Yesterday, USDA released its June World Agricultural Supply and Demand Estimates (WASDE) report.
The report showed historically tight corn stocks, which helped spark enough technical buying to push prices around 1% higher by the close.
Wheat prices also grabbed moderate gains, but soybeans, soymeal and soyoil futures fell into the red after some technical selling.
On macro market, energy futures trended modestly higher, with crude oil up around 0.5% to move back above $70 per barrel.
Diesel and gasoline gathered similar percentage gains.
On Wall St., investor fears of inflation eased somewhat despite fresh evidence of rising costs from the consumer price index, which has risen 5% from a year ago.
Consequentially, the Dow gained 105 points in the afternoon trading to reach 34,552, however, closed the session only at 19 points higher to 34.466.
The S&P 500, meantime, reached a new record high closing to 4.240,50.
The U.S. Dollar, meantime, softened slightly.
Coming back on grains market, corn futures were 6 to 8 1/4 cents higher at the close.
July futures ended the session below the $7 mark, but traded with a 29 3/4 cent daily range.
USDA’s cash prices went un-adjusted in this morning’s WASDE at $4.35 for old crop and $5.70/bu for 21/22 delivery.
USDA’s weekly Export Sales report showed 189,589 MT of old crop corn bookings from the week ending 6/3.
Paired with the 1.6 MMT of shipments, old crop commitments were 69.3 MMT (2.728 bbu).
USDA’s updated export forecast is for 2.85 bbu, up 75 mbu from the May WASDE. New crop corn bookings were a light 26,376 MT, which was a 17 week low and below the 200k-600k MT expectations.
Old crop stocks were cut 150 mbu to 1.107 bbu. They added 75 mbu each to exports and ethanol corn use.
New crop stocks are estimated 150 mbu tighter than last month (now 1.357 billion bu) reflecting the lighter carryin.
The average of trade estimates was for a 1.416 bbu 21/22 carryout.
USDA forecasted Brazilian corn production at 98.5 MMT. That was 2.1 MMT below the 96.4 MMT from CONAB’s estimate this morning.
CONAB data showed a 10 MMT cut from 106.4. Argentina’s production was left at 47 MMT.
Old crop soybean futures closed report day with double digit losses of 13 to 18 1/2 cents.
New crop beans on the other hand ended 9 3/4 to 11 1/4 cents higher tightening the spread to 84 1/2 cents.
Soymeal futures closed $4 to $4.80/ton lower.
BO futures closed 113 points weaker in July, to 5 points higher in Sept.
USDA reported 15,673 MT of old crop beans were booked for export on the week ending 6/3.
That was the lowest weekly sale since the 92k MT net cancellation reported for the week ending 4/1.
There were 278,687 MT of beans shipped, bringing MYTD shipments to 57.744 MMT (2.122 bbu).
USDA’s June old crop export figure is for 2.28 bbu, unch from the May WASDE.
New crop soybean bookings were reported at 105k MT this week, bringing the forward book to 7.555 MMT.
USDA sees crush at 2.175 bbu, down 15 million from the May WASDE forecast.
Carryout was lifted to 135 mbu. New crop stocks were raised accordingly to 155 mbu, with no production adjustment.
Global soy numbers reported show USDA expects carryout in September to be 88 MMT, up from 86.55 MMT in May.
Trade estimates averaged no change, ranging from a 2.1 MMT cut to a 3 MMT increase. For new crop, USDA expects soy carryout at 92.55 MMT, up from 91.1 MMT forecasted in May.
The NMY export share estimate for U.S. beans is to drop from this season’s 36.2% to 32.6%, unchanged from May’s estimates.
CONAB thinks Brazil’s soy output is 135.86 MMT, which is 525k MT above their May forecast citing higher area and slightly (0.17 bpa) better yields.
USDA went with a 137 MMT crop for Brazil, a 1 MMT bump from May.
Wheat prices were mixed following the report as SRW weakened to HRW and HRS gains.
Spring wheat futures were the biggest mover on the day, ending with double digit gains of as much as 12 cents in the front months.
KC wheat closed 3 1/2 to 5 1/4 cents in the black. CBT SRW futures ended the session firmly mixed within a penny and a half of UNCH.
USDA raised the winter wheat yield by 1.1 bpa to 53.2, raising the national winter wheat crop 26.1 mbu to 1.309 billion.
All wheat production was forecasted at 1.898 mbu which was slightly above the trade average guess and implies a constant spring and durum wheat production of 589 mbu.
The increase to winter wheat output came despite a 36.67 mbu cut to WA.
KS saw the largest nominal output increase, adding 77.55 mbu of production on a 2 bpa better yield.
Nationally, HRW was upped 40.6 mbu and white winter wheat was cut 18.42 mbu to 771 and 202 million respectively.
USDA trimmed the old crop wheat stocks by 20 mbu to 852 mbu.
That came via a 5 mbu increase to each class’s exports while durum was UNCH at 30 mbu.
