Good afternoon Farmer Family …
US farm markets were lightly mixed on Friday, but during the week, of course, they have been schooling some folks.
August can still be a time of very volatility and uncertainty about crop production and if you trade the news, or the weather forecasts, instead facts, you often lose …!
“Last year taught us that crops can survive (and even thrive) on minimal, just-in-time rains,” a StoneX analyst said.
Thus, corn prices ended the Friday session with a 1.33% gain.
However, were down a net 0.97% for the week.
Beans went home fractionally higher, with Sep posting a 0.14% gain.
Soymeal prices ended the day double digits weaker with 3.53% losses.
Bean oil prices rallied 4.08% on the day.
For the week, soybeans gave up 1.6%.
Product values fell back as well, with meal down 1.1% and soy oil down 2.3% for the week.
The wheat complex drifted lower into the weekend.
Chicago SRW contracts closed with 0.86% losses.
Kansas City HRW went home 1.39% lower.
Minneapolis spring wheat prices closed down by 0.87% on the day.
During the week prices continued back and forth action, however, the week’s balance was negative.
Chicago SRW, indeed, was down 4% for the week.
Kansas City HRW was down 3%.
Spring wheat shed 2.2%.
U.S. soybean prices fell on Friday for the fourth session of the last five, pressured by forecasts for spotty Midwest rains that could boost the health of it crop as it passes through key development periods.
Indeed, though hot, dry temperatures prevailed in many areas, conditions varied across grain-growing regions this week.
Rain in the Texas Panhandle and northern Oklahoma eased drought conditions with above-normal temperatures continuing in the region.
Colorado and western Kansas experienced heavy rain this week related to monsoon activity, making minor improvements to drought conditions.
The rest of Kansas, southeast Colorado, central and southern Nebraska, southern South Dakota, and North Dakota experienced dry weather and temperatures 2 to 4 degrees above average, worsening moisture deficits.
A heat wave developed in the Pacific Northwest, pushing temperatures well above average in Washington and Oregon.
Most of the central U.S. will at least see some measurable moisture between today and Monday, with large parts of Minnesota and Wisconsin likely to gather another 1.5” or more during this time.
However, the agency’s new 8-to-14-day outlook predicts below-average precipitation and above-average temperatures for the Corn Belt between August 12 and August 18, meantime.
In this context, IHS Markit Agribusiness forecast 2022 soybean production of 4.530 billion bushels, with an average yield of 51.8 bushels per acre.
Both the yield and production forecasts were bigger than the U.S. Agriculture Department’s July estimates.
Meantime, the firm reduced their outlook for the US national corn yield from 179.5 to 176.9 bpa.
Consequentially corn prices firmed a bit on technical buying while wheat slipped, hitting a six-month low earlier this week.
Traders, indeed, monitored the progress of exports from Black Sea ports.
Three ships carrying a total of 58,041 tonnes of corn have been authorised to leave Ukrainian ports on Friday, while the first Ukrainian grain vessel to leave the Black Sea, passed through the Bosporus on Aug. 3 carrying 27,000 MT of corn bound for Lebanon.
The first inbound vessel cleared inspection and is expected to arrive in Ukraine on Saturday.
According Ukraine’s first deputy minister of agriculture, Ukraine could start exporting wheat from this year’s harvest from its sea ports in September under the landmark deal brokered by Turkey and the United Nations.
Signs of renewed import demand this week helped limit losses.
On this wake, on Friday private exporters reported to the USDA the sale of 132,000 tonnes of soybeans to China and 132,000 tonnes of soybeans to unknown destinations.
These sales had been rumored on Thursday morning.
Going inside the numbers, during the week, corn prices, closed down $0.06 at $6.10/bu.
Soybean prices finished the week $0.240 weaker at 14.63/bu.
Soymeal lost $4.9/smt, closing at $437.50 smt.
Soy oil, shedded $1.5, to close at $65.00.
CBOT soft red winter (SRW) prices fell $0.320 to close at $7.76/bu.
KCBT hard red winter (HRW) prices was $0.262 weaker, ending at $8.48/bu.
MGE hard red spring (HRS) prices eased $0.195 to close at $8.87/bu.
Meantime, corn basis bids were steady to soft after weakening 5 to 15 cents across five Midwestern locations on Friday.
