Good morning Farmer Family …
It should be noted that starting this week, we no longer examine contracts expiring in December.
US farm markets were mixed but mostly lower on Friday.
Corn prices faded 2.16% lower.
Soybeans showed some upside recovering a portion of the steep losses incurred on Thursday, as closed 0.61% higher at the bell.
Meal stayed up 0.59% at the end of the session.
Soybean oil closed down another 3.21% in the end week session.
Wheat losses were variable, but still double digit.
Notabily, Chicago SRW ended the day 2.81% lower.
Kansas City HRW dropped 2.19% on the day.
Minneapolis HRS closed Friday 1.79% lower.
For the week, corn prices had a late week collapse that sent March down 3.72% week over week.
Soybeans had a strong start to the week that, joining with Friday’s gains, helped to offset a collapse on Thursday, pushing January contract up 0.16% on the week.
Meal rallied 4.38% in the Jan contract.
Soybean oil has been the weak spot of the complex, with a 9.05% weekly loss.
Wheat headed lower across the complex on the week.
Chicago were down 4.52% since last Friday
Kansas tumbled 4.53% over the week.
Minneapolis spring wheat was down 2.97%.
Notabily, corn prices closed the week $0.250 weaker at $6.46/bu.
Soybean prices finished $0.022 stronger at 14.39/bu.
Soymeal rose $17.8/smt, closing at $424.10 smt.
Soy oil tumbled $6.490, to close at $65.22.
CBOT soft red winter (SRW) prices fell $0.360 for the week to close at $7.61/bu.
KCBT hard red winter (HRW) prices lost $0.413, ending at $8.71/bu.
MGE hard red spring (HRS) prices were $0.282 weaker to close at $9.21/bu.
Corn prices mainly dipped over concerns about export demand for U.S. supplies.
The United States is considering legal action against Mexico amid its plans to ban all GMO corn imports by 2024.
This move would be a violation of the USMCA trade pact, according to Secretary of Agriculture Tom Vilsack.
Also, in Brazil analysts are forecasting the country will produce a record of crop corn in 2022/23.
Due to “system outages,” USDA has not published regularly its latest crop progress report, which was originally scheduled to be released on Monday night.
Analysts were expecting to see winter wheat quality ratings improve a point, with 33% of the crop in good-to-excellent condition.
Individual trade guesses ranged between 32% and 35%.
The USDA, on Tuesday rated 34% of U.S. winter wheat in good to excellent condition, up 2 percentage points from the previous week and a bigger improvement than most analysts had expected.
However, it should to note, the USDA’s figure, is down from 44% a year ago, and is the lowest rating for this time of year since late November of 2012.
Also, dry conditions continued to be the main concern.
About 75% of the U.S. winter wheat production area, indeed, was experiencing drought as of Nov. 22, according to the government.
The next crop rating will not be published until the beginning of April as crops are going dormant.
On Wedsnaday, the EIA reported 1.108m barrels of ethanol were produced daily during the week that ended 11/25.
That was down 23k barrels per day from the week prior.
However, ethanol stocks were 105k barrels higher at 22.934 million, reaching a 25-week high.
Very weak US export news on Thursday added more pressure on prices.
Notabily, the U.S. Agriculture Department (USDA) said export sales of wheat totalled 162,500 tonnes in the week ended Nov. 24, well below the low end of analysts’ forecasts that ranged from 300,000 to 725,000 tonnes.
Algeria was the top buyer with 58.3k MT.
Week’s export shipments were 271,230 MT for a season total of 9.495 MMT.
That is below last year by 3.4% and is broken out with 2.8 MMT of HRW, 2.77 MMT of HRS, 2.146 MMT of white, 1.68 MMT of SRW and 96.5k MT of durum.
The USDA reported weekly corn export sales of 632,700 tonnes.
The market had expected 475,000 tonnes to 1.1 million tonnes.
That was down from 1.85 MMT the week prior and was 59% of the sale made during the same week last year.
Mexico was the week’s top buyer with 387k MT, and they also booked 30k MT for new crop.
