Good morning Farmer Family …

Another wave of sales due to fears for a potential global recession, spilled over into the grain markets, yesterday.

Thus, in the US, corn prices dropped 1.55%.

Soybeans were also down but incurred into a lower damage overall the complex, as they trended 1.02% weaker.

Bean oil closed off the lows for the day, but prices still ended 1.33% lower at the bell. 

Meal gave back 1.66%. 

The wheat complex, was the most affected, as CBOT SRW wheat prices fell 2.56%. 

Kansas City ended the day 2.21% weaker. 

Minneapolis spring wheat held relatively firmer, but posted a 1.9% drop on the day.

Weekly USDA Inspections data had 459,420 MT of corn exports for the week that ended 9/22. 

That was down from the 549,476 MT shipped last week and was below the 705k MT shipped during the same week last year. 

MYTD corn shipments reached 1.606 MMT through 9/22. 

As for soybeans, USDA reported 257,547 MT of soybean exports for the week that ended 9/22. 

That was down from 520k MT last week and from 486k MT during the same week last year. 

The accumulated export has reached 1.171 MMT through 9/22. 

As for wheat, USDA had 520,464 MT of wheat exports for the week that ended 9/22. 

That was down from 836k MT the week prior, but was up 36% from the same week last year. 

However, accumulated wheat shipments reached 7.778 MMT, that was down from 8.134 MMT last year. 

Asfter the sessions close, NASS’s weekly update showed 92% of the corn crop was dented as of 9/25. 

That is still 2% points behind the average pace. 

National maturity trails the average pace by 3% points with 58% of the crop now mature. 

That is up from 40% last week. 

NASS showed harvest advanced 5% points to 12% complete. 

The average pace would have 14% of the national crop out by 9/25. 

As for the remaining 86%’s conditions, NASS scored the national crop 52% good/ex. 

That was unchanged from last week, though 1% was moved from excellent to good. 

As for soybean, NASS data had 63% of the soybean crop dropping leaves as of 9/25. 

That is 2% points behind the average pace. 

Harvest had advanced 5% points through the week to 8% nationally, compared to 13% on average. 

Soybean conditions were unchanged – still 55% good/ex.

As for wheat, NASS update showed spring wheat was 96% harvested as of 9/25. 

The average pace would have 97% of the crop out. 

Winter wheat planting for the 23/24 crop advanced 10% points to 31% finished. 

That is 1% point ahead of average. 

Emergence was marked at 9%, compared to 2% last week and 6% on average.

On the weather side, a damaging hurricane weather is on its way to Florida, but the Midwest and Plains will likely see little to no additional precipitation between today and Friday, according to NOAA. 

The agency’s new 8-to-14-day outlook predicts a round of seasonally warm, dry weather for the central U.S. between October 3 and October 9.

In this context, yesterday corn basis bids fell 5 to 10 cents at two Midwestern ethanol plants and eased a penny lower at an Ohio elevator while holding steady elsewhere across the central U.S..

Soybean basis bids were steady to mixed, after tilting 2 to 5 cents higher at two interior river terminals while spilling 12 to 25 cents lower at three other Midwestern locations.

Commodity funds were net sellers of CBOT wheat, corn, soybean, soymeal and soyoil futures contract.

On this morning, Chicago corn and soybean prices climbed, with both markets clawing back from previous session’s nearly two-week low, supported by a slower-than-expected pace of the U.S. harvest.

Wheat prices gained more than 1% and were set to snap a two-session losing streak.

Particularly, the Chicago Board of Trade most-active corn contract was up 0.2% at $6.67-3/4 a bushel, as of 03:56 GMT, and soybeans added 0.3% to $14.15-1/2 a bushel.

Wheat gained 1% at $8.66-1/2 a bushel.

In energy markets, oil prices rose on this morning, after plunging to nine-month lows yesterday.

Officials from major producers reacted to the past days of declines by indicating they may take action to keep price stability.

OPEC+, indeed, may enact output cuts to avoid a further collapse in prices.

Also, the expected arrival of Hurricane Ian caused BP Plc and Chevron Corp to shut in production on Monday at offshore oil platforms in the Gulf of Mexico.

On this wake, Brent crude futures for November settlement rose 65 cents, or 0.77%, to $84.71 per barrel by 05:02 GMT. 

U.S. West Texas Intermediate (WTI) crude futures for November delivery were up 64 cents at $77.35 per barrel.