Soybean basis bids were largely steady but did show some significant variability across a handful of locations, moving as much as 15 cents higher at an Illinois river terminal and as much as 20 cents lower at an Indiana elevator.
As for wheat, basis was mixed in in both the Gulf and Pacific Northwest (PNW) this week.
In the Gulf, HRS basis was down while HRW was flat and SRW remains firm.
Out of the PNW, HRS was flat and HRW was up, while Soft White was down.
Demand for HRS remains sluggish as many buyers look ahead to harvest.
Slow movement of HRW from the country elevators to the export market kept Gulf HRW quiet this week. Increased export business out of the PNW firmed basis, though a progressing Soft White harvest has placed downward pressure on prices.
The first durum fields are being harvested in Montana where the crop is 5% harvested, 95% headed and 39% turning color.
In North Dakota, recent heat has accelerated growth, but the crop is still behind average with 93% headed and 17% turned color.
USDA conditions for the Northern Durum crop remain very high with North Dakota rated 84% good to excellent.
Montana ratings increased slightly to 51%.
Hot, humid conditions have increased disease and insect pressures with producers managing.
There is little chance of rain, and continued heat across the region is expected to accelerate crop maturity.
In this context, as of Aug 4, 2022, FOB prices saw US wheat No 2 Hard Red Winter (HRW) valued at $377/mt (down $12/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was at $330/mt (down $11/mt from last week).
Northern Durum offers from the Great Lakes for September 2022 delivery was quoted at $14.15/bu, unchanged week on week ($520.00/MT).
As for corn, US corn 3YC (Gulf) was at $294/mt (down $15/mt from last week).
As for soybean, US soybean 2Y (Gulf) quoted at $607/mt (down $39/mt from last week).
USDA saw crude corn oil near 62c/lb this week, compared to 63 cents last week and 64c/lb during the same week last year.
The B100 cash price for the week was seen as $6.60/gal in Iowa/Minnesota and $6.65 in IL/IN/OH.
Last week’s quotes were $6.42/gal in IA and $6.65/gal in the ECB.
Meantime, Weekly CFTC data showed managed money spec funds were buying corn through the week that ended 8/2.
The 6.3k new longs and 2.8k fewer shorts left the spec funds 129,921 contracts net long.
Commercials were also adding 4k new hedges through the week, taking their net short to 362,067 contracts.
As for soybean, the report had the managed money group at 99,471 contracts net long as of 8/2.
That was a weekly 11,795 contract bull swing via 6k spec rotation from open shorts to new longs.
Commercial soybean traders closed 7.7k long hedges for a 149,443 contract net short.
In the products, CFTC reported the funds were 6.6k contracts more net long to 80,018 for meal and 7.2k contracts more net long to 22,141 in soy oil.
As for wheat, the report showed the managed money spec funds were getting more bearish in CBT wheat, as they were extending their net short in SRW through the week that ended 8/2.
Particularly, managed money opened 9.2k new shorts through the week and opened 4.7k new longs, for a net 14,970 contract short position as a group.
In KC wheat, the CoT report showed managed money firms were 9,992 contracts net long, reducing the position by 1,049 contracts.
That was their smallest net long in that market since September 2020. .
Spring wheat spec traders were closing more longs than shorts through the week of 8/2, and flipped net short for the first time since 10/13 of 2020.
Their net short was reported at 652 contracts.
In energy markets, oil prices settled higher on Friday, recouping some of this week’s losses on strong U.S. job growth data, but closed the week at their lowest levels since February, rattled by worries a recession could hit fuel demand.
Brent crude, indeed, settled up 80 cents to $94.92 a barrel, but 11% off last Friday’s settlement.
U.S. West Texas Intermediate crude settled up 47 cents to $89.01, but off 8% in the week.
Oil traders this week have fretted about inflation, economic growth and demand, but signs of tight supply kept a floor under prices.
Supply concerns, indeed, are expected to ratchet up closer to winter, with European Union sanctions banning seaborne imports of Russian crude and oil products set to take effect on Dec. 5.
The OPEC+ producer group agreed this week to raise its oil output goal by 100,000 barrels per day (bpd) in September.
Meantime, the number of oil rigs, an early indicator of future output, fell seven to 598 in the week to Aug. 5, the first weekly decline in 10 weeks.
In freight markets, the Baltic Exchange’s main sea freight index dipped to a near 6-month trough on Friday and registered its worst week in more than two months on weakness across vessel segments.
