Good morning, Farmer Family …
US farm markets were mixed but mostly higher on Tuesday.
Soybean prices jumped 1.77% higher, with soymeal climbing more than 2.65%, and soyoil tracking 0.92% higher.
Wheat found variable gains, as Chicago SRW ended 0.25% higher, KC HRW closed up 1.42%, and MGEX spring wheat ended up by 1.03%.
Corn failed to follow suit, closing with losses of 0.15% at the bell.
Corn was mostly flat, after earlier hitting a fresh one-month high, despite the USDA reported another flash sale to China of 136,000 tonnes of U.S. corn.
Traders, indeed, speculated over U.S. planting acreage and grains availability in the Black Sea export corridor.
Notably, ahead of Friday’s annual USDA planting intentions report, analysts on average expect 2023 corn plantings at 90.880 million acres, wheat at 48.852 million acres and soybeans at 88.242 million acres.
That weighed on corn prices, but kept soybean prices on the rise due tight US and global soybean stocks.
The early stages of U.S. planting across the Midwest, are running into wet fields and cold temperatures.
Due drought affected Argentina and reduced crop productions, crushing facilities are having difficult time in buying soybeans from producers.
On this wake, rumors of the cancellation of Argentinian ships in favor of the United States drove the market and counterbalancing the still very strong Brazilian harvest pressure.
Beans were also supported by a wider rise in the oilseed complex and sharp gains in crude prices.
Wheat edged up, with spring wheat which gained on speculation over planting delays in the northern U.S. Plains due to cold weather.
Meanwhile, the situation remains very delicate also in the south of the Great Plains where the drought persists for the beginning of April and where the crop ratings remain poor overall, pushing hard red winter wheats higher.
However, more wet weather is on its way to the central U.S. between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA.
An area stretching from southern Minnesota through central Michigan is likely to gather the largest levels during this time.
Seasonally wet weather will be probable across nearly all of the Corn Belt between April 4 and April 10, per NOAA’s new 8-to-14-day outlook, which also shows warmer-than-normal conditions for the Mid-South, Southeast and Ohio River Valley.
In this context, corn basis bids held steady across the central U.S..
Soybean basis bids were mostly steady across the central U.S., but did tilt 9 cents lower at an Ohio elevator and 5 cents higher at an Illinois river terminal.
Commodity funds were net buyers of CBOT corn, soybean, wheat, soymeal and soyoil futures contracts.
On this morning, Chicago soybean prices eased, after hitting one-week high, previus session.
Wheat also fell, while corn edged higher.
Notably, the most-active soybean contract on the Chicago Board of Trade fell 0.2% to $14.65-1/2 a bushel, as of 02:56 GMT.
Wheat lost quarter of a cent to $6.99-1/2 a bushel and corn added 0.1% to $6.47-3/4 a bushel.
In energy markets, crude oil prices edged up on Tuesday, extending sharp gains from the previous session.
Brent crude futures indeed settled at $78.65 a barrel, up 53 cents, or 0.7%.
West Texas Intermediate U.S. crude settled at $73.20 a barrel, gaining 39 cents, or 0.5%.
On Monday, Iraq was forced to halt exports of about 450,000 barrels per day (bpd) from its northern Kurdistan region through Turkey after an arbitration decision confirmed Baghdad’s consent was needed to ship the oil.
Concerns over banking issues have subsided for now in temporarily relieving expectations for a recession.
U.S. crude oil stocks fell by about 6.1 million barrels in the week ended March 24, per latest data from American Petroleum Institute showed on Tuesday, although a preliminary analysts poll, had seen U.S. crude oil stockpiles were seen rising by about 200,000 barrels last week.
Gasoline stocks also fell by about 5.9 million barrels, according to market sources citing American Petroleum Institute figures, while distillate stocks rose by about 550,000 barrels.
China’s crude oil imports are expected to rise by 6.2% in 2023 to 540 million tonnes, an annual forecast by a research unit of China National Petroleum Corp showed on Monday.
A weaker U.S. dollar, which makes oil less expensive for international buyers, also supported crude prices.