In the previous two trading sessions, Brent plunged 7.1% while WTI slumped 8.1% under the dual pressure of a surging dollar that makes greenback-denominated crude more expensive for buyer using other currencies and mounting concerns that rising interest rates will trigger a recession that will curtail fuel demand.

In ocean freight markets, the Baltic Exchange’s main sea freight index, edged down on Monday as rates dropped for capesize and panamax vessel segments.

The overall index, indeed, was down 3 points, or about 0.2%, at 1,813.

Particularly, the capesize index was down 11 points, or 0.5%, to 2,195.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as coal and iron ore, were down $86 at $18,207.

The panamax index was down for a fourth consecutive session by 3 points, or about 0.2%, at 1,992.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, fell $32 to $17,927.

The supramax index rose for the ninth consecutive session, adding 5 points, to 1657.

In equity markets, the U.S. economy is slowing.

On this wake, worries that rate hikes might cause a recession are rising. 

Thus, the Dow became the last of the major U.S. stock indexes to fall into what’s known as a bear market Monday, falling 1.1% to 29,260.81.

The Dow, indeed, is now 20.5% below its all-time high set on Jan. 4. 

The S&P 500 fell 1% to 3,655.04. 

The benchmark S&P 500 is down more than 7% in September.

The S&P index now is some 23% off the highs earlier in the year.

The Nasdaq dropped 0.6% to 10,802.92.

Smaller company stocks fell more than the broader market. 

The Russell 2000 dropped 1.4% to close at 1,655.88.

Several economic reports are on tap for this week that will give more details on consumer spending, the jobs market and the broader health of the U.S. economy.

The latest consumer confidence report, for September, from the business group The Conference Board will be released on Tuesday. 

The government will release its weekly report on unemployment benefits on Thursday, along with an updated report on second-quarter gross domestic product.

On Friday, the government will release another report on personal income and spending that will help provide more details on where and how inflation is hurting consumer spending.

Meantime, companies are nearing the close of the third quarter and investors are awaiting the next round of earnings reports. 

That will give them a better sense of how companies are dealing with persistent inflation.

Meantime, on this morning, stocks were mixed in Asia.

Tokyo, Sydney and Shanghai advanced while Hong Kong and Seoul declined. 

Particularly, Tokyo’s Nikkei 225 index picked up 0.8% to 26,651.60 and the S&P/ASX 200 added 0.3% to 3,051.25. 

The Shanghai Composite index was unchanged at 3,051.25, while Hong Kong’s Hang Seng index shed 1% to 17,674.94. 

In Seoul, the Kospi lost 0.4% to 2,212.57.

In currency trading, the British pound dropped to an all-time low against the dollar on Monday and investors continued to dump British government bonds in displeasure over a sweeping tax cut plan announced in London last week.

On this morning, the pound was at $1.0765, up from $1.0686 late Monday. 

The Japanese yen edged toward 145 to the dollar early Tuesday. 

Last week, the Bank of Japan intervened in the market as the yen slipped past 145, gaining a brief reprieve. 

But the dollar’s surge against other currencies is putting pressure on the BOJ and other central banks, especially in developing economies facing growing costs for repaying foreign loans.

On this morning, the dollar bought 144.49 yen, down from yesterday’s 144.65 yen.

The euro rose to 96.29 cents from 96.10 cents of Monday.

In Canada, spring wheat harvest slowed because of widespread rain across the prairies. 

In Manitoba, harvest progressed 8% from the previous week to 65% done. 

Manitoba Ag says that average reported yields are in the 60-70 bushel per acre range. 

Only 2% of Saskatchewan’s spring wheat crop was harvested during the week which is now 77% complete. 

Saskatchewan Ag is still forecasting a 43 bushel per acre yield. 

Alberta farmers harvested 13% of their crop last week and are now 88% complete. 

Alberta Ag raised their yield estimate by 1 bushel from two weeks ago to 54 bushels per acre. 

There were 767.4k mt of common wheat delivered into the elevator system last week. 

Six hundred twenty-four thousand (624k) mt arrived at terminals and just 278.5k mt were exported. 

Visible supplies rose another 200k mt to 3.3 million mt. 

One point nine (1.9) million mt of this is sitting in elevators, 338k mt is sitting in terminals on the west coast, and 1.1 million mt is sitting in Thunder Bay and the Great Lakes. 

As for durum, the Canadian durum harvest is 94% complete in Saskatchewan. 

Saskatchewan Ag is still forecasting a 30 bushel per acre average yield.

Producers have delivered a total of 578.6k mt of durum into the elevator systems as of week 7. 

Total exports were at 277.1k mt, with 77.2k mt exported last week. 