Mexico and China were the top destinations for the week’s 344k MT of exports.
Accumulated shipments sat at 5.773 MMT (227 mbu) as of 11/24.
As for soybean, USDA confirmed Weekly Export Sales at 693,838 MT.
Analysts were expecting to see at least 550k MT.
China was the top buyer, with 110k MT previously announced.
China was also the destination for over half (71%) of the week’s export shipments, which totaled 2.1 MMT to all destinations.
The accumulated soybean export reached 19 MMT through 11/24.
As for products, FAS data had soymeal sales at 185k MT, compared to 516k MT last week and 150 – 500k MT expected.
Accumulated soymeal exports were 1.494 MMT through 11/24, trailing last year by 19.3%.
For bean oil the weekly report showed 2,306 MT of net cancelations, compared to pre-report estimates of 0-20k MT.
Soy oil exports were at 11,474 MT for the season through 11/24 – trailing last year by 78%.
However, corn, beans and soybean oil, got a most pressure, after some disappointing biodiesel blending recommendations were released by EPA, this week.
The U.S. Environmental Protection Agency, indeed, boosted required biofuel use to 20.82b gallons of renewable fuels for 2023, of which 5.82 billion would be advanced biofuels (mostly from soy oil).
The prior requirement was 20.63b gallons, so the 2023 number is just a ~1% increase.
That suggests around 15b gallons of ethanol will be required under the new quotas in 2023, with a very small increase by 2025.
Ultmately, the USDA released this week their’s monthly Grain Crushing and Fat & Oil reports.
Notabily, data showed 448.895 mbu of corn was used for ethanol during October.
That was up 17% from September’s pull, but down 4% yr/yr.
With that, 1.745m tons of DDGS were produced, and 186,770 tons of corn oil – a 3-mo high.
NASS also confirmed 196.64 mbu of soybeans were processed during October.
That was above the average of pre-report estimates (195.9), was up 17.33% from September, and was just 0.8% below the all time record.
Soybean oil stocks, however, were 2.094b lbs, near what trade looking for 2.107b ahead of the report.
On Friday, the wheat complex extended losses to a fresh three-month low as modest weekly U.S. exports kept traders’ focus on competition from cheaper Black Sea supplies.
Wheat prices fell even as Canada’s all-wheat crop turned out smaller than expected due to dry conditions, Statistics Canada reported (read more below).
Corn also fell, while soybeans rebounded, consolidating after the selloff in the previous session.
Soybeans and wider commodity markets had been underpinned in recent sessions by signs China was softening COVID-19 rules after rare public protests in the world’s second-largest economy.
In this context, on Friday corn basis bids slid 2 to 5 cents lower at three Midwestern ethanol plants while holding steady elsewhere across the central U.S..
Soybean basis bids were mostly steady across the central U.S., but did sink 10 cents lower at an Iowa processor and 10 cents at an Iowa river terminal.
Gulf HRS basis found considerable support this week as rail performance deteriorated in anticipation of the rail strike and demand from the US milling industry remained strong.
HRW out of the Gulf softened marginally.
As wheat futures decrease, many farmers may wait until after the new year to make any new sales.
According to one trader, inverted markets continue to create variability in the HRW basis.
Meanwhile in the PNW, HRW and HRS basis held strong due to domestic demand, despite low farmer engagement and sluggish export demand.
Soft white wheat prices dropped in search of support.
As a results, as at December 01, 2022, FOB prices saw US wheat No 2 Hard Red Winter (HRW) valued at $405/mt (down $10/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was valued at $341/mt (down $9/mt from last week).
Northern Durum offers from the Great Lakes for January 2023 delivery, were at $11.84/bu, ($435.00/MT), past week were not available.
As for corn, US corn 3YC (Gulf) was at $313/mt (down $13/mt from last week).
As for soybean, US soybean 2Y (Gulf) quoted at $579/mt (down $18 from last week).
USDA reported the cash average ethanol prices were $2.13 to $2.39/gal regionally this week, mostly 5 to 12 cents weaker wk/wk.