However, Russian Deputy Prime Minister Alexander Novak on Tuesday said Russia needed to focus on boosting energy exports to so-called friendly countries and noted that Russian oil supply to India registered a 22-fold jump last year.
Pressuring oil prices, also were French industrial strikes that resulted in the country’s refineries being debilitated to some extent, hindering fuel deliveries throughout the country and depressing European crude prices as market players looked to sell.
On this morning, oil rose for a third session.
Notably, Brent crude climbed 42 cents, or 0.5%, to $79.07 a barrel by 08:02 GMT, while West Texas Intermediate U.S. crude increased 61 cents, or 0.8%, to $73.81.
Norwegian oil firm DNO said it had begun shutting down production at its fields in Kurdistan.
The company’s Tawke and Peshkabir fields averaged output of 107,000 bpd in 2022, a quarter of total Kurdish exports.
Attention will focus on official U.S. inventory data from the Energy Information Administration at 14:30 GMT to see if it confirms the crude stock decline.
In ocean freight markets, the Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, fell to its lowest level in nearly three weeks on Tuesday, weighed down by dwindling demand across all vessel segments.
The overall index, indeed, fell 54 points, or about 3.7%, to 1,402, its lowest since March 9.
Notably, the capesize index lost 149 points, or 8.3%, to 1,646, its biggest drop since Feb. 16.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes carrying commodities such as iron ore and coal, decreased $1,233 to $13,655.
The panamax index shed 4 points, or about 0.3%, to its lowest since March 2 at 1,561.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $34 to $14,051.
Among smaller vessels, the supramax index lost 11 points to 1,315.
In equity markets, US stock indexes Tuesday posted moderate losses.
Higher T-note yields undercut technology stocks.
However, bank stocks stabilized for a second day as hopes of more support from U.S. authorities lifted sentiment toward the banking sector.
As a result, global bond yields moved higher on reduced fears about the banking sector.
The 10-year T-note yield rose +3.0 bp to 3.560%.
Also, the 10-year German bund yield rose +6.3 bp to 2.290%, and the 10-year UK gilt yield rose +9.0 bp to 3.456%.
Also, the rally in crude oil prices boosted energy stocks higher.
Tuesday’s U.S. economic news was mixed.
On the negative side, Feb wholesale inventories unexpectedly rose +0.2% m/m versus expectations of a -0.2% m/m decline.
Also, Feb retail inventories rose +0.8% m/m, more than expectations of +0.2% m/m and the largest increase in 6 months.
The inventory build is bearish for stocks since companies may need to cut back on production due to the higher unsold stocks.
On the positive side for stocks, the Conference Board’s March U.S. consumer confidence index unexpectedly rose +0.8 to 104.2, stronger than expectations of a decline to 101.0.
Also, the March Richmond Fed manufacturing survey index rose +11 to -5, stronger than expectations of -10.
The job market remains remarkably solid, while smaller corners of the economy are showing more weakness.
Another report suggested U.S. home prices softened in January from December, but not as much as economists expected.
Thus, traders placed bets Tuesday that the Fed will raise rates at its next meeting in May, though the slight majority is still calling for it to hold rates steady.
Traders are still largely betting the Fed will have to cut rates as soon as this summer to prop up the economy.
In this context, on Wall Street, the benchmark S&P 500 index dipped 0.2% to 3,971.27.
The Dow Jones Industrial Average slipped 0.1% to 3,394.25.
The Nasdaq composite lost 0.4% to 11,716.08.
On this morning, Asian stocks rose.
The Shanghai Composite Index lost less than 0.1% to 3,243.06 while the Nikkei 225 in Tokyo gained 0.8% to 27,728.70.
The Hang Seng in Hong Kong jumped 1.9% to 20,165.60 after Chinese e-commerce giant Alibaba Group announced plans to split into six units in an effort to become more agile and unlock value for investors. It said they would include e-commerce, entertainment and logistics.
The Kospi in Seoul was unchanged at 2,435.60 while Sydney’s S&P-ASX 200 advanced 0.2% to 7,050.30.