Most (55.9k mt) of the week 7 exports were out of Vancouver, just 7.0k mt was exported from the St. Lawrence.

Wheat prices in Canada were supported by strong futures and a weak Canadian dollar past week. 

There were several “specials” at Prairie elevators where common wheat at $11.50 for November delivery was sold. 

Cash bids continued to improve also for durum last week. 

November-December number 2CWAD was worth $11.25/bu, while $11.90 can be obteined for February-March positions. 

From South America, Brazilian farmers are sowing soybeans at a faster pace this season, according to estimates from two agribusiness consultancies on Monday.

Safras & Mercado, indeed, estimates 2% of the national soybean area has been planted so far for the 2022/2023 cycle, more than twice as much as last year’s 0.8% of the area and above the historical average of 0.8% for this point in the season.

Consultancy AgRural estimates farmers had planted 1.5% of the soybean area in Brazil, compared with 1.3% for the same period last year.

According to Safras, Parana soy farmers had planted 9% of the expected area by Sept. 23 while Mato Grosso and the states of Mato Grosso do Sul and Sao Paulo each had planted 2% of fields.

Brazilian soybean growers are expected to plant the oilseed on 42.88 million hectares, the biggest acreage in history and a 2.6% increase from last year, Safras said.

Brazil’s government estimates national output will be 150 million tonnes this season, which would be a record.

In Europe, Euronext started the week with losses both in grains and oilseeds prices. 

The risk of a significant contraction in demand is weighing down all commodity prices, despite a fall in the euro to its lowest level in over twenty years.

Yesterday’s session was also particularly poor in terms of information.

To note, the European Union’s crop monitoring service MARS on Monday raised its projections for Russia’s 2022 wheat crop to a new record high, but lowered its grain maize crop forecast to take account of hot and dry summer weather.

Particularly, MARS estimated the Russian wheat harvest at 95 million tonnes, up from 88.8 million seen in its previous estimate in June, and now 25% above last year.

From the Black Sea basin, Ukraine on Monday urged the European Union to support its plans to make the emergency paths for grain exports through the bloc permanent, with investment in at least five border terminals and a pipeline through which sunflower oil would flow.

The referendum in Russian-occupied Ukraine is underway and some sort of clarity should emerge mid-week. 

It is hard to say what it means for agricultural markets.

Meantime, some analysts are drawing parallels back to the Crimea referendum back in 2014 when, after a brief rally, ag markets lost over $2/bu post that event as the supply chain returned to normal. 

Russia harvesting data provided by Sovecon as of Sept 22, had all grains at 137.9 million tonnes, of which 100.0 million tonnes of wheat, 23.6 million tonnes of barley, 1.5 million tonnes of corn and 2.1 million tonnes of Sunseeds.

Some farmers report insufficient storage capacity, first of all in the Volga region, which is starting to harvest its huge sunflower crop. 

Russia exported 900,000 tonnes of grain last week compared with 1 million tonnes the previous week. 

Russian wheat prices rose last week. 

Particularly, according to the IKAR, Russian prices for wheat with 12.5% protein content and for supply from Black Sea ports rose by $8 to $325 per tonne free on board (FOB) at the end of last week. 

Sovecon sees wheat for immediate delivery at $315-319 per tonne, up from $310-314 per tonne a week ago. 

Price for domestic 3rd class wheat, European part of Russia, excludes delivery was at 12,650 rbls/t +50 rbls (Sovecon).

Price for sunflower seeds was at 23,225 rbls/t -700 rbls (Sovecon).

Price for domestic sunflower oil was at 75,675 rbls/t unchanged (Sovecon).

Price for domestic soybeans was at 32,400 rbls/t, unchanged (Sovecon).

Export price for sunflower oil was at $1,230/t -$40 (Sovecon).

Export price for sunflower oil was at $1,135/t +$15 (IKAR).

Price for white sugar, Russia’s south was at $835.7/t -$19 (IKAR).

Meantime, Russian farmers could sow less winter grains for the 2023 crop this autumn than a year ago due to heavy rains which replaced dry weather in the central and southern regions, analysts said.

Farmers have already sown winter grains on 8.6 million hectares, down 1.5 million hectares from the area at the same point a year ago, Sovecon consultancy said, adding that the gap was 1.1 million hectares a week ago.

“This is the lowest area for this week since 2013.”

Farmers in the central region planted only 2.0 million hectares, down 900,000 from a year ago, and 2.0 million hectares in the southern region, down 700,000.