Corn oil prices were 72 to 84 cents/lb regionally, mostly lower within 3c of UNCH from last week.
DDGS were mostly higher on the week, withing $20/ton of unchanged from $200 – $255 regionally.
Bids in MO got up to $330/ton as the expensive outlier.
DDGS prices to the Export Point averaged between $242 to $348/ton, down from prior week.
USDA’s weekly Ethanol report showed the MN average B100 Biodiesel price was $6.74/gal for the week, uncjanged with the week prior.
After the sessions close, CFTC’s weekly CoT report showed managed money funds were buying corn through the week that ended 11/29.
Their net long grew 20.8k contracts to 191,631 – with 14k new longs and 7k fewer shorts.
Commercial corn trader open interest shrank by 10.5% through the week as the Dec options expired and deliveries began.
More longs were closed than shorts, expanding the groups net short by 20k contracts to 440,927 contracts.
As for soybean, the report showed managed money was 102,104 contracts net long in soybeans as of the 11/29 settle.
That was a 20k contract increase through the week, mostly fueled by net new buying.
Commercial soybean traders added 12k short hedges, with 4k fewer longs, for a net short of 144,388 contracts.
Managed money firms were also net buyers in meal and soy oil through the week that ended 11/29.
As for wheat, Weekly CoT data showed CBOT wheat speculative traders extended their net short by 666 contracts to 54,068 during the week that ended 11/29.
The funds were little changed on net in KC wheat, with +1.5k contracts added on both sides their net long stayed at 17,129 contracts.
In MGE wheat, spec traders were 1,429 contracts net short at the 11/29 close.
That was 777 contracts more net short via light net new selling.
In energy markets, oil prices slipped 1.5% in choppy trading on Friday.
Brent crude futures settled down $1.31, a 1.5% drop, at $85.57 per barrel.
U.S. West Texas Intermediate (WTI) crude futures fell $1.24, or 1.5%, to $79.98 per barrel.
Both contracts, however, notched their first weekly gains at around 2.5% and 5%, respectively, after three consecutive weeks of drops.
Poland agreed to the EU’s deal for a $60 per barrel price cap on Russian seaborne oil, allowing the bloc to move forward with formally approving the deal over the weekend.
European Commission President Ursula von der Leyen said the Russian oil price cap will be adjustable over time so that the union can react to market developments.
Russian Urals crude traded at around $70 a barrel on Thursday afternoon.
The cap was designed to limit revenues to Russia while not resulting in an oil price spike.
However, Russian oil output could fall by 500,000 to 1 million bpd early in 2023 due to the ban on seaborne imports from Monday, two sources at major Russian producers said.
Traders will closely watch over the weekend if the OPEC+ will try to shock and awe the market at their weekend meeting.
OPEC+ is widely expected to stick to its latest target of reducing oil production by 2 million barrels per day (bpd) when it meets on Sunday.
However, some analysts believe that crude prices could fall if the group does not make further cuts.
Meantime, China is set to announce an easing of its COVID-19 quarantine protocols within days.
The U.S. oil rig count, an indicator of future production, remained unchanged this week, according to data from Baker Hughes.
Money managers cut their net long U.S. crude futures and options positions in the week to Nov. 29, the U.S. Commodity Futures Trading Commission (CFTC) said.
In ocean freight markets, the Baltic Exchange’s dry bulk sea freight index marked its biggest weekly percentage gain in almost two months, although declining on Friday on a fall in capesize rates.
The overall index, indeed, shed 14 points, or about 1%, to 1,324.
However, the main index gained 11.4% for the week, its biggest rise since Oct. 7.
Notabily, the capesize index on Friday was down 51 points, or about 3.3%, at 1,519.
It posted a weekly loss of 5.8%.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes of coal and steel-making ingredient iron ore, decreased $422 to $12,598.
The panamax index on Friday rose 16 points, or about 1%, to 1,618.
It rose 9.4% for the week, its highest since Sept. 9.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, increased $142 to $14,564.
