US farm markets posted another round of strong prices this week.
On Feb. 9, USDA released its monthly World Agricultural Supply and Demand Estimates (WASDE), making more cuts to South American crop production due to dry conditions.
US Thursday’s monthly inflationary number for January at 7.5 percent was the highest since February of 1982 and above Wall Street expectations.
However this trigghered a broad sold off in equities markets, also hitting a large numbers of commodities ag.
Meantime, overnigth on Thursday, there was another big change in the commodities as a number of key markets tied to Russia made big moves late in the day, including crude oil and Chicago SRW wheat.
Thus the dam broke on Friday morning when the markets were flooded by headlines concerning the seemingly inevitable invasion of Ukraine by Russia, as Russia had moved a number of “cruisers, submarines, and other warships” into the Black Sea and Mediterranean.
That was seen a clear indication the expected invasion will come sooner rather than later.
As we know, for the wheat market, combined Ukraine and Russia account for roughly 30% of global exports annually.
If Ukraine can’t ship from its Black Sea ports, and the world decides to boycott Russian grain, the other major global wheat exporters, US includes, will be called upon to pick up the slack.
Thus, corn prices posted new contract highs this week and closed out 4.91% higher from last Friday.
Soybeans continued their rally, peaking over $16 for a short time on Thursday.
On the week, March was up 1.9%.
Soybean meal was up 2.86%.
Soy oil was up a modest 0.55% for the week.
Meantime, propped up by a strong Friday session, the wheat complex was the winner for the week with MPLS spring wheat led the way, up 5.31%.
KC rallied by 4.90%.
CBOT was 4.52% higher.
Particularly, corn futures were up 30.5 cents to $6.51/bu.
Soybean futures were up $0.295 at $15.83/bu.
Since Jan. 1, March corn prices are up 57.5¢ and March soybean prices are up $2.44.
Soymeal jumped by $12,7/smt at $456.60 smt.
Soy oil soared by $0.36 cents at $65.72.
CBOT soft red winter (SRW) futures gained 34.5 cents to close at $7.98/bu.
KCBT hard red winter (HRW) futures were up 38.5 cents to end at $8.24/bu.
MGE hard red spring (HRS) futures gained 48.5 cents to close at
Meantime, as of February 10, 2022, US corn 3YC (Gulf) was at $298/mt (up $8/mt from last week).
US soybean 2Y (Gulf) quoted at $630/mt (up $13/mt from last week).
US wheat No 2 Hard Red Winter (HRW) was valued at $377/mt (up $4/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was at $337/mt (up $6/mt from last week).
Northern Durum offers from the Great Lakes for April/May 2022 delivery continued to quote at $635/MT ($17.28/bu) (unchanged from prior week).
Meantime, USDA saw the average cash price for corn oil from 71.63 EC to 72.4 SD c/lb regionally through the week that ended 2/11.
That compared to between 69.67 and 71.57 cents last week.
Ethanol cash prices were between $1.88 to $2.06/gal.
Weaker compared to prior week when ranged between $1.94 SD to $2.02 EC.
FOB DDGS prices were seen steady $285/ton in NOLA and steady at $298 in the PNW.
Meanwhile gasoline futures ended the week at $2.7070, that was up from $2.6759/gal posted last week.
The weekly average cash B100 price was down from $5.55 to $5.48/gal during the week of 2/11.
USDA’s weekly Crush report showed the estimated processing value of soybeans was $18.73/bu on $15.81 cash beans.
That compared to $18.30/bu reported prior week on $15.36 beans.
Meantime, corn basis bids were steady to weak across the central U.S. on Friday after sliding 2 cents lower at a Nebraska elevator and 5 cents lower at an Illinois river terminal.
Soybean basis bids tumbled 16 cents lower at an Illinois river terminal and dropped 5 cents at an Ohio elevator while holding steady across other Midwestern locations.
Wheat basis this week in both the Gulf and Pacific Northwest (PNW) was down for HRW compared to last week and flat for HRS and SRW.
Soft white prices were also lower.
Transportation logistics have improved since the beginning of the year.
Buyers who make up the foundation of U.S. wheat exports continue filling their regular tenders at U.S. ports.
For other importers, volatile futures prices are encouraging a more “just-in-time” buying pattern that reflects the wide range of recent weekly export sales.
In energy market, oil prices ended 3% higher on Friday at fresh seven-year highs as escalating fears of an invasion of Ukraine by Russia, added to concerns over tight global crude supplies.
