
The weekly Export Sales report from FAS, indeed, showed old corn crop bookings in the range of analysts’ expectations at 191,813 MT.
That was also a 7-week high.
Mexico was the top buyer of 134,100 MT.
New crop sales in the week that ended on 8/4 were tallied at 191,340 MT, on the low end of estimates.
The top buyer was Italy at 105,000 MT, which was previously announced via the daily system.
Corn export shipments, however, with 705,400 MT were down 31 percent from the previous week and 28 percent from the prior 4-week average.
As for soybeans, the report indicated a total of 66,710 MT in net reductions of old crop soybean sales.
That is the 6 time in the last 7 weeks a net reduction has been reported, as Unknown had 569,200 MT in reductions (switched to a destination) and China cancelled 66,400 MT.
However, new crop sales totaled 477,241 MT, were up 16.2% vs. last week, and soybean export shipments with 894,500 MT, were up 70 percent from the previous week and 92 percent from the prior 4-week average. .
Meal sales were tallied at 402,061 MT in combined sales, with most of that for 22/23 delivery.
Bean oil bookings were just 642 MT.
As for wheat, the report tallied wheat export bookings in the week ending August 4th at 359,165 MT.
That was in the middle of the range of estimates and up 44 percent from the previous week, but down 34 percent from the prior 4-week average.
Mexico purchased 99,400 MT in that week, with South Korea buying 62,000 MT.
Meantime, with 615,300 MT, wheat export shipments carved out a new marketing-year high.
Separately, USDA yesterday reported a total of 103,400 MT of soybean meal sold to Mexico via their daily reporting system.
In this context, yesterday commodity funds were net buyers of CBOT corn, wheat, soybean, soymeal and soyoil futures contracts.
Corn basis bids were steady to soft after eroding 3 to 15 cents lower across seven Midwestern locations.
Soybean basis bids were steady across the central U.S., with a couple of notable exceptions after climbing 30 cents higher at an Indiana processor and dropping 7 cents lower at an Ohio elevator.
On this morning, Chicago wheat prices snapped a four-session winning streak, with the market dropping from a two-week high.
Corn and soybeans also edged lower.
Particularly, Chicago wheat price was down 1% at $8.02-3/4 a bushel, as of 02:17 GMT.
Corn lost 0.3% to $6.26 a bushel and soybeans gave up 0.4% to $14.43 a bushel.
For the week, all three markets should set for a positive finish nevertheless, although we didn’t must forget that August WASDE report is a report that has fueled very volatile market moves in the past.
Over the last decade, indeed, the most-active corn and soybean futures have moved sharply just on USDA report days that coincided with the August reports.
In energy markets, oil prices inched higher on Friday, after rallied around 2.5% in the previus session.
Both benchmark contracts are headed for a weekly climb, as recession fears eased.
Brent crude futures, indeed, rose 23 cents, or 0.2%, to $99.83 a barrel at 07:36 GMT, while U.S. West Texas Intermediate (WTI) crude futures climbed 3 cents to $94.37 a barrel.
Brent was on track to climb more than 3% for the week, recouping part of last week’s 14% tumble, its biggest weekly decline since April 2020.
Uncertainty, however, capped price gains as the market absorbed contrasting demand views from the OPEC and the IEA.
On Thursday, indeed, OPEC cut its forecast for growth in world oil demand in 2022 by 260,000 barrels per day (bpd).
It now expects demand to rise by 3.1 million bpd this year.
That contradicts the view from the IEA, however, which raised its forecast for demand growth to 2.1 million bpd, due to gas-to-oil switching in power generation as a result of soaring gas prices.
At the same time, the IEA raised its outlook for Russian oil supply by 500,000 bpd for the second half of 2022, but said OPEC would struggle to boost production.
In freigth market, the Baltic Exchange’s main sea freight index slipped to a six-month trough on Thursday pressured by losses across vessel segments, with capesizes snapping a three-day winning streak.
The overall index, indeed, fell 36 points, or 2.3%, to 1,556 points, its lowest since Feb. 8.
Particularly, the capesize index lost 84 points, or 5.2%, to 1,538 points on its worst day in a week.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down $698 at $12,757.
The panamax index was down for the 13th straight session, shedding five points, or 0.3%, at 1,927 points, its lowest in over three weeks.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $46 to $17,339.
The supramax index extended losses, falling 23 points to 1,591 points, its lowest since Feb. 3.
In equity markets, US stocks started out Thursday morning on a strong note due to the weaker-than-expected PPI report, which added to Wednesday’s CPI report in suggesting that U.S. inflation might have already peaked.
Thursday’s July final-demand PPI report of -0.5 m/m and +9.8% y/y, indeed, was weaker than market expectations of +0.2% m/m and +10.4% y/y.