The supramax index lost 3 points to 1,162 on Friday, extending its decline for a fifth straight session.
In equity markets, US stocks on Friday settled mixed.
U.S. Nov nonfarm payrolls rose +263,000, stronger than expectations of +200,000.
The Nov unemployment rate was unchanged at 3.7%, right on expectations.
U.S Nov average hourly earnings eased to +5.1% y/y from +5.6% y/y in Oct but were still higher than expectations of +4.6% y/y.
After the payrolls report traders were betting that the Fed would raise its policy rate from the 3.75%-4% range implied earlier to 4.92% by March 2023 and to the 5%-5.25% range by May, based on futures contract prices and the CME Fedwatch tool.
Before the report, the rate was seen topping out at 4.75%-5%.
As a results, stocks initially have been sold off while bond yields jumped.
However, then stocks recovered from their worst levels as T-note yields fell back for the remainder of the day.
Notabily, the 10-year T-note yield Friday finished the day down -0.1 bp at 3.504% after initially climbing to 3.633%.
Benchmark 10-year note yields were up 2.7 basis points to 3.554%, from 3.527% late on Thursday.
The 30-year bond yield was last down 3.9 basis points at 3.594%, from 3.633%.
The 2-year note yield was last was up 7.1 basis points at 4.3255% from 4.254%.
In this context, the Dow Jones Industrial Average rose 34.87 points, or 0.1%, to 34,429.88.
The S&P 500 fell 4.87 points, or 0.12%, to 4,071.7 and the Nasdaq Composite dropped 20.95 points, or 0.18%, to 11,461.50.
The S&P, Nasdaq and the Dow all boasted their second weekly gains in a row, with the Nasdaq led the charge with a 2% advance.
The S&P added 1% for the week while the Dow was up 0.2%.
In currency trading, on Friday the dollar gradually gave back its gains after Chicago Fed President Evans said in order to cool price pressures, “we probably are going to have a slightly higher peak of the fed funds rate, even as we likely will step down the pace of rate increases.”.
Earlier it had jumped sharply in response to the jobs data, gaining as much as 0.82%.
In this context, the dollar index was last down 0.13% on the day against a basket of currencies at 104.50, and the euro gained 0.10% to $1.0537, the highest since June 28.
The greenback slipped 0.71% on the day against the Japanese yen to 134.38. It earlier reached 133.62 yen, the weakest since August 16.
The greenback had tumbled, this week, after Fed Chairman Jerome Powell said on Wednesday that it was time to slow rate hikes, raising hopes that the Fed was closer to the end of its tightening cycle.
Going back to analyzing the other agricultural markets …
From Canada, despite improved growing conditions overall relative to 2021, weather in the southwestern and west-central Saskatchewan and southern Alberta remained dry, negatively impacting crop output.
Indeed, per latest data from Statistics Canada published on Friday, total Canadian wheat production is estimated at 33.8 MMT in 2022.
That is the largest crop since 2020 and the third highest production on record.
However, that was down 900,000 MT from the September forecast and at the bottom end of trade estimates.
Spring wheat output specifically was trimmed 421,000 MT from Statistic Canada’s September forecast to 25.679 MMT.
The major cut came in the durum crop estimate, which at 5.443 MMT was cut from 6.1 MMT in September.
Data from Statistics Canada also showed 2022/23 corn production at 14.539 MMT.
That was down 400k MT from the September report, and the average pre-report estimate had 14.8 MMT plugged in.
Canadian canola production is estimated at 18.17 MMT, down from the 19.1 MMT forecast in September and below even the lowest trade estimate.
Their soybean production is now forecasted at 6.543 MMT, mostly unchanged from Sept.
Meantime, producers’ deliveries of common wheat in week 17 of the shipping season, were at 669,9k mt.
That was stronger from 586,8k posted a week erlier.
Deliveries of durum wheat, were firmer at 170.6k mt, but sligthly down from 186k mt a week earlier.
Meantime, Canada exported 421.1k mt of common wheat in week 17 of the shipping season.