Thus, Brent crude futures settled $3.03, or 3.3%, higher at $94.44 a barrel, while U.S. West Texas Intermediate crude rose $3.22, or 3.6%, to $93.10 a barrel.
Both benchmarks touched their highest since late 2014, surpassing the highs hit on Monday, and posted their eighth consecutive week of gains.
Brent indeed, ended the week 1.25% higher, while WTI rose 0.86%%.
Trading volumes spiked in the last hour of trading, with volumes for global benchmark Brent climbing to their highest in more than two months.
The International Energy Agency raised its 2022 demand forecast and expects global demand to expand by 3.2 million barrels per day (bpd) this year, reaching an all-time record 100.6 million bpd.
Meantime, the IEA said that Saudi Arabia and the United Arab Emirates could help to calm volatile oil markets if they pumped more crude, adding that the OPEC+ alliance produced 900,000 bpd below target in January.
In the United States, drillers added the most oil rigs in a week in four years, with the rig count, an indicator of future production, rising 19 to 516, its highest since April 2020, energy services firm Baker Hughes Co said.
Meantime, the Biden administration responded to high prices by again stating this week that it has been talking with large producers about more output, as well as the possibility of additional strategic releases from large consumers, as it did late last year.
Also, Indirect U.S.-Iran nuclear talks resumed this week after a 10-day break.
A deal could see the lifting of sanctions on Iranian oil and ease supply tightness.
In the freight market, the Baltic Exchange’s dry bulk sea freight index rose for a fourth straight session on Friday and registered its biggest weekly gain since June 2021, supported by strong demand across vessel segments.
The overall index, which factors in rates for capesize, panamax and supramax vessels, indeed, rose 37 points, or 1.9%, to 1,977, its highest level since Jan. 12.
The index has risen nearly 39% this week.
The capesize index eased 47 points, or 2.5%, to 1,857.
However, the index gained nearly 50% this week.
Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, fell by $392 to $15,397.
The panamax index gained 70 points, or 3%, to 2,403.
Average daily earnings for panamaxes, which ferry 60,000-70,000 tonne coal or grain cargoes, rose by $625 to $21,623.
The supramax index climbed 101 points to 2,158.
In contrast, on week 6, freight rates continue to fall in the Azov and Black Sea region.
The rate for a shipment of 3,000 tons of wheat from Azov to the Marmara Sea ports is $34 per ton.
According to Sea Lines shipbrokers, the wheat and corn market is still in a deplorable state, there are practically no deals from Russian ports.
Ukrainian wheat is trading somewhat better, so some shipowners prefer cargoes from the ports of the Black Sea.
That prevents the Sea of Azov freight market from collapsing.
Most active trade is observed for subcultures now, and the most popular destination is Italy.
As a result, rates to the Adriatic ports do not fall as quickly as to other destinations.
Importantly, this week quota distribution for wheat, corn and barley shipment for the period starting February, 15 till the end of June, 2022 has been published.
Thus, now charterers can start planning shipments of these grain products for the upcoming months.
According to Sea Lines, on week 6, freight rates for wheat parcels from Azov make $32 to the Black Sea, $34 to Marmara, $54 to Mersin and $59 to Egypt.
Freight rates from Rostov AB (after bridge) are $1 above, from Rostov BB (before bridge) the same, from Yeisk and Taganrog $1 below, and from Temryuk $3 below those from the port of Azov.
In the Caspian, freight rates went up.
On week 6, freight rates for shipping corn by 3,000 dwt bulkers to Iran make $29 from Aktau, $33 from Makhachkala, and $40 from Astrakhan.
In equities markets, Wall Street stocks ended sharply lower on Friday for the second straight session, as investors fretted about deepening tensions between Russia and Ukraine.
Indeed, nine of the 11 major S&P 500 sector indexes declined, led by technology, down 3.0%, and consumer discretionary, down 2.8%.
The energy sector index surged 2.8% as oil prices hit seven-year highs.
With investors already fretting about inflation and rising interest rates, selling on Wall Street accelerated after Washington warned that Russia had massed enough troops near Ukraine to launch a major invasion, and that an attack could begin any day.
Thus Nvidia Corp tumbled 7.3%, Amazon.com Inc dropped 3.6%, and Apple Inc and Microsoft Corp both lost over 2%.
The four companies weighed more than any others on the S&P 500’s decline.