India’s Sensex opened up 0.3% at 57,807.62.
New Zealand declined while Southeast Asian markets rose.
In currency trading, the dollar gained to 131.71 yen from Tuesday’s 130.80 yen.
The euro declined to $1.0839 from $1.0842.
Going back to analyzing the other agricultural markets …
From South America, Brazilian national agricultural agency CONAB reported, at 25 Mar, the 2022-23 first (full season) maize crop harvest was 42pc complete (35pc previous week, 47pc previous year).
Second (safrinha) crop plantings were 91pc complete (85pc, 98pc).
Recent Rains in Mato Grosso were deemed beneficial for crop development and yield prospects, while reduced precipitation in Paraná allowed fieldwork to progress.
The Rural Clima consultancy reported that Brazil’s second corn crop should see “regular rainfall” in April, which would be a positive for the country’s production potential.
Soybean harvest was 69pc complete (63pc, 76pc).
Harvest in Mato Grosso neared completion, with yields reportedly good.
Little progress was made in Rio Grande do Sul, where crops were seen in varied conditions.
Good progress was made in Paraná, where crop quality was good, and yields exceeded earlier expectations.
Meantime, Brazil’s Anec now expects the country’s corn exports will reach 835,660t in March, which is modestly below its prior projection from a week ago.
Anec additionally expects Brazil to export around 590,576 of wheat this month.
Anec also estimates that the country’s soybean exports will reach 15.2 MMT in March, which is slightly below the group’s prior projection from a week ago.
Anec also expects Brazilian soymeal exports to reach 1.757 million metric tons this month.
In Europe, the rebound in grain prices seems running out as wheat and corn declined slightly, while rapeseed was steady.
On the weather side, Europe remains in a favorable situation for crops.
Meantime, soft wheat exports from the European Union in the 2022/23 season that started in July had reached 22.66 million tonnes by March 26, up 8% from the 20.89 million shipped by the same week in 2021/22, European Commission data showed on Tuesday.
EU barley exports so far in 2022/23 totalled 4.43 million tonnes, down 30% from 6.29 million a year ago, while EU maize imports surged 69% to 20.38 million tonnes, against a year-earlier 12.08 million.
EU soybean imports reached 8.69 MMT through March 26, which is moderately below last year’s pace so far.
EU soymeal imports are also down year-over-year, with 11.54 million metric tons over the same period.
A breakdown of the EU data showed France remained by far the biggest EU soft wheat exporter this season, with 8.70 million tonnes shipped, followed by Romania with 2.90 million, Germany with 2.7 million and Lithuania with 1.97 million.
The Commission listed the EU’s top five soft wheat export destinations (Morocco, Algeria, Nigeria, Egypt, and Saudi Arabia)
Spain remained the leading EU maize importer so far in 2022/23 with 6.89 million tonnes, ahead of the Netherlands with 2.41 million, Italy with 1.71 million, Portugal with 1.56 million and Hungary with 1.50 million, the data showed.
The Commission also listed the five top maize import origins so far in 2022/23 (Ukraine, United Kingdom, Canada, Russia, Moldova).
However, the Commission said that it was still experiencing problems compiling grain trade figures from Germany and Italy.
Export data submitted by Germany from November may be inaccurate after the country’s switch to a new declaration system, while for Italy import data only went up to Jan. 30, it said in a note.
The next two reports will be published on Wednesdays April 5 and April 12 instead of Tuesdays, the Commission said.
From North Africa, Ministry of Agriculture and Land Reclamation has released a total of 199,000 tons of corn and soybean fodder worth $96 million from the country’s ports during the period from March 17th to 23rd, Minister Al-Sayed El-Quseir announced on March 27th.
The released amount included 139,000 tons of corn worth $50 million, 60,000 tons of soybeans worth $45 million, and feed additives worth about $1.4 million.
This brings the total amount of fodder released from October 16th, 2022 to March 23rd, 2023, to 3.388 million tons, including 2.426 million tons of corn, and 962,000 tons of soybeans and feed additives with a total value of $1.671 billion.