That was down from 447.8k mt posted a week earlier.
Durum wheat exports, also were weaker at 193.5k mt, down from 205.2k mt a week earlier.
Meantime, total Commercial Stocks of common wheat stood at 2.810,4k mt, up from 2.682,2k mt a week earlier.
Durum total commercial stocks, were also higher at 772,2k mt, up from 766,6k mt posted the prior week.
Cumulative exports for common wheat are now at 6.402,1k mt.
That is compared with 4.167.7k mt year ago to date.
As for durum wheat, cumulative exports reached 1.476,5k mt, vs 1.068,4k mt year ago to date.
Meantime, cash bids for durum wheat continued trending lower week over week.
Indeed, looking at the average regional price of C$490.33/mt as of Dec 2, that is C$2.74/mt weaker from the prior week.
Going inside the numbers of the week, as at November 28, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $508.84 per tonne, down C$9.81/t from prior week;
– for the N2 class CWRS 13.0% – $502.64/t, down C$10.01 wow;
– for the N3 CWRS – $508.35/t, down C$14.26 from prior week.
As at November 28, 2022, for the N1 CWAD 13% (durum wheat first class) average street price were at C$499.72, down C$3.67 week on week.
The export basis West Coast & Central SK, meantime, moved up from C$102.94 to 104.37 a tonne.
Thus, delivered FOB price Great Lakes was posted at C$604.09 (US$ 444.90/t -$8.36 wk/wk).
That represent a C$2.24/t decline from prior week.
Per latest data from European Commission, as at November 23, 2022, Durum wheat – FOB CA St Lawrence (CWAD) was offerd at C$617.87/t ($460/t -$8/t), down C$8.17/t week on week.
As at December 2, 2022, for the N1 CWAD 13% (durum wheat first class), average street price in REGIONAL ZONES was at C$490.33 per tonne, down C$2.74 from prior week.
(1USD=Cnd$1.3473 up from 1.3377 a week earlier).
From South America, Brazilian soybean crop, which farmers are finishing sowing, will reach an estimated record of 153.3 million tonnes in the 2022/2023 cycle driven by area growth, agribusiness consultancy Datagro said on Thursday.
If the projection is confirmed, production will rise by almost 21% from the previous season, Datagro said.
Farmers are planting an estimated 43.79 million hectares (108.2 million acres) with the oilseed this season, an increase of 762,000 hectares from the forecast in July and a 1.98 million hectare rise from the previous year.
“The increase in area takes place throughout Brazil, but more intensely in the states of the north, northeast and center west.”
However, Datagro also said farmers face concerns in the center-south region due to the La Nina weather phenomenon.
StoneX, on its part, pegged the current Brazilian soybean crop at 155.09 million tonnes, up from 154.35 Mt last month and up from 127.23 Mt last year.
StoneX estimated the Brazilian 22/23 corn crop at 130.3 MMT, a 5.5% increase from their prior estimate.
They now have 2nd crop at 99.6 MMT, with the first crop UNCH at 28.6 MMT.
Meantime, Brazil’s corn exports hit 6 million tonnes in November, significantly higher than the 2.4 million tonnes exported in November last year.
Soybean exports in November were 2.6 million tonnes, up slightly compared to the 2.5 million tonnes shipped in November last year.
In Argentina, wheat production outlook is likely to face more cuts due to lower-than-expected yields, the Buenos Aires grains exchange said on Thursday, as the harvest of the grains advances.
In a weekly crop report, the exchange indeed said 2022/23 wheat production, which it current estimates at 12.4 million tonnes, is showing “yields below expected” as the harvest gained pace.
Until Wednesday, Argentine farmers had harvested 23% of the wheat planting area, a 22 percentage point delay versus the harvest a year earlier.
According to the Rosario grains exchange (BCR) total harvest estimate is now to just 11.8 million tonnes.
On this wake, according to BCR, Argentine wheat exports could reach its lowest level in eight years in the 2022/23 campaign at just 6.5 million tonnes.