The overall index, which factors in rates for capesize, panamax, and supramax shipping vessels, indeed, was down 43 points, or 2.7%, at 1,560 points, its lowest since Feb. 8.
The main index fell 17.7% for the week, its third consecutive decline.
Particularly, the capesize index lost 69 points, or 4.7%, at 1,411 points, its lowest since April 20. It shed about 32% on the week.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down $571 to $11,700.
The panamax index was down 16 points, or 0.81%, at 1,967 points, its lowest since July 19. It lost 4.1% in the week.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $150 to $17,699.
The supramax index fell 47 points to 1,700 points, its lowest since Feb. 7. It shed 13.7% in its worst weekly decline since Nov. 5.
In equity markets, U.S. stock indexes on Friday settled mixed.
They were under pressure as U.S. July nonfarm payrolls rose +528,000, stronger than expectations of +250,000 and the biggest increase in 5 months.
The July unemployment rate fell -0.1 to 3.5%, matching a five-decade low and showing a stronger labor market than expectations of no change at 3.6%.
U.S. July average hourly earnings rose +0.5% m/m and +5.2% y/y, stronger than expectations of +0.3% m/m and +4.9% y/y.
U.S. June consumer credit rose +$40.154 billion, stronger than expectations of +$27.000 billion.
That, on the one hand, bolstered the outlook for the Fed to raise interest rates by another +75 bp at the September FOMC meeting, pushing up the T-note yields.
Particularly, the two-year Treasury yield, which tends to track expectations for Fed action, jumped to 3.23% from 3.05% late Thursday. The 10-year yield, which influences rates on mortgages, rose to 2.84% from 2.69%.
In the meantime, that also eased recession fears and sparked a rally in bank stocks, supporting the overall market and kept the Dow Jones Industrials in positive territory.
Also, solar stocks jumped Friday after Barclays upgraded the sector, saying the sector “is as attractive as it’s ever been.”
In addition, strength in energy stocks Friday was a bullish factor for the overall market as crude prices rose more than +0.5%.
Fresh tensions with China, in contrast, weighed on U.S. stocks.
Thus, the end week session, was a roller-coaster day.
The benchmark S&P 500 ultimately ended just 0.2% lower, slipping 6.75 points and closing at 4,145.19 after recovered from the early slide.
Stocks of technology and other high-growth companies once again took the brunt of the selling amid the rising-rate worries.
Consequentially, the tech-heavy Nasdaq composite cut its early losses but still closed down 63.03 points, or 0.5%, at 12,657.55.
The Dow Jones Industrial Average, whose stocks tend to move more with expectations for the overall economy, added 76.65 points, or 0.2%, to close at 32,803.47.
Smaller company stocks also weathered the turbulent trading to notch gains.
The Russell 2000 index, indeed, rose 15.37 points, or 0.8%, to close at 1,921.82.
For the week, the S&P 500 rose 0.4%, the Dow fell 0.1% and the Nasdaq added 2.2%.
In currency trading, the dollar rallied across the board on Friday, notching its biggest daily percentage gain since mid-June against the yen.
The U.S. dollar index , which measures the greenback against a basket of currencies, indeed, sharply extended gains following the U.S. July nonfarm payrolls report, posting the largest gain since February.
Particularly, the dollar index, which remains below its mid-July high, was last up 0.8% at 106.57.
It was up about 0.2% just before the release of the U.S. Labor Department’s employment report.
The index was up about 0.6% for the week.
The dollar is stronger against almost everything.
Against the yen, the dollar was last up 1.5% at 134.99 yen.
For the week, the dollar was up 1.3% against the yen.
Sterling was down 0.8% against the dollar at $1.2066, a day after the Bank of England (BoE) raised rates by the most in 27 years.
The euro was down 0.7% against the greenback at $1.0178.
The dollar index is up more than 11% for the year so far amid the outlook for higher rates.
In Canada, harvest has just begun in the province of Saskatchewan.
These few fields are mainly in west central and southwest regions where crops are further ahead in development.
Parts of these regions received rainfall and this has delayed further harvest activities such as combining and desiccating.
In the eastern regions harvest is at least seven-10 days away, since crops are behind in development and in some areas are just now beginning to fill with seed, although some earlier seeded crops are close to being ready for desiccation.
Rainfall varied significantly across the province last week with some areas getting nothing and others experiencing large, localized storms that resulted in flooding and crop damage.