This is part of the government’s efforts to secure the release of production inputs and fodders from ports in cooperation with the Central Bank of Egypt (CBE).
From South Africa, South African farmers are expected to harvest 2.65% more maize in the 2022/2023 season compared with the previous season, the government’s Crop Estimates Committee (CEC) said on Tuesday.
The CEC’s second summer crop forecast estimates the 2023 harvest at 15.88 million tonnes, up from the 15.47 million tonnes harvested last season.
The harvest is expected to consist of 8.34 million tonnes of white maize, used for human consumption, and 7.54 million tonnes of yellow maize, used mainly in animal feed.
From Saudi Arabia, the Saudi Agricultural and Livestock Investment Company (SALIC), fully owned by the Public Investment Fund, announced on Tuesday, March 28, 2023, that it completed the supply of more than 1.2 million tonnes of strategic commodities in 2022.
SALIC also directly supplied 720,000 tonnes of wheat, which represents 20% of the Kingdom’s annual purchase, after having won tenders launched by the General Food Security Authority as part of a programme to encourage and support Saudi investors abroad in diversifying sources of wheat, to enhance food security in the Kingdom.
According to SALIC, it indirectly supplied more than 300,000 tonnes of wheat, 120,000 tonnes of barley, 70,000 tonnes of soybeans, 12,000 tonnes of red meat, and 11,000 tonnes of rice through its subsidiary companies in various continents.
The company CEO, Eng. Sulaiman bin Abdulrahman Al-Rumaih, said: “We are proud to supply 30% of the Kingdom’s wheat needs through direct and indirect contracts, in addition to a number of other essential food commodities. These efforts contribute to the company’s goal of achieving the national objective of reaching food security by providing strategic commodities through SALIC’s investments in countries with competitive advantages around the world.”
Al-Rumaih added that “one of the supply contracts, for 60,000 tonnes of barley, is unprecedented in the process of ensuring local food security, as efforts between the government and private sectors have been integrated across all stages of the supply chain, in line with the goals of Saudi Arabia’s Vision 2030 to ensure food security.
SALIC has contracted to supply barley for Mansour Al Mosaid company, which was funded by the Agricultural Development Fund, and the shipment was delivered from Australia through one of Bahri’s vessels”.
From Russia, global commodities trader Cargill Inc has told Russia’s Agriculture Ministry that it will stop exporting Russian grain from the start of the next exporting season, which begins on July 1, the ministry said on Wednesday.
“The cessation of its export activities on the Russian market will not affect the volume of domestic grain shipments abroad.
The company’s grain export assets will continue to operate regardless of who manages them,” the agriculture ministry said in a comment.
Earlier the RBC business daily reported that the company’s Russian unit had notified Agriculture Deputy Minister Oksana Lut in a letter that it would stop exporting grain in the new season.
According to the RBC report, Cargill will export 2.2 million tonnes of Russian grain in the 2022-23 exporting season, or around 4% of Russia’s total grain exports.
From the Middle Kingdom, China plans to auction off another 901,000t of its state reserves of imported wheat on April 4.
The country has held a series of wheat auctions over the past several months in its ongoing attempt to boost local supplies and suppress high prices.
From India, government on Tuesday said the export ban on wheat will continue as long as the country does not feel comfortable with the domestic supplies to meet the food security needs.
However, state-owned Food Corporation of India (FCI) Chairman and Managing Director Ashok K Meena said wheat production has not been impacted due to unseasonal rains.
Even after rains, the total wheat output will be at a record 112 million tonne this year.
He also mentioned that the government procurement of fresh wheat crop has kick-started, and about 10,727 tonne was purchased at minimum support price (MSP) in Madhya Pradesh on Monday.
FCI aims to procure 13.2 million tonne of wheat from Punjab, 7.5 million tonne from Haryana and 8 million tonne from Madhya Pradesh in the 2023-24 marketing year (April-March).
From Malaysia, Malaysian palm oil prices rose more than 3% on Tuesday to their highest closing in one week, tracking strength in rival edible oils and on expectations of tightening supply.