On the other hand, the Buenos Aires grains exchange said the planting of 2022/23 soybeans continued to be delayed.
Soybean planting, was 29.1% complete.
That was 17.2 percentage points behind the previous season overall.
It’s estimates 16.7 million hectares will plant this season.
However, sowing was still being held up by “the lack of surface humidity and high temperatures”, despite some rains in recent days.
The Rosario grains exchange (BCR) said on Friday across the country, forecasts a total soybean planting area of 17.1 million hectares, with a harvest estimate of some 48 million tonnes, above the 42.2 million harvested in the previous season.
Meantime, corn planting for the 2022/2023 season is 25.4% complete on the 7.3 million hectares projected, while producers have begun to sow batches of late-planted corn.
Refinitiv Commodities Research reports that due to persistent drought and planting delays in Argentina 2022-23 maize production forecast has been cut by 1.2Mt, to 48.0Mt.
Long-awaited rains during second the half of November were insufficient to recharge soil moisture reserves, which are at a five-year low in most major producing provinces.
The latest ENSO outlook indicates that the current La Niña event is expected to last until end 2022, and may not completely dissipate by early 2023.
In this context, as at December 1, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $407, down $7/t from prior week.
Argentina corn feed was up $8/t for the week, closing at $302.
Brazilian corn feed (Paranagua) was valued at $289, was down $10/t from prior week.
Argentina feed barley, was unchanged for the week to $355.
Argentina soybean was down $6 at $586.
Brazilian soybean was down $11, finishing the week at $596.
In Europe, European Union soft wheat exports during the 2022/23 marketing year were 13.89 Mt through November 27, which is slightly ahead of last year’s pace so far.
France on its own accounted for 5.65 Mt of the total, with North Africa as the main destination.
Algeria, Morocco, Egypt, Nigeria and Saudi Arabia were the top five destinations.
EU barley exports were at 2.74 MMT vs 4.63 MMT last year’s pace so far.
Meantime, EU corn imports are more than doubling last year’s pace so far, with 12.12 Mt, through November 27.
Spain, the Netherlands, Poland, Portugal and Italy have been the top five buyers.
EU soybean imports reached 4.28 MMT through November 27, which is moderately below last year’s pace so far.
EU soymeal imports were also slightly lower year-over-year, with 6.54 million metric tons during the same period.
It should be noted, however, that rapeseed imports are estimated at 2.9 Mt by the European Commission so far, up 840 kt over one year.
On Friday, French farm office FranceAgriMer reported that 2022/23 soft wheat crop quality continues to be pristine, with 98% rated in good-to-excellent condition through November 28.
Plantings are close to being finished, including 99% of the soft wheat crop and 89% for durum.
For winter barley, crop condition dipped to 97% in good/excellent condition by Nov. 28, from 98% the previous week.
Mild weather has kept physiological progress running six to seven days ahead of the prior five-year average.
Meantime, the rise of the euro penalized EU export competitiveness.
Recession fears and competitiveness of Black Sea origins, made an additionally pressure on grain and oilseed prices this week.
As a results, March wheat prices on Euronext closed the week at 307.75 euros a tonne, down €10.75/t for the week.
March’s European Durum Wheat, settled at €476.5/t, down €1.5/t for the week.
March corn price, was down €9.5/t for the week, closing at 294.50 euros per ton.
Rapeseed Feb contract closed at €566.75/t, down €23.25/t for the week.
Jan 23 UK wheat feed contract, closed closed at £240.20, down £14.05/t week on week.
Meantime, as of December 1, 2022, FOB prices in US dollar for French wheat with 11.5% protein and Oct delivery, were at $339/mt, down $4 from prior week.
German wheat, Deposilo Hamburg, was valued at $339.39/t, up $6.53 from prior week.
Baltic wheat, delivery first Vilnius, past week was at $323.58, down $5.12 from prior week.
Spanish durum wheat Sevilla (Depo Silo), was valued at $527/t up $6.9 from prior week.
French durum wheat – delivered La Pallice Spot – July 2022 basis, this week was valued at $490.11/mt, up $6.42 from prior week.