The Unity area received 53 mm, the Briercrest area 49 mm, the Avonlea area 40 mm, the Mayfair area 37 mm, the Lake Lenore area 24 mm, the Bulyea area 17 mm and the Swift Current area 9 mm.
Cropland topsoil moisture is rated as four per cent surplus, 64 per cent adequate, 25 per cent short and seven per cent very short.
Hay and pasture land topsoil moisture is rated as two per cent surplus, 65 per cent adequate, 20 per cent short and 13 per cent very short.
Pasture conditions are rated as 16 per cent excellent, 41 per cent good, 25 per cent fair, 12 per cent poor and 6 per cent very poor.
The Manitoba Agri-Food and Rural Development division crop report from w/e 2 August said 2022/23 spring wheat fields have completed flowering and kernel development is underway.
The majority of the later seeded wheat has finished flowering.
The spring wheat crop is rated mostly (around 55%) from good to excellent, with some exceptions due to extreme moisture.
Fusarium head blight fungicide application in spring wheat is complete.
Armyworm damage on cereals has been discovered in the Beausejour area, control is underway as needed on specific fields where careful scouting was required.
Higher wheat midge counts were observed in the Roblin areas.
Barley crops range from flowering to head filling (milky dough) stages, with malt crops most advanced, and greenfeed or very late-seeded fields further behind.
Oat crops have finished flowering and are becoming heavier with grain fill developing.
Fall rye is turning colour and is at the hard dough stage, leaves have dropped off and stems are browning.
Winter wheat has mostly reached the hard dough stage, the crop is starting to turn colour.
Pre-harvest aid application could start this week in the Eastern region.
Canola crop conditions were variable, broadly estimated at 75pc good-to-excellent.
Meantime, as of August 02, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $460.60 per tonne, down C$4.26/t from prior week;
– for the N2 class CWRS 13.0% – $453.51/t, down C$4.25 wow;
– for the N3 CWRS – $458.24/t, up C$2.37 from prior week.
As of August 02, 2022, for the N1 CWAD 13% (durum wheat first class) deferred average street prices for delivery in Sep ’22 were at C$408.59 up C$8.82 week on week.
Export basis West Coast & Central SK also moved up from C$ 256.60 to 260.55 a tonne.
Thus, delivered FOB price Great Lakes was posted at C$669.15, up C$12.77 from prior week.
Per latest data from European Commission, as of August 03, 2022, Durum wheat – CA St Lawrence (CWAD) was offerd at C$667.58/t, down C$67.42 from $742.67/t a week earlier.
As of August 05, 2022, for the N1 CWAD 13% (durum wheat first class), average street prices in REGIONAL ZONES were at C$439.94 per tonne, down C$3.73 from prior week.
(1USD=Cnd$1.2838, up from 1.2794 a week earlier).
From South America, Argentina’s BAGE reported corn harvest reached 81.4% complete as of 8/4.
Argentina’s 2022/2023 wheat crop got a much needed boost last week when rains eased drought conditions afflicting key agricultural areas, the Buenos Aires Exchange said on Thursday.
Persistently dry conditions in recent months have pushed the exchange to cut its estimate for the country’s planted wheat area five times, down to 6.1 million hectares (15 million acres) from the 6.6 million hectares initially expected in May.
Last week’s rain over Argentina’s central and southern agricultural areas slowed the deterioration of wheat plants that have already begun growing, while promoting the growth of plants “that presented delays due to the lack of humidity and low temperatures,” the exchange said in its weekly report.
The exchange, however, warned that the panorama for farmers is still a concerning one.
Meantime, as of August 4, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $410, unchanged from prior week.
Argentina corn feed was down $4/t for the week, closing at $274.
Brazilian corn feed (Paranagua) was valued at $284, up $1 from prior week.
Argentina feed barley, was unchanged for the week to $340.
Argentina soybean was down $21 at $607.
Brazilian soybean lost $9 finishing the week at $621.
In Europe, August loadings in France were seen exceeding an exceptionally busy July programme of around 1 million tonnes.
In Germany, August loadings were starting with a vessel this week taking 30,000 tonnes of wheat for Guinea and another next week set to load about 60,000 tonnes for an undisclosed destination.
Sellers of standard 12% protein wheat for September delivery in Hamburg were offering around 33 euros a tonne over the Euronext December, with buyers seeking about 30 euros over.