On a year-on-year basis, the July PPI report of +9.8% y/y was down by -1.5 points from June’s +11.3% y/y and was -1.8 points below March’s peak of +11.6% y/y.
The July core PPI report of +0.2% m/m and +7.6% y/y was also weaker than market expectations of +0.4% m/m and +7.7% y/y.
However, the stock market then faded during the day as the inflation optimism ran its course and the 10-year T-note yield rose to a large daily gain of +10 bp.
Particularly, the 10-year yield rose to 2.89% from 2.79% late Wednesday, a big move.
It’s still below the two-year yield, which sits at 3.21%.
That’s a relatively unusual occurrence that some investors see as a fairly reliable signal of a pending recession, though the gap between the two has narrowed somewhat.
Also, initial unemployment claims rose to a 9-month high, raising some doubts about the U.S. labor market.
Thursday’s initial unemployment claims report, indeed, in the week ended Aug 6 rose by +14,000 to 262,000, even if was a slightly stronger than expectations for a rise to 265,000.
In this context, on Wall Street, the S&P 500 closed 0.1% lower at 4,207.27, but was still on pace for a fourth consecutive weekly gain.
The Nasdaq gave up 0.6% to 12,779.91, and the Dow rose 0.1% to 33,336.67.
The Russell 2000 index of smaller companies rose 0.3%, to 1,975.26.
The three indexes are also on pace for a weekly gain.
Meantime, shares were mixed Friday in Asia after the muddled day on Wall Street.
Particularly, in Tokyo, the Nikkei 225 added 2.6% or 727.65 points to 28,546.98.
Seoul’s Kospi edged 0.2% higher to 2,527.94 and the Hang Seng in Hong Kong picked up 0.4% to 20,175.62.
Sydney’s S&P/ASX 200 shed 0.5% to 7,032.50 while the Shanghai Composite index slipped 0.2% to 3,276.65.
Shares fell in India but rose in Taiwan.
In currency trading, the U.S. dollar rose to 133.26 Japanese yen from 133.03 yen.
The euro fell to $1.0319 from $1.0322.
From Canada, the past week saw very sporadic weather systems move through Saskatchewan with some regions having hot dry days while others experienced cool rainy days that have further delayed crop development.
Producers in the latter areas would like to see some hot dry weather to help crops mature and allow for harvest to begin.
Most of the province has not started harvest operations; overall progress has reached one per cent as producers in the southwest and west central regions get their harvesting operations in full swing.
This is slightly behind the five-year average (2017-2021) of two per cent.
Most of the southern half of the province did not get much rain over the past week, with most rainfall reports being between trace amounts and 10 mm; the Weyburn area, however, received 25 mm.
Further north, the Rosthern and Hague areas received 35 mm, while in the west, Macklin area producers received up to 61 mm over the course of an evening.
Prince Albert also received some localized and very heavy rainfall, with some producers reporting 71 mm over two days.
The rain will be beneficial to pasture land and flowering crops, but producers would like to see warmer weather in the forecast to speed up crop development.
The declining trend in topsoil moisture continues as rains overall have been quite minor and infrequent during the past few weeks.
Cropland topsoil moisture is currently rated as three per cent surplus, 58 per cent adequate, 24 per cent short and 15 per cent very short.
Hay and pasture land topsoil moisture is rated as two per cent surplus, 56 per cent adequate, 22 per cent short and 20 per cent very short.
The majority of crop damage this week was due to wind, heavy rains, hail, drought stress, heat, wildlife and grasshoppers.
Some parts of the northwest reported a light ground frost over the past week—no crop damage was reported but producers are conscious of what an early season frost would do to their crop.
Farmers are busy wrapping up haying, getting ready for harvest, desiccating and swathing crops and combining in some areas.
In Manitoba, spring cereal crop flowering is complete, and kernel development is reaching soft to hard dough in most locations.
The spring wheat crop is rated mostly good to excellent, with some exceptions due to extreme moisture.
Barley crops range milky to soft dough stages, with malt crops most advanced, and greenfeed or very lateseeded fields further behind.
Oat crops are reaching hard dough in the most advanced fields, head glumes are starting to turn colour.
Oat-birdcherry and English grain aphids are noticeable in a number of oat fields, mostly found on the undersides of the flag leaf.
Populations are being monitored, and some spraying has occurred where thresholds (12-15 aphids/stem prior to soft dough) are reached.
High levels of beneficial insect parasitism of aphids has been observed in many crops this year.
Fall rye is rapidly turning colour, with a limited start to harvest near Morden and Manitou.
Many fields are being swathed this week in the Central and Southwest regions.
Winter wheat has reached physiological maturity.
Pre-harvest aid application is underway or complete, and harvest has started in the Eastern region.
Corn development ranges from R2 (blister stage) to R3 (milk stage).