The Philadelphia Semiconductor index sank 4.83%.
Under Armour Inc slumped 12.5% after warning that its profit margin would be under pressure in the current quarter.
Online real-estate platform Zillow Group Inc jumped 12.7% after beating Wall Street estimates for quarterly sales, boosted by an 11-fold revenue increase in its homes segment.
In this context, the Dow Jones Industrial Average fell 1.43% to end at 34,738.06 points, while the S&P 500 lost 1.90% at 4,418.64.
The Nasdaq Composite dropped 2.78% to 13,791.15.
For the week, the Dow slipped 1%, the S&P 500 fell 1.8% and the Nasdaq shed 2.2%.
Wall Street’s Friday sell-off follows a slump on Thursday, when data showed consumer prices surged 7.5% in January, the biggest annual increase in 40 years.
The CBOE volatility index, also known as Wall Street’s fear gauge, was up for a second straight session and hit its highest level since the end of January.
A University of Michigan survey showed U.S. consumer sentiment fell to its lowest in more than a decade in early February on expectations that inflation would continue to rise in the near term.
Meantime, the dollar index, which tracks the greenback versus a basket of six currencies closed at 96.073 points, soaring for the week more then 0.6%.
On the weather side, much needed rain fell across Texas, eastern Oklahoma, and eastern Kansas this week.
In Colorado above average snowfall in January has improved soil moisture.
In Nebraska and Kansas, a broad area of moderate drought and abnormal dryness expanded.
In those areas, 30-to-90-day precipitation totals ranked in the top 5 driest on record.
Wyoming also saw dry conditions expand.
In the PNW, a wet fall and especially rainy December helped relieve the 2021 drought.
However, concern about moisture conditions is growing following a second week of dry weather in the Pacific Northwest.
Some additional rain and snow could hit parts of the eastern Corn Belt and Great Lakes region between today and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA.
The agency’s 8-to-14-day outlook predicts seasonally warm weather for the entire United States between February 18 and February 24, with a dry pattern holding over much of the Plains during that time.
Meantime, this week Texas’s State Crop Progress report had showed winter wheat conditions had improved for the areas that received decent amounts of moisture.
Particularly, winter wheat headed reached 7 percent, up 5 points from the previous year and 3 points above normal as of 2/6.
Conditions showed 0% for excellent and just 9% for good – with a whopping 71% poor/very poor.
Oats headed reached 6 percent, up 1 point from the previous year and up 4 points from normal.
In Canada, as of February 7, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $485.88 per tonne, up C$7.62/t from prior week;
– for the N2 class CWRS 13.0% – $478.88/t, up C$8.09 wow;
– for the N3 CWRS – $468.63/t, up C$4.84 from prior week.
As of February 07, 2022, for the N1 CWAD 13% (durum wheat first class) deferred average prices for delivery in April ’22 were at C$591.58 down C$97.74 per tonne week on week.
Export basis West Coast & Central SK soared from C$ 150.55 to 254.23 per tonne, as delivered FOB price Great Lakes was posted at C$ 805.76, down from C$ 839.86 per tonne posted prior week.
That was C$34.10 lower from the prior week.
Meanwhile, as of February 9, 2022, durum wheat (CWAD) FOB price delivered in St. Lawrence, was valued at C$839.45 per tonne, down C$16.18 from prior week.
As of February 11, 2022, for the N1 CWAD 13% (durum wheat first class), average street prices in REGIONAL ZONES were at C$578.37 per tonne, down C$14.29 from prior week.
In South America, as of February 10, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $308, up $1 from prior week.
Argentina corn feed was up $13/t for the week, closing at $286.
Brazilian corn feed (Paranagua) was at $330, up $10 from prior week.
Argentina feed barley, was up $5 on week, posting at $315.
Argentina soybean was up $12 at $640.
Brazilian soybean rose $4 finishing the week at $617.
In Europe, Euronext ended the week on a positive note in a market still marked by the Ukrainian crisis.
The Russian announcement of the deployment of maritime troops in the Black Sea and in the Sea of Azov indeed reinforced the risk premiums and got more credibility to the scenario of a military invasion in Ukraine.
The impact of the “military exercises” on Ukrainian trade flows is however still subject to debate among local observers as Russia’s naval exercises and the closure of traditional shipping routes have so far not affected the Ukrainian grain export market, traders said on Friday.
“It could be a big event or nothing”.