Falling Rhine water levels in hot, dry weather has increased costs for grain transport.
Prices for river shipping have more than tripled since June.
In France, the farm ministry raised by 1 million tonnes its estimate of the soft wheat harvest to 33.9 million tonnes, although this was still below last year’s crop.
The new figure was broadly in line with market expectations after strong yields in northern zones offset drought-hit results in the south.
Also, France’s Ag Ministry estimated the corn crop at 12.66 MMT, down 19% from last year’s crop citing dryness.
FranceAgriMer reported 63% of the crop was good/very good.
In this context, September wheat price, on Euronext closed the week at €342.5 per tonne, down €0.5/t from past week.
November corn price, was €1/t weaker for the week, closing at 327.25 euros per ton.
Rapeseed Nov contract closed at €653.25/t, down €36.5/t for the week.
Nov-22 UK wheat feed contract, closed at £268/t, down £2/t week on week.
Meantime, as of August 4, 2022, FOB prices in US dollar for French wheat with 11.5% protein and Sep delivery, were at $354/mt, down $3 from prior week.
German wheat Deposilo Hamburg, was not quoted.
Baltic wheat, delivery first Vilnius, quoted $332.95, down $61.78 from prior week.
French durum wheat – delivered La Pallice Spot – July 2022 basis, was at $448/mt, down $7.06 from prior week.
Spanish durum wheat Sevilla (Depo Silo), was valued this week at $498.92 per tonne, down $12.38 wow.
Italian durum wheat Bologna (Delivered to first customer), was valued this week at $509.1 per tonne, up $2.91/t week on week.
Corn, delivered Bordeaux Spot – July 2022 basis, was at $338.04 per tonne, down $14.76/t from past week.
Corn FOB Rhin Spot – July 2022 basis, was down $9.62 to $330.91/t.
Feed barley delivered Rouen was at 305.46$/t, down $1.32 per tonne.
Malting barley FOB Creil Spot – July 2022 basis was at $386.92 per tonne, up $10.6/t from prior week.
Rapessed FOB Moselle – 2022 harvest was at 659.79$/ton, down $33.53 compared to prior week.
Standard sunseed FOB Bordeaux – 2022 harvest was down 110.63$ from prior week at $753.47 per tonne
(Eur/USD = 1.0182 vs last week 1.0226).
From the Black Sea basin, Russian President Vladimir Putin and Turkish President Tayyip Erdogan agreed on Friday to boost cooperation in the transport, agriculture, finance and construction industries, they said in a joint statement after a four-hour meeting.
In the statement, Putin and Erdogan stressed the need for “the full implementation of the Istanbul agreement, including the unimpeded export of Russia’s grain, fertiliser and raw materials for their production.”
The Kremlin said on Thursday the deal to unblock Ukraine’s grain exports from the Black Sea was not a “one-time mechanism,” and that it hoped it would continue to work effectively.
The two leaders also agreed to switch part of the payments for Russian gas to roubles, Russian Deputy Prime Minister Alexander Novak told reporters after the talks.
Meantime, three ships loaded with grain left Ukrainian ports on Friday under the safe passage deal.
Particularly, two grain ships set off from Chornomorsk and one from Odesa, with a total of about 58,000 tonnes of corn.
The Panama-flagged Navistar, carrying 33,000 tonnes of corn bound for Ireland, departed from Odesa.
The Maltese-flagged Rojen, carrying 13,000 tonnes of corn, departed from Chornomorsk port bound for Britain.
The Turkish-flagged ship Polarnet, carrying 12,000 tonnes of corn, set off from Chornomorsk for the Turkish Black Sea port of Karasu.
Meantime, the Turkish bulk carrier Osprey S, flying the flag of Liberia, was expected to arrive in Ukraine’s Chornomorsk port.
It would be the first ship to arrive at a Ukrainian port during the war.
Ukraine has called for the grain deal to be extended to include other products, such as metals.
Ukrainian farmers have threshed 17.5 million tonnes of the 2022 grain harvest so far with the average yield of 3.64 tonnes per hectare, Ukrainian grain traders union UGA said on Friday.
The union’s statement said the volume included 12.6 million tonnes of wheat with an average yield of 3.6 tonnes per hectare and 4.4 million tonnes of barley with a yield of 3.38 tonnes per hectare.