French durum wheat – FOB Port la Nouvelle, this week continued to be N.Q..
Italian durum wheat Bologna (Delivered to first customer), was valued $505.92/t, up $3.5 from prior week.
Corn, delivered Bordeaux Spot – July 2022 basis, was at $317.25 per tonne, down $1.05/t from past week.
Corn FOB Rhin Spot – July 2022 basis, was down $1.1 to $313.04/t.
Feed barley delivered Rouen was at 288.80$/t, down $0.38 per tonne.
Malting barley FOB Creil Spot – July 2022 basis was at $358.36 per tonne, down $0.51/t from prior week.
Rapessed FOB Moselle – 2022 harvest was at 617.64$/ton, up $7.04 compared to prior week.
Standard sunseed FOB Bordeaux – 2022 harvest was up 3.42$ from prior week at $658.75 per tonne.
(Eur/USD = 1.0540 vs last week 1.0402).
From Russia, the Russian agriculture ministry revised the export tax for wheat, corn and barley.
Particularly, as of Dec. 7, the export duty on wheat will slightly increase to 2,806.8 from 2,788.0 rubles per ton a week earlier.
Ditto on barley, the duty will increase to 2,315.0 rubles from 2,308.6 rubles per ton a week earlier.
For corn, will continue to 0 rubles also this week.
This new duty rates will be in effect through December 13, inclusive.
The duties were calculated based on indicative prices: $313.1 per ton for wheat ($313.6 a week earlier), $283.0 for barley ($283.7), $215.4 for corn ($222.1).
From the Middle Kingdom, China plans to auction off another 500k MT of its imported soybean reserves on December 9, according to a new statement from the country’s National Grain Trade Center.
China has offered a series of similarly sized auctions throughout 2022 to boost local supplies and quell high prices.
From South East Asia, Indian farmers have planted wheat on 21.2 million hectares since Oct. 1, when the current sowing season began, up 6% from a year ago, government data showed on Friday, as record high prices and higher soil moisture levels have encouraged planting.
Domestic wheat prices have increased 33% in 2022 to 29,000 rupees ($355.19), exceeding the government buying price of 21,250 rupees ($260.32).
With increased planted area due to high domestic prices and replenished soil moisture, forecasts indicate India may harvest a bumper wheat crop in 2023.
Farmers have also increased acreage under rapeseed, the key winter-sown oilseed, to 7.7 million hectares as of Dec. 2, up from last year’s 6.9 million hectares, the Ministry of Agriculture & Farmers’ Welfare said in its weekly update.
Between Oct. 1 and Dec. 2, the total oilseed area touched 8.3 million hectares, up from 7.5 million hectares during the same period last year.
From Australia, a charge on harvest in New South Wales under mostly clear skies has seen a flurry of selling activity in the past week that has enabled most consumers to get covered into the New Year.
The Victorian harvest has also cranked up, and to everyone’s delight, rainfall recorded for both states in growing areas in the week has been minimal at most.
In the north, feed barley is in demand, and an unusually high proportion of malting has tightened supply in the near term.
Despite rain driven harvest delays and quality concerns on the east coast of Australia, October to December wheat export volume amounted to 2.25 MMT, 34% above last year.
Strong export programs in Queensland, South Australia, and Victoria continue, driven by high carryover stocks after last season’s record crop.
In this context, indicative delivered prices in Australian dollars per tonne for prompt crops were:
Barley Downs: $378, up $13 from Nov 24;
SFW wheat Downs: $385, unchanged from Nov 24;
Sorghum Downs: $420, unchanged from Nov 24;
Barley Melbourne: $385, down $10 from Nov 24;
ASW wheat Melbourne: $430, down $50 from Nov 24;
SFW wheat Melbourne: $455, down $55 from Nov 24.
For delivery in Jan-Feb indicative prices were:
Barley Downs: $388, up $15 from Nov 24;
SFW wheat Downs: $390, unchanged from Nov 24;
Sorghum Downs: $385, unchanged from Nov 24;
Barley Melbourne: $365, down $5 from Nov 24;
ASW wheat Melbourne: $415 down $10 from Nov 24;
SFW wheat Melbourne: $400, down $5 from Nov 24.