Rapid dry matter accumulation is beginning, and nutrient demand will be highest in the next 30 to 40 days.
Silks are generally dry and dropping off in most fields, seed set evaluation is ongoing.
Canola crops are variable across Manitoba, with some in excellent condition and others in poor condition with thin stands.
Flowering ranges from the mid-bloom to fully podded (BBCH 65 to 78).
Early crops have podded up well, with limited heat blast and flower abortion this year, and producers are watching crop development closely.
Flax crops are nearly done flowering, boll development looks good and disease issues are limited.
Flowering appeared to be somewhat extended after rainfall and cooler conditions encouraged more blooms following a week of very high temperatures.
Sunflowers are at the R4 to R5.9 stages, with many flowers opening this past week on the most advanced fields.
Fungicide and/or insecticide application for grasshoppers in sunflowers is ongoing.
Sclerotinia basal rot/stem canker is common in sunflower fields, and will lead to greater lodging risk at harvest and significantly reduced yields on infected plants.
From South America, Brazil’s Conab moderately lowered its estimates for the country’s 2021/22 corn production to 114.69 MMT. That includes a declining second corn crop, with a new estimated production of 87.41 MMT
Brazilian corn exports are expected to reach 37.49 MMT this marketing year.
As for soybean, Conab made no changes in its latest forecast for 2021/22 soybean production, holding that estimate steady at 124.05 MMT.
Brazilian soybean exports this marketing year are expected to reach 75.22 MMT.
As for wheat, Conab expects the country’s 2022 wheat production to reach 9.2 MMT, which would be a year-over-year increase of more than 19%, if realized.
In Argentina, the Rosario Grains Exchange expects the country’s 2022/23 corn production to reach 54.99 MMT, plus a total soybean production of 47 MMT and a total wheat production of around 17.69 MMT.
Rains seen in recent weeks in Argentina’s agricultural areas allowed producers to finish planting their 2022/23 wheat crop and recharged moisture levels before the next key phases of crop development, the Buenos Aires grains exchange said on Thursday.
In Europe, a severe drought is set to slash the European Union’s corn harvest by 10 million tonnes, dropping it to a 15-year low of 55.4 million tonnes, consultancy Strategie Grains said in its monthly forecast on Thursday.
The forecast marked a 15% cut to its July estimate of 65.4 million tonnes for 2022/23 EU corn production.
The consultancy, menatime, left their 22/23 EU wheat crop at 123.3 MMT, but took their export estimate 1.4 MMT lower to 29 MMT.
In this context, corn prices yesterday showed a new firmness, with the Nov contract on Euronext returned to above €330/t and yesterday, has closed at €334.75/t.
On this wake, FranceAgriMer on this morning showed French corn crop conditions declined steeply last week.
Indeed, an estimated 53% of French grain maize was in good or excellent condition by Aug. 8, down from a revised 62% for the previous week.
That was the lowest maize score for the time of year in FranceAgriMer data going back to 2011.
French farmers are watching to see whether storms forecast from this weekend bring rain and cooler temperatures to avert further maize losses.
The hot, dry summer is expected to lead to an early start to French maize harvesting in the coming month, after quicker than usual harvests for other cereals.
Farmers, indeed, ended spring barley harvesting last week, after already finishing harvesting soft wheat, winter barley and durum wheat.
Other parts of Europe have also endured severe drought and extreme heat this summer, leading forecasters to slash their expectations for this year’s EU corn crop.
Meantime, loading activity from France for the next few weeks looks very strong due to international needs in a context still where activity from the Black Sea is slowly picking up.
Consequently, the production prospects and the export potential too will thus be to be monitored in the coming weeks.
From the Black Sea basin, two more ships left Ukraine’s Black Sea ports on Friday, including one laden with the first Ukrainian wheat, Turkey’s defence ministry said.
The Belize-flagged Sormovsky left Ukraine’s Chornomorsk port, carrying 3,050 tonnes of wheat to Turkey’s northwestern Tekirdag province.
The Marshall Island-flagged Star Laura departed from the port of Pivdennyi, bound for Iran with 60,000 tonnes of corn aboard.
Thus, a total 14 ships have now departed from Ukraine during past two weeks.
The Razoni, the first ship to depart Ukraine under the deal, docked in Turkey on Thursday and was headed to Egypt on Friday, after its initial buyer in Lebanon refused delivery due a delay of five months.
Shipping agent Toros, which managed the Razoni’s offloading in Turkey, said on Thursday that the ship would drop off 1,500 tonnes of its 26,527-tonne load of corn in southern Turkey’s Mersin and the rest of it would go to Egypt.
Meantime, as of August 11, Ukrainian farmers harvested grains and pulses throughout 5.5 mln ha or 49% of a plan, the Ministry of Agrarian Policy informed.