The UGA said that farmers also harvested 2.5 million tonnes of rapeseed with a yield of 2.68 tonnes per hectare.
The ministry said farmers had harvested 4.8 million hectares of grain and the area included 3.5 million hectares of wheat, 1.3 million hectares of barley and 101,000 hectares of peas.
It also said Ukraine’s southern Odesa and Mykolaiv regions had almost completed the 2022 wheat harvest.
From Russia, the Ag Ministry reported 51 MMT of grain was reaped through 8/2.
Cereals and leguminous crop harvested from 11.9 MHA area, including 43.9 MMT of wheat harvested from 9.9 MHA.
However, recent rains in several regions of Russia have hit the quality of winter wheat, although improved the set-up for spring wheat.
More rains arrived during the week.
Winter wheat, sown in autumn for harvesting in summer, typically accounts for 70% of Russia’s crop.
It brings a higher yield than the spring planted crop and is less vulnerable to adverse weather.
In this context, Russia will downgrade its forecast for grain exports in the 2022/23 July-June season from the current 50 million tonnes if its harvest fails to reach the target of 130 million tonnes, the agriculture ministry said on Friday.
The pace of crop harvesting in Russia, is currently slower than the ministry expected due to a cold spring leading to a late start, as well as rain and a lack of spare parts for foreign agricultural equipment, it said.
Meantime, suppliers offered Russian wheat at lower prices this week in Asia, but most millers were unwilling to sign deals in the face of economic sanctions against Moscow, Singapore-based traders said.
Russian wheat with 11.5% protein was offered around $405-$410 a tonne, including cost and freight (C&F), to Southeast Asia, they said.
“Russian crop looks good and prices are very attractive, but buyers are not willing to take chances with Russian supplies as cargoes might get into trouble, even though food is not under sanctions.”
On domestic side, consumer prices declined for the fourth week running, data showed on Wednesday, as the rouble’s appreciation in the past few months and a drop in consumer demand weighed on the pace of price growth.
The consumer prices index (CPI), indeed, dipped 0.14% in the week to Aug. 1 after easing 0.08% a week earlier, the federal statistics service Rosstat said.
The CPI extended its fall even after the central bank slashed its key rate by 150 basis points to 8% last month and indicated it was ready to consider further monetary easing to limit the depth of economic recession.
In a separate set of data, the economy ministry said annual consumer inflation remained steady at 15.30% as of Aug. 1, the same level seen a week earlier.
Inflation remains high but is slowing after prices of nearly everything, from vegetables and sugar to clothes and smartphones, have jumped sharply since started war.
So far this year, consumer prices have risen 11.16% compared with a 4.69% increase in the same period of 2021, Rosstat data showed.
Meantime, on Friday Russia has set out its grain export taxes for Aug 10 – 16.
According to the agriculture ministry the export duty will increase for all products wheat, barley and corn.
Particularly, for wheat will move to 5,219.6 roubles/tonne, from 4,626.8 roubles/tonne of a week earlier.
For barley, will be 3,504.9 roubles/tonne, from 2,945.4 roubles/tonne the prior week.
For corn, the tax will move up to 3,802.8 roubles/tonne, from 3,311.4 roubles/tonne the previus period.
As for indicative price, for wheat will be 369.4 $/tonne, for barley 310.6 $/tonne, and for corn 317.6 $/tonne.
That is compared with 379.9 $/tonne for wheat, 311.2 $/tonne for barley, and 320.2 $/tonne for corn of a week earlier.
From the Middle Kingdom, China is on track to be the leading international buyer of U.S. agricultural products for a third consecutive year, as the total value of US exported goods reached record levels in the first half of 2022.
Data published by the U.S. Census Bureau Thursday, indeed, showed U.S. agricultural and related product exports to China reached $17.5 billion between January and June, up 15% from last year’s record for the period.
Soybeans accounted for 29% of this year’s value of exports to China, corn 18%, cotton 11% and sorghum 9%.
The exported cost of U.S. corn to China in H1 2022 was 21% higher than in H1 last year, soybeans 23% higher and cotton 34% higher.
The 9.7 million tonnes of U.S. corn shipped to China in H1 2022 is down 24% from last year, though it would have been by far a full-year record in any other year.
H1 soy exports at 8.8 million tonnes were up 15% on the year and cotton shipments of 800,000 tonnes were up a whopping 71%.