“The main question is if and for how long shipping could be disrupted by Russian naval exercises.”
However, the news caused waves in the market on Friday, with a renewed debate about whether export demand could be transferred to west Europe.
Meantime, France’s farm ministry on Thursday lowered its estimate of the area sown with winter soft wheat for the 2022 harvest to 4.75 million hectares (mln ha) from 4.92 mln ha in its initial projection in December.
The reduced estimate was down 4.3% compared with the 4.96 mln ha harvested in 2021 and was also 1% lower than the average area of the past five years, the ministry said in a crop report.
Ditto for durum for which the projected area for the 2022 harvest is at 277.000 ha, down 2.5% compared with the 284.000 ha in 2021 and also lower than the average area of the past five years.
The expected winter barley area was increased to 1.25 mln ha from 1.23 mln ha previously, now up 4.6% from last year’s harvest but 1.6% below the five-year average.
For winter rapeseed, France’s main oilseed crop, the area for 2022 was revised up to 1.16 mln ha from 1.10 mln ha in December. That was now 18% above the 2021 level although 6.9% below the five-year average.
Weather conditions were currently favourable for crop development, the ministry said.
For spring sowing in the coming months, it said a survey of farmer intentions carried out in December suggested that the spring barley area would be stable to lower compared with last year.
Among other spring crops, farmer plans pointed to a drop of at least 6% in the overall area of grain and fodder maize (corn).
For sugar beet, the area was seen stable to down 3%, while for sunflower seed sowings were expected to decline by at least 3%.
Expectations for EU soft wheat production in 2022/23 is currently at 128 MMT.
Warm winter weather means wheat crops are in good condition in the four main European production countries with positive conditions created for the summer 2022 harvest, crop experts said on Friday.
Wheat in France, Germany, Britain and Poland has generally not suffered frost damage, although frost is still possible in coming weeks.
Wheat in top producer France benefited from moderate weather this winter while rainfall in the coming days may maintain favourable growth.
German wheat has not suffered significant frost damage so far. “Widespread rain in the past week was also welcome and water shortages are not a serious problem,” one German grains analyst said.
Germany’s winter wheat area for the 2022 crop was increased 0.4% on the year to 2.87 million hectares.
Britain’s wheat crop is in generally good condition and production could potentially rise slightly from last year although high fertilizer costs could limit the extent of any increase.
Britain’s wheat area for this year’s harvest has increased 1.3% to 1.81 million hectares.
Poland’s winter wheat is in good condition with no major frost damage so far and rain has also been adequate, said Wojtek Sabaranski of analysts Sparks Polska.
Poland’s winter wheat area is estimated to be little changed at over 2.1 million hectares.
Meantime, Consultancy Strategie Grains lowered its estimates for 2021/22 EU soft wheat exports to 30,4 MMT, citing increased competition from South America and the Black Sea region, along with lower expectations for imports by Algeria and Egypt.
In this context, the wheat contract rose 3.25 euros for the week closing to 268.75 euros per tonne.
That represent a weekly gain of 1.22%.
Past week was down 4.75%.
Corn prices eased 3.25 euros for the week, to close at 255 euros per tonne, shedding 1.29% lower for the week.
Past week fell 2.14%.
In rapeseed, May futures closed this week at 691.50€/t, down €5/t setting a 0.72% losse week on week.
March-22 UK feed wheat futures, rose £3.5 from prior week, closing at £219.15/t.
Meantime, as of February 10, 2022, FOB prices in US dollar for French wheat with 11.5% protein and February delivery, were at $309/mt, unchanged from prior week.
French durum wheat, FOB Port la Nouvelle was not quoted for the fourth consecutive week.
French durum wheat – basis La Pallice, was at $502.79/mt, down $29.08 from prior week.
Spanish durum wheat Sevilla (DepSilo), was at $605.63/mt, down $12.02 from prior week.
Italian durum wheat Bologna (Delivered to first customer), was valued this week at $617.06 per tonne down $4.02 from past week.
German wheat (Depsilo) with 12.5 pro was at $323.38/mt, down $16.33 from last week.
Particularly wheat for February onwards delivery in Hamburg was offered for sale at about 13 euros over Euronext March contract, but the strong rise in Paris making afternoon premiums difficult to assess.
Baltic wheat (Delivery First) was at $293.67/mt, down $23.16.
Corn delivered Bordeaux Spot – July 2021 basis was at $289.1 per tonne, up $6.59 from prior week.
