Good morning, Farmer Family …
US farm markets faced a fairly quiet session on Thursday after seeing a lot of volatility in recent weeks.
Corn prices, indeed, inched 0.08% higher, and soybean lifted 0.02%.
Both soymeal and soyoil trended slightly lower, easing by 0.07% and 0.3% respectively.
Wheat prices, meantime, made moderate inroads, with focus on extension of Black Sea shipping deal, while tensions between Russia and Ukraine remain elevated.
Thus Chicago SRW added 0.82%, Kansas City HRW rose 1.69%, and MGEX HRS gained 1.06%.
Corn clawed back some ground lost early in the day to close nearly flat after monthly Census data showed 4.921 MMT of corn was shipped in March.
That was a 50% increase from Feb exports though down 34% from the same month last year.
The season’s total 873.7 mbu was at 42.1% of the April WASDE forecast.
The monthly data also showed exports of ethanol and DDGS were 132.27m gallons and 898k MT respectively in March.
However, news of cancelled sales to China weighed on prices.
Notably, USDA’s weekly Export Sales report had 315,639 MT of old crop corn cancelations.
That was within the range of pre-report estimates and was led by 563k MT known canceled by China.
Japan, Taiwan, Guatemala, Colombia, and Mexico were net buyers.
New crop corn bookings were reported at 120k MT, led by sales to Mexico.
New crop forward sales set at 2.54 MMT, or 49% below last year’s volume.
As we can see, U.S. export sales of corn indeed fell to their lowest weekly total on record.
Brazil has a massive crop, and is providing a cheaper supplies.
As a result, concerns about export demand for U.S. corn weighed on prices pushing the futures market sank to a nine-month low earlier this week.
Soybean prices also ended practically even, after dropping earlier in the session on expected U.S. planting progress.
The monthly release from Census confirmed 115.22 mbu of soybeans were shipped during March which brought the full year total to 1.725 billion.
That was 86% of the USDA forecast.
March meal export shipments were 1.336 MMT, a 44% increase from Feb and a 23% increase from March ’22.
Census confirmed 5,087 MT of bean oil exports in March.
The full year total reached 61.4k MT, or just 27% of the April WASDE forecast.
Meantime, weekly wheat and soybean export sales were in line with expectations.
As for soybean, the report showed 289,730 MT of old crop beans were booked during the week that ended 4/27.
That was a decrease from 311k MT sold last week and included a 128k MT sale to Germany.
The week’s new crop business was reported at 67k MT, led by China, which set the total forward book at 1.837 MMT.
FAS data also showed 179,584 MT of soymeal was sold for 22/23 delivery.
That was a 17% increase for the week, but was down 27% from the same week last year.
Accumulated soymeal commitments were at 9.743 MMT as of 4/27.
Soybean oil sales were 14,017 MT and near the top end of expectations.
That was a 4-week high led by sales to Mexico.
USDA also reported a MY high for weekly oil exports at 20,609 MT.
As for wheat, the report had 211,053 MT sold for the week that ended 4/27.
That was a 35% increase from last week and was 78% above the same week last year.
Weekly shipments were 289k MT for a season total of 16.483 MMT.
USDA also reported 280k MT of new crop sales, which again were at the top end of estimates.
That left the forward book at 1.292 MMT.
However, monthly data from Census showed a flat 50 mbu March export.
That was down 18.7 mbu from February and was 12.9 mbu lower yr/yr.
That set the YTD exports at 661 million, or 85.2% of the April WASDE’s forecast with April and May remaining.
Thus, wheat prices rose, as markets cautiously eyed developments on the Black Sea grains corridor, while an Oklahoma State University crop tour projects the OK wheat crop will reach 54.3 mbu on an average yield of 24.6 bpa according to an Oklahoma Wheat Commission announcement.
The Kansas Wheat Tour will be May 15th through May 18.
In this context, corn basis bids were mostly steady to firm across the central U.S. after rising 2 to 23 cents across three Midwestern locations.
An Illinois river terminal bucked the overall trend after shifting 3 cents lower.
Soybean basis bids were down 5 cents at an Ohio river terminal and eased a penny lower at an Ohio elevator while holding steady elsewhere across the central U.S..
Commodity funds were net buyers of CBOT wheat futures.
Funds were net sellers of corn, soybeans, soymeal and soyoil futures.
On this morning, Chicago corn prices were poised to end the week with marginal gains, after