(AUD/USD=> US$0.6795 vs. US$0.6751 prior week).
On the international trade scene, importers in Thailand reportedly booked 123k MT of feed wheat from Australia.
Algeria is believed to have purchased 450k MT of optional origin milling wheat after tendering for 500k MT.
Reports on the wire show Taiwan purchased 42,750 MT of milling wheat to be sourced from the U.S.
Watching next week’s market, we start the first full week of December with the weekly Export Inspections report on Monday.
Census will release monthly trade data on Tuesday.
Skip ahead to Wednesday and EIA will release the weekly ethanol production and stocks data.
Thursday will see the weekly Export Sales report.
Friday rounds out the week with the monthly USDA Crop Production and WASDE reports.
FAO Food Price Idex – Dec Update
The FAO’s world price index fell marginally in November, marking an eighth straight monthly fall since a record high in March.
Notabily, FAO price index, which tracks the most globally traded food commodities, averaged 135.7 points last month, down from 135.9 for October.
The October figure was unchanged from the FAO’s previous estimate.
Lower readings for cereals, meat and dairy products in November offset higher prices for vegetable oils and sugar, the FAO said.
Notabily, the FAO Cereal Price Index averaged 150.4 points in November, down 1.9 points (1.3 percent) from October, but still 9.0 points (6.3 percent) above its value a year ago.
World wheat prices registered a 2.8-percent decline during the month of November.
International prices of coarse grains also eased in November, down 1.0 percent from October.
Maize prices declined by 1.7 percent month-on-month.
International prices of sorghum declined by 1.2 percent in November in tandem with maize prices, while those of barley increased by 2.5 percent.
International rice prices moved up by another 2.3 percent in November.
The FAO Vegetable Oil Price Index averaged 154.7 points in November, up 3.4 points (2.3 percent) after declining for seven consecutive months.
The increase was driven by higher international palm and soy oil prices, more than offsetting lower rapeseed and sunflower oil quotations.
The FAO Dairy Price Index averaged 137.5 points in November, down 1.7 points (1.2 percent) from October, marking the fifth consecutive monthly decline, but remained 11.6 points (9.2 percent) above its value a year ago.
The FAO Meat Price Index averaged 117.1 points in November, down 1.1 points (0.9 percent) from October, also marking the fifth consecutive monthly decline, but remained 4.6 points (4.1 percent) above its value a year ago.
The FAO Sugar Price Index averaged 114.3 points in November, up 5.7 points (5.2 percent) from October, marking the first increase after six consecutive monthly declines.
Despite the November increase, international sugar price quotations remained 5.9 points (4.9 percent) below their levels in the same month of last year, weighed down by prospects of ample global supplies in the 2022/23 season.
The slight decrease in November meant that the FAO food index is now only 0.3% above its level a year earlier, the agency said.
The indicator, however, remains at historically high levels.
The FAO warned last month that expected record food import costs in 2022 would lead the poorest countries to cut back on shipped volumes.
FAO Supply & Demand – Dec Update
In separate cereal supply and demand estimates, the FAO lowered its forecast for global cereal production in 2022 to 2.756 billion tonnes from 2.764 billion estimated last month.
The forecast was 2% below the estimated output for 2021 and would mark a three-year low, the FAO said.
The downward revision to the global cereal crop projection mainly reflected weak corn prospects in Ukraine.
Projected world cereal stocks by the end of the 2022/23 season were revised down by 1.1 million tonnes to 839 million tonnes, 2.2% below the previous season and the lowest level for three years.
The 2022/23 global cereal stock-to-use ratio, often used as a supply indicator, would drop to its lowest since 2013/14, but at a forecast 29.3% it would still represent a relatively comfortable level, the FAO added.
That’s all, thank you.
We wish you a good day and a good weekend.
Author: Sandro F. Puglisi