Notably, the benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed up 114 ringgit, or 3.19%, to 3,690 ringgit ($839.02) a tonne.
Palm rose for a second consecutive day and logged its sharpest daily rise in five weeks.
Investors are expecting Malaysia end-March stocks to fall below 2 million tonnes due to higher exports and lower production, and are expected to decline further in April due to Indonesia’s export restriction till the end of Ramadan.
Indonesia plans to set crude palm oil reference price for April 1-15 at $898.29 per tonne.
Exports of palm oil products for Mar. 1-25 rose 18.5% compared to shipments during Feb. 1 to Feb. 25, cargo surveyor Societe Generale de Surveillance said on Tuesday.
On this morning, however, Malaysian palm oil price eased, as a report highlighting the vegetable oil’s fading premium against rival oils weighed on prices.
Palm oil’s rare premium over rival rapeseed oil and sunflower oil is likely to be short-lived and should slip into a discount once top producer Indonesia eases export curbs after Ramadan.
Thus, the benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 15 ringgit, or 0.41%, to 3,672 ringgit ($834.17) a tonne by the midday break.
From Australia, local market remained subdued yesterday in eastern Australia and SA, while the WA wheat market continued with moderate trading activity in ASW1 and ASW9 at Kwinana and Albany port zones.
Barley demand remained steady in south-eastern Australia, and the weight remained bid side on the Darling Downs.
Rain continued to fall across SA, Vic and NSW with some big 24-hour totals received across northeast and southern NSW and eastern Vic with more on the way today and into next week, including more for WA.
The timing of this rainfall event could not be better for the 2023-24 winter cropping season.
On the international trade scene, Turkey’s state grain board TMO provisionally bought about 535,000 tonnes of milling wheat in an international tender on Tuesday.
The tender sought a total 695,000 tonnes and more is expected to be purchased later on Tuesday.
The tonnages purchased in TMO’s tenders are provisional and still subject to final confirmation in coming days.
Purchases can be reduced or cancelled completely.
Red milling wheat was bought in a series of consignments to different Turkish ports as well as in warehouses in Turkey.
Purchases for the shipment period May 18-June 16 were:
Iskenderun 50,000 Nibulon $301.00 C&F import;
Mersin 50,000 Nibulon $299.75 C&F import;
Izmir 25,000 Erser $306.80 C&F ex-warehouse;
Izmir 25,000 Vayla $306.90 C&F ex-warehouse;
Tekirdag 25,000 MK Merc $297.00 C&F import;
Tekirdag 25,000 Erser $303.90 C&F ex-warehouse;
Bandırma 25,000 Vayla $303.90 C&F ex-warehouse;
Bandırma 25,000 New Z $298.90 C&F import;
Derince 25,000 Bek. Tarim $308.70 C&F ex-warehouse;
Derince 25,000 Yayla $303.80 C&F import;
Samsun 25,000 Ulusoy $292.80 C&F import;
Samsun 25,000 Tarimex $297.90 C&F ex-warehouse
Trabzon10,000 Erser $295.80 C&F ex-warehouse.
Purchases for the shipment period June 12-July 10 were:
Iskenderun 50,000 Nibulon $293.99 C&F import;
Mersin 50,000 Nibulon $293.99 C&F import;
Izmir 25,000 Ulusoy $293.70 C&F ex-warehouse;
Tekirdag 25,000 Erser $294.90C&F import;
Tekirdag 25,000 Ulusoy $290.40 C&F import.
Jordan, still ahead in purchases as usual, is already covering its needs at the start of September with the purchase of 60,000 t of wheat at around $308.50/t CIF bought from Grain flower.
Other prices line up were: Viterra $330, Cargill $323, CHS $319.2, Agro Chirnogi $318, Ameropa $318.75, Farmsense $317.
Private importers in The Philippines reportedly purchased 220,000t feed wheat from Australia, at US$309-$318/t c&f, Jun/Sep shipment.
That’s all, thank you.
We wish you a nice day.
Author: Sandro F. Puglisi