FOB Rhin Spot – July 2021 basis was at $294.82 per tonne, down $1.42 week on week.
Feed barley delivered Rouen – July 2021 basis was at 278.82 $/t, up $2.03.
Malting barley FOB Creil Spot – July 2021 basis was at $390.80 per tonne, down $9.2/t from prior week.
Rapessed FOB Moselle Spot – Flat – 2021 harvest was at 788.46 $/ton, down $24.78 compared to prior week.
Standard sunseed delivered St Nazaire Spot – Flat – 2021 harvest was up 16.45$ from prior week at $725.61 per tonne.
(Eur/USD = 1.1427).
From Africa, Cameroon’s association of millers has suspended deliveries of flour and wheat bran throughout the country due to the rising price of wheat.
The association represents 70% of the market for flour production in Cameroon.
“This measure taken reluctantly aims to limit the scope of losses that these companies have been recording for three months because of the uninterrupted and unprecedented increase in the price of wheat, their raw material, and insufficient measures from the public authorities to help them acquire it”.
Flour prices have risen so much since October that some bakers in Cameroon have stopped making bread, said Jean Claude Yiepmou Kapwa, president of the national bakers’ syndicate.
The price of a 50 kg bag of flour is up to 22,000 CFA francs ($38.18) from 19,000 CFA francs ($32.97) in major cities Douala and Yaounde and even higher in other parts of the country.
The bakers’ syndicate in January said negotiations were underway with the authorities, millers and consumer rights’ associations over prices.
The millers’ association said it would need an adjustment to selling prices to be able to buy wheat and make flour available again.
($1 = 576.2600 CFA francs).
From the Black Sea basin, Russian wheat export prices fell for a fourth consecutive week last week.
Indeed, according to the IKAR, Russian wheat with 12.5% protein content loading from BlackSea ports for supply in late February-early March stood at $319 a tonne free on board (FOB) last week.
That was down $6 from the previous week.
According to SovEcon, wheat export price was down $7, at $323 a tonne.
Barley price was down $18 at $278 a tonne, meantime.
Domestic 3rd class wheat, European part of Russia, excluded delivery was at roubles/t 15,200 unchanged from prior week, although in USD gained +$5.39 closing at $201.22 (Sovecon);
Sunflower seeds were at 37,475 rbls/t, down 75 rbls (Sovecon);
Domestic sunflower oil was at 88,500 rbls/t, up 325 rbls (Sovecon) – Export sunflower oil was at $1,380/t, unchanged from prior week (IKAR);
Soybeans were at 44,250 rbls/t down 300 rbls (Sovecon);
White sugar, Russia’s south was at $652.3/t, up $12.6 (IKAR).
($1 = 75.5375 roubles).
Meantime, the Russian AgMin assessed this week the profitability of wheat production in Russia at the end of 2021 decreased to 51.8% against 56.1% in 2020, excluding state support.
For other agricultural crops, the indicator is only growing with profitability of corn production increased from 48.4% to 51.2%, for #legumes – from 49.9% to 50.5%, for sunflower – from 80.2% to 95.4%, for soybeans – from 49.9% .4% to 77.7%, for sugarbeet – from 43.4% to 50.4%.
The indicator showed on wheat negative dynamics for the first time since 2017.
The reason for the decline in the profitability of wheat production: unfavorable weather conditions in a number of regions of Russia, which led to a drop in yields.
According to Elena Tyurina, the decline in the profitability of wheat production is due to the high export duties and the rising prices for all components of the cost of growing grain.
However, according to Eduard Zernin, a profitability above 50% is a good level, even if he doubt that we are talking about the profitability of the business.
Per latest data released by Rosstat, Russian gross grain harvest in 2021 amounted to 121.4 MMT in net weight, while in December it was estimated at 120.66 MMT.
The result is 9% lower than in 2020, when 133.5 MMT were harvested.
Corn is increased from December 14.6 MMT to 15.2 MMT.
Wheat increased from 75.9 MMT to 76 MMT.
Barley – from 17.98 MMT to 18 MMT.
Meantime, China will now allow imports of wheat and barley from all regions of Russia, under agreements signed during President Vladimir Putin’s visit to Beijing.
About this, AgMin annunced that a new railway terminal with 8 MMT PY capacity for exporting grain to China, will start operations in 2H 2022 in Zabaikalsk Region.