However, for the current 2021-22 marketing year that began Sept. 1, through June, corn and soybean shipments to China from USA were down 33% and 20%, respectively.
Cotton shipments were down 10% between August 2021 and June 2022.
U.S. pork shipments to China in H1 2022 plunged 53% on the year to 460,300 tonnes.
By contrast, China increased U.S. beef import, as H1 2022 exports by volume surged 49% from H1 2021. U.S. beef and beef product exports to China in H1 of 120,500 tonnes, amassing over $1 billion in value, the fifth largest item of the year behind soybeans, corn, cotton and sorghum.
That makes China the third largest destination for U.S. beef so far in 2022 behind Japan and South Korea.
Meantime, China will again auction off another 500.000t of its state soybean reserves on August 12.
The country has routinely offered similarly sized auctions throughout 2022 in an attempt to boost local supplies and quell high prices.
From South East Asia, flour millers in India have asked the government to scrap a 40pc import duty on wheat to soften local prices that have jumped 12-16pc in the past fortnight, according to Anjani Agarwal, president of the Rollers Flour Millers’ Federation of India.
Malaysian palm oil futures jumped more than 2% on Friday tracking Chicago soyoil, but the contract logged its first weekly loss in three on expectations of rising supplies.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange, indeed, gained 79 ringgit, or 2.07%, to 3,900 ringgit ($875.62) a tonne.
For the week, the contract fell 9.6%.
Malaysia’s palm oil inventories at end-July likely jumped to an eight-month high due to improving production and soaring imports.
But production worries due to workers shortages are raising concerns about the quality of the processed crude palm oil and yields are on the decline.
Exports from Malaysia during Aug. 1-5 rose 24.5% from the same week in July.
Traders are expecting higher overseas shipments from Indonesia after the country lowered its crude palm oil export duty reference price for Aug. 1-15, making its products more competitive than Malaysian palm oil.
($1 = 4.4540 ringgit)
In Australia, minimal grower selling combined with consumer hopes for softer values have kept traded volume to a minimum in the domestic market this week.
In southern Queensland, fine weather has allowed consumers to catch up on deliveries, while rain in Victoria and New South Wales is slowing grain movement.
Consumers generally are seen as well covered in the closing months of the current crop year, and confident that volume will be available once harvest rolls around.
Meantime, liquidity in the local market continues to be lacklustre and buying demand is steady across the commodities.
On the weather side, in the past week, many crops in Western and South Australia and Victoria received welcome rain, while in parts of NSW, concerns grow in some districts about waterlogging.
Rainfall totals of 10-50mm were recorded this week across most of southern WA.
Lower totals of 5-25mm fell across Vic and cropping regions of SA, and NSW.
A widespread rain band pushed across NSW on Thursday with 15-50mm forecast for most cropping regions.
It moved up through northeast NSW yesterday into southern Qld with the heavier totals in NSW.
A relatively dry weekend is forecast for all states.
In this context, indicative delivered prices in Australian dollars per tonne this week were:
Barley Downs: $390 unchanged from July 28;
SFW wheat Downs: $410, unchanged from July 28;
Sorghum Downs: $350, up $5 from July 28;
Barley Melbourne: $390, unchanged from July 28;
ASW wheat Melbourne: $418 down $2 from July 28.
SFW wheat Melbourne: $408 down $2 from July 28.
(AUD/USD=> US$0.6913 vs. US$0. 6987 past week).
On the international trade scene, the Philippines is believed to have rejected all offers and made no purchase in a tender to purchase for up to 150,000 tonnes of wheat and 150,000 tonnes of animal feed barley, with prices regarded as too high.
The country may wait to see if an uptick in Ukrainian exports will help prices fall.
The tender had sought shipments of various sizes each month in October, November and December 2022 and in January 2023.
Watching next week’s market, we’ll get the weekly Export Inspections report on Monday in the afternoon and Crop Progress overnight after the session close.
The weekly EIA ethanol numbers will be out on Wednesday.
Thursday is the weekly Export Sales report day in the US.
Friday marks the last trading day for August soybeans, meal and bean oil.
Not to be overlooked will be the first NASS Crop Production estimates for corn and soybeans, along with the monthly WASDE supply/demand updates.
That’s all, thank you.
To all of you, we wish you a good weekend and … Good Harvest 2022!
Author: Sandro F. Puglisi