For new crop, USDA raised winter wheat production 26 million bushels and hiked feed use 10 million.
Projected ending stocks of 770 mbu were 4 below last month.
Globally, traders anticipated a 1.7 MMT lighter old crop carryout and got a 1.19 MMT cut to 293.48.
New crop stocks were estimated 300k MT lighter on average, but were instead raised 1.84 MMT to 296.8 MMT.
USDA raised EU, Russian, Ukrainian, and U.S. wheat output for a 5.46 MMT larger world crop of 794.44 MMT.
Export Sales data from this morning showed 325,945 MT of wheat bookings from the week ending 6/3.
That was in the middle of pre-report estimates. Wheat shipments came in at 136,257 for the week.
From South America, the Buenos Aires stock exchange revises upwards its estimate of maize production to 48 million tonnes against 46 previously posted.
On European market, climatic French conditions remain favorable and show some optimism for 2021 production.
However, weed control problems were recorded, in particular with ray gras infestations in several plots.
Meantime consultancy Strategie Grains on Thursday raised its monthly forecast for the 2021 soft wheat harvest and exports from the European Union next season due to improved competitiveness on the world market but lowered them for the current season.
It also lifted its EU 2021 barley and maize crop outlook, supported by good weather conditions.
Since last month, forecast for EU-27 soft wheat exports has increased by 1.6 million tonnes to reflect the very good competitiveness of Bulgarian and Romanian wheats and, to a lesser extent, Baltic, German and Polish wheats on early 2021/22 contracts.
Strategie Grains expects 2021 EU soft wheat production at 131.1 million tonnes, up from 129.6 million in May and 119.4 million last year.
EU soft wheat exports in 2021/22 were now pegged at 28.6 million tonnes, up from 27.0 million projected last month.
That was now well above the 26.9 million tonnes EU wheat exports projected for this season, an estimate that was lowered by 600,000 tonnes this month.
The consultancy did not give a reason for the change.
For barley, Strategie Grains lifted its estimate for the 2021 EU harvest by 300,000 tonnes to 53.9 million tonnes.
It slightly raised its forecast of EU maize production by 100,000 tonnes to 65.3 million tonnes.
According to the consultancy, the start of the corn development cycle was sluggish but plant growth is now taking place amid good conditions almost everywhere.
From Black Sea basin, Russian consultancy IKAR has raised its estimates for the country’s 2021 wheat production by more than 73 million bushels, bringing the total to 3.013 billion bushels but did not elaborate on that upward revision.
Russia is the world’s No. 1 wheat exporter.
Meantime, USDA have revised upwards Russian and Ukrainian wheat productions, leading to an increased carry-over stock at the end of the next season in the main exporting countries.
Cherkizovo Group, Russia’s largest meat producer, has unveiled plans to build a 130-tonne-per-hour feed mill and complete the second phase of a silo with a one-time grain storage capacity of 220,000 tonnes in the Lipetsk Region in Russia.
The company said it plans to invest RUB 3.5 billion ($44.4 million) in the feed mill and RUB 2 billion ($27.7 million) in the silo.
The feed mill and silo projects are part of a broader RUB 22.5 billion ($311.4 million) that Cherkizovo envisages spending on projects in the Lipetsk Region.
From the Middle Kingdom, China lowered estimates for the use of corn in feed consumption in 2020/21, as increased imports of grains and ample supplies of domestic wheat and rice have replaced some corn in feed, the country’s agriculture ministry said on Thursday.
China’s 2020/2021 corn consumption in feed was seen at 182 million tonnes, down 3 million tonnes from the forecast in the previous month, according to a statement published on the website of the
Ministry of Agriculture and Rural Affairs.
Estimates on output, planting acreage and imports of corn in the 2021/22 year remain unchanged from a month ago, according to the ministry.
From Australia, weather maps remain positive for the next 10-15 days across southern Australia and the east coast.
Total precipitation is predicted to push up around 15-20mm for most regions in the next 15 days.
Rainfall through the Riverina was fantastic with 15-25mm range received which puts smiles on growers’ faces.
Crops still delayed but the potential is still there on cereals following the latest rain received.
Canola crops were reported under pressure with patchy germination.
The latest rain event will struggle to fix that issue.
Markets were a tad softer by the afternoon with the trade not overly keen to participate prior to USDA report.
ASX Jan 22 wheat settled down $2.50/t to $307/t and barley down $1/t to $259.50/t.
On the international scene, Tunisia bought 50,000 t of milling wheat, 2 x 25 k,
at $297.75 a tonne c&f all from Promising international.
The grain is for shipment in July.
Japan purchased 6.7 million bushels of food-quality wheat from the United States, Canada and Australia in a regular tender that closed yesterday.
Of the total, 52% was sourced from the U.S. The grain is for shipment in August.
Philippine importers purchased 1.8 million bushels of animal feed wheat, likely sourced from Australia, in a tender that closed yesterday.
The grain is for shipment in August.
Tonigth we will see how the sessions close making a balance of the week.