On the other hand, according to the Interfax news agency quoting an executive of state-controlled United Grain CompanyRussia’s, grain intervention fund plans to buy 1.2 million tonnes this year.
It reported no details such as how much wheat would be in the planned purchases.
Meanwhile, the Russian agriculture ministry has amended the export tax for wheat, barley and corn for the week of February 16-23, 2022, will be $92.8 on wheat, $74.1 on barley and $52.7 on corn.
Indicative prices will be $332.7 for wheat, $290.9 for barley and $260.3 for corn.
That is compared, with prior week (Feb 09-15) when the tax was $93.2 for wheat, $73.3 for barley and $52.7 for corn, while indicative price were $333.2 for wheat, $289.8 for barley and $260.4 for corn.
According to Svetlana Malysh, Balck Sea Agriculture Market Analyst from Refinitiv, “stiff competition with Ukrainian wheat and lack of demand from Turkish buyers undermined Russian wheat bids for coaster-size lots from Azov and returned prices to the October 2021 level.
Russian 13.5% protein wheat offers fell by $5-10 to $330-335 per tonne CIF Marmara over the week, but Ukrainian offers remained below the Russian ones.
Indeed, high wheat stocks amid a record 2021 crop and no export restrictions enable Ukrainian exporters to respond to the market changes quickly and adjust their prices accordingly.
Some hectic sales of Ukrainian wheat were done though on Russia-Ukraine tensions.”
The March-22 Black Sea wheat contract posted contract highs on the 23rd of November of USD$376/t – since then there has been potential war, speculation over subsequent export bans and general tightness in the export market.
It closed on Thursday at US$315.25/t.
Meantime, as of February 09, 2022, Ukraine wheat prices were at $300/t, down $7 from prior week.
Corn price was at $286 per tonne, down $1/t week on week.
Barley was valued at 299 $/t, down $3 from last week.
From the Middle Kingdom, China’s soymeal futures soared to record highs this week on concerns about the scale of South America’s drought-hit soybean crop and tightening meal supplies in domestic markets.
Elevated prices of soymeal, the top protein ingredient in animal feed, could lift production costs for Chinese hog farmers who are already struggling with huge losses, and may push some to exit the market, traders and analysts said.
Particularly, the most actively traded soymeal futures on the Dalian Commodity Exchange rallied to 3,792 yuan ($596.22) per tonne this week, the highest price on record, and up 13% from before the week-long Chinese New Year holiday.
In Shandong, a major processing hub in eastern China, cash prices of soymeal in the district jumped about 10% to more than 4,000 yuan per tonne this week because of tightening supplies after a protracted stretch of low crushing activity.
Meantime, farmers in Shandong, were losing 288 yuan with each pig raised this week.
“If soymeal prices remain high, it will increase farming costs, pushing more farmers – big and small – to further cut production capacity,” said Li Ming, analyst with the agriculture section of Mysteel, a China-based commodity consultancy.
China’s sow herd was 43.29 million head by end of December 2021, down 2.9% from the previous quarter, according to official data.
Soymeal prices rose more than 500 yuan per tonnes after Spring festival”.
“The end users can’t take this. Farmers can’t afford the losses any more, especially the smaller and medium ones, they had been losing since last year”.
($1 = 6.3601 Chinese yuan renminbi).
From Australia, accumulation of new-crop sorghum for export has seen its market lift by a few dollars this week, but feed barley and wheat prices have softened as domestic consumers settle into their ration mix for 2022.
As exports out of Victorian ports and Port Kembla in New South Wales hit maximum capacity, the focus on milling wheat, pulses and canola cargoes has reduced the exporter appetite in the near term for feed barley and downgraded wheat.
It means domestic consumers are getting a longer look at offers from growers and the trade, and SFW wheat appears to be increasing its share in domestic rations at the expense of barley.
In this context, indicative delivered prices in Australian dollars per tonne were:
Barley Downs: $288 down $2 from Feb 3;
SFW wheat Downs: $302, down $8 from Feb 3;
Sorghum Downs: $295, up $3 from Feb 3;
Barley Melbourne: $317, down $1 from Feb 3;
ASW wheat Melbourne: $368 down $7 from Feb 3.
SFW wheat Melbourne: $338 down $2 from Feb 3.
On the international trade scene, Japan purchased 117.000 t of food-quality wheat from the United States, Canada and Australia in a regular tender that closed Thursday.