Production volume reached 20.8 mln tonnes with an average yield of 3.81 t/ha.
Particularly, farmers have harvested:
3.8 mln ha of wheat (82% of plan), crop reached 15.4 mln tonnes so far with yield of 4.01 t/ha;
1.4 mln ha of barley (89%; 4.9 mln tonnes, 3.44 t/ha);
106 thsd ha of peas (95%; 239 thsd tonnes, 2.24 t/ha).
Moreover, farmers have already reaped 2.9 mln tonnes of rapeseed with the yield of 2.79 t/ha throughout 1.042 mln ha (95%).
In Russia, according to monitoring by Russian Grain Union, from July 1 to August 8, Russia exported 4.72 mln tonnes of grain, down by 8% compared to the same period of the last year.
Wheat export decreased by 6.2% to 4.161 mln tonnes, barley by 31% to 404 thsd tonnes, corn by 9% to 124 thsd tonnes.
However, as for first 8 days of August, Russia exported 1.586 mln tonnes of grain, up by 16.4% y/y, including 1.357 mln tonnes of wheat (up by 7.9%), barley – 223.5 (up almost 2 times).
Stronger export in August is based on larger shipments of wheat to Egypt.
Meantime, on Friday Russia has set out its grain export taxes for Aug 17 – 23.
According to the agriculture ministry the export duty will decrease for all products wheat, barley and corn.
Particularly, for wheat will move to 5,018.1 roubles/tonne, from 5,219.6 roubles/tonne of a week earlier.
For barley, will be 3,034.0 roubles/tonne, down from 3,504.9 roubles/tonne the prior week.
For corn, the tax will move down to 3,705.8 roubles/tonne, from 3,802.8 roubles/tonne the previus period.
As for indicative price, for wheat will be 367.3 $/tonne, for barley 301.7 $/tonne, and for corn 317.6 $/tonne.
That is compared with 369.4 $/tonne for wheat, 310.6 $/tonne for barley, and 317.6 $/tonne for corn of a week earlier.
On the other hand, Russia will ban imports of some seeds from several locations in Europe and Canada from Aug. 15, its official’s agriculture on safety said on Thursday, citing non-compliance by suppliers with phytosanitary requirements as the reason.
Particularly, imports of tomato and carrot seeds will be banned from a nursery of Satimex Quedlinburg GmbH, in Germany, as well as seeds for corn from a nursery of Limagrain Europe, in France, tomato seeds from a nursery of Axia Vegetable Seeds, in the Netherlands, and seeds for soybeans from a nursery of Semences Prograin Inc, in Canada, Rosselkhoznadzor.
Last week, Russia’s agriculture ministry proposed that the government limits seed imports by setting up quotas, aiming to stimulate domestic production.
From the Middle Kingdom, China’s agriculture ministry on Friday lowered its estimates for soybean imports in the 2021/2022 crop year to 91.02 million tonnes, down 1.98 million tonnes from the previous month’s estimate, after heavy hog industry losses reduced demand for soymeal.
Imports will be down 8.8% from the previous year, said the Chinese Agricultural Supply and Demand Estimates (CASDE) report, which also lowered its estimates for edible oil production in the 2021/22 year by 320,000 tonnes to 27.68 million tonnes.
In contrast, it did not change estimates for the coming 2022/23 crop year that starts in October.
Estimates to corn output, imports and consumption were also unchanged, however recent low temperatures and excessive rainfall in the northeast, might impact corn growth in some areas, it said.
From South East Asia, the Government of Bangladesh, in a statement from the Ministry of Food, said it would import 300,000 tons of wheat from Russia.
From Australia, local bids were mixed yesterday.
Growers in the east coast new crop wheat bids unchanged to a buck or 2 softer.
Trade markets, both track and delivered, were a touch firmer over the course of the day.
Barley continued to slide with new crop markets off $3-5/t and canola off $10-15/t.
The stronger Australian currency is also helping keep a lid on prices.
On the weather side, the 8-day rainfall forecast is looking pretty wet for all states with WA, SA, Vic and NSW forecast to receive 25-50mm across most winter cropping regions.
Some NSW growers will be hoping for falls on the lower end of that range where crops are struggling because of waterlogging.
In other news, rail freight services on a section of the South Western line are suspended after a truck collided with a loaded grain train east of Goondiwindi in southern Queensland earlier this week.
On the international trade scene, an importer group in South Korea is believed to have purchased about 60,000 tonnes of food-grade corn to be sourced from optional origins in a deal earlier this week.
The corn was purchased at an estimated $346.50 a tonne c&f including a surcharge for additional port unloading.
It was for arrival in South Korea around Nov. 10. Seller was believed to be trading house Cofco.
That’s all, thank you.
To all of you, we wish you a good day and… Good Harvest 2022!
Author: Sandro F. Puglisi