Most parts of Russia’s southern regions can sow winter grains until mid-November. 

The deadline for optimal sowing in the central regions is mid-October.

However, some farmers plan to or are considering reducing the winter wheat sowing area this year as they believe that domestic price is too low for their production costs and they may replace it with soybeans.

From the Middle Kingdom, soymeal prices in China, are at record highs as rising demand from farmers came in after months of lacklustre soybean imports.

Chinese soybean imports in August dropped 25% year-over-year, and totals for the first eight months of 2022 are down nearly 9%. 

Soymeal stocks have fallen for 10 consecutive weeks to 493,000 tonnes in the week ending Sept. 17, well below the five-year average of 845,000 tonnes, according to Shanghai JC Intelligence Co Ltd (JCI).

Consequentially, cash soymeal prices rose by more than 100 yuan daily for several days last week, reaching as much as 5,600 yuan a tonne in northwestern China’s Xi’an city JCI-SBM-XIAN on Friday, according to JCI.

Current prices are higher than a previous peak of 5,218 yuan hit in March, and around 40% higher than a year ago when power rationing forced some plants to shut down.

Crush margins turned positive last week for the first time in months, and spot soymeal prices dropped slightly on Monday after feed buyers had completed the pre-holiday purchasing, and as crushing volumes increased.

But prices are likely to remain high in the coming months however, with soybean arrivals staying at low levels of around 6 million tonnes this month and next, according to JCI.

“Soymeal supplies are sold out in China,” said a Singapore-based trader with a company that has soy processing plants in China. 

“For October, 80% of the soymeal likely to be produced has already been sold.”

However, the surge in spot prices to an average 5,352 yuan ($747.94) per tonne on Friday could curb enthusiasm for expanding hog herds.

Meantime, hog prices have already rallied about 40% this summer.

($1 = 7.1557 Chinese yuan renminbi).

From Australia, 2022-23 Aussie harvest is officially under way in Central Queensland (CQ).

Kicking off proceedings last week were chickpeas.

Meantime, scattered showers pushed through parts of SA and VIC yesterday with falls of up to 5mm being recorded in the past 24 hours. 

Conditions remain overcast throughout today. 

According to ABARES estimates released in its September Australian Crop Report, Australia is forecast to produce 32.2 million tonnes (Mt) of wheat, 12.3Mt of barley and 6.6Mt of canola, all down slightly from last year.

Meantime, export pace for September is 3.24Mt total grains on the stem (3.33Mt last week). 

Wheat is 2.07Mt, barley dropped to 634,000t (674,000t last week). 

Canola is unchanged 260,000t and sorghum is unchanged at 270,000t. 

Local markets returned from the long weekend with current crop quality wheat firmer. 

In early trading on Clear Grain Exchange, for H2 in Melbourne zone is up approximately $20/t week on week, and ASW1 in Victoria nearby continued to attract a bid. 

New crop grower bids were relatively unchanged to a touch firmer. 

However, liquidity remained thin for now. 

Canola price movements lagged, meantime. 

On the international trade scene, South Korean animal feed maker Nonghyup Feed Inc (NOFI) has bought an estimated 135,000 tonnes of animal feed corn in an international tender that closed on Monday.

The corn was bought in two consignments, the first of which was 68,000 tonnes from trading house GrainCorp at a premium of 172.75 U.S. cents c&f over the Chicago December corn contract plus a $1.50 a tonne surcharge for additional port unloading.

The second consignment of 67,000 tonnes was bought from trading house CJ International at a premium of 181.40 U.S. cents c&f over the Chicago December corn contract plus a $1.75 a tonne surcharge for additional port unloading.

Both were bought for arrival in South Korea around Jan. 23.

South Korea’s Feed Leaders Committee (FLC) purchased about 68,000 tonnes of animal feed corn expected to be sourced from South America in a private deal without an international tender being issued.

The corn was purchased at an estimated $330.95 a tonne c&f with an additional $1.50 a tonne surcharge for additional port unloading.

It was for shipment from South America between Oct. 25-Nov. 25. Seller was believed to be trading house Viterra.

A United Nations food security agency has issued an international tender to purchase 100,000t of milling wheat from optional origins that closes on Wednesday. 

The grain is for delivery in October and November and will be donated to several countries in east Africa, Asia and the Middle East.

Taiwan issued an international tender to purchase 52k mt of grade 1 milling wheat, sourced from the United States, which closes on September 29. 

The grain is for shipment in November.

That’s all, thank you.

We wish you a good day.

Author: Sandro F. Puglisi

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