Of the total, 47% was sourced from the U.S..
The grain is for shipment in June.
South Korea’s Major Feedmill Group (MFG) purchased around 68,000 tonnes of animal feed corn in an international tender which closed on Wednesday.
The corn was bought in one consignment at an estimated $341.89 a tonne c&f plus $1.75 a surcharge for additional port unloading.
Seller was said to be trading house Sierentz.
The tender had sought up to 140,000 tonnes but offers for a second consignment were rejected and no purchase made.
The consignment bought was sought for arrival in South Korea around May 18.
Shipment was sought between April 14 and May 3 if sourced from the U.S. Pacific Northwest coast, March 25-April 13 if sourced from the U.S. Gulf or Black Sea region/east Europe, March 20-April 8 from South America or March 30-April 18 if from South Africa.
Meantime, South Korean importer group KFA is believed to have rejected all offers and made no purchase in a separate tender on Wednesday to buy up to 68,000 tonnes of corn.
Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley.
The deadline for submission of price offers in the tender is Feb. 22.
A new announcement had been expected by traders after Jordan bought 60,000 tonnes in its previous tender for 120,000 tonnes of barley on Tuesday in which three trading houses participated.
Shipment in the new tender is sought in a series of possible combinations in 60,000 tonne consignments.
Possible shipment combinations are between July 16-31, Aug. 1-15, Aug. 16-31 and Sept. 1-15.
Turkish grain board TMO has started buying corn in an international tender on Tuesday, with about 275,000 tonnes believed to have been initially purchased.
The tender seeks about 325,000 tonnes of corn so more purchases are expected.
Shipment was sought between Feb. 25 and March 15 for unloading in a series of Turkish ports.
Both imports and supplies already in warehouses in Turkey could be offered in the tender.
Traders said they believed the following provisional purchases were made, with port of unloading, seller, tonnes sold, price in dollars a tonne c&f and whether the supplies are from Turkish warehouses:
Bandirma 25,000 Bek Tarim $307.70 warehouse;
Bandirma 25,000 Aston $315.15 warehouse;
Tekirdag 25,000 Erser $314.30 warehouse;
Samsun 25,000 Promaks $304.70 warehouse;
Karasu 25,000 Bek Tarim $304.70;
Derince 25,000 Yayla $311.50;
Derince 25,000 Rolweg $311.50;
Mersin 25,000 Erser $311.65;
Mersin 25,000 Yayla $311.65;
Izmir 25,000 ADM $309.59 warehouse;
Izmir 25,000 Yayla $309.60.
Jordan’s state grain buyer has purchased about 60,000 tonnes of animal feed barley to be sourced from optional origins in an international tender which closed on Tuesday.
It was bought at an estimated $301.25 a tonne c&f for shipment in the first half of July.
Seller was believed to be trading house Cargill.
Two other trading houses participated in the tender, Viterra which offered $319.00 a tonne c&f and CHS which offered $323.69 a tonne c&f.
Taiwan’s MFIG purchasing group bought about 65,000 tonnes of animal feed corn to expected to be sourced from Argentina in an international tender which closed on Thursday.
The corn was purchased at an estimated premium of 253.42 U.S. cents a bushel c&f over the Chicago July 2022 corn contract CN2.
Seller was believed to be trading house Viterra, they said.
Offers of corn from Argentina and the United States dominated the tender.
A total of five offers for Argentine corn were submitted in the tender including the winning price from Viterra, each of 65,000 tonnes.
Six offers for U.S. corn each of 65,000 tonnes were submitted.
The lowest U.S. price was believed to be a premium of 264.41 cents over the Chicago July 2022 corn contract from trading house Pan Ocean.
No offers were reported for Brazilian corn. One offer of 53,000 tonnes of South African corn was submitted at a premium of 275.50 cents over Chicago July by trading house Mitsui.
The tender sough shipment between April 1 and 20 if the corn is sourced from the U.S. Gulf, Brazil or Argentina, they said.
If sourced from the U.S. Pacific Northwest coast or South Africa, shipment was sought between April 16 and May 5.
Watching next week market, we start off with the USDA Export Inspections report on Monday morning.
Monday is also the expiration of the February lean hog futures and options.
Weekly EIA data will be released on Wednesday morning.
USDA will release the weekly Export Sales report on Thursday morning.
Friday is the final day for March grain options.
To all of you I wish you a good weekend
Author: Sandro F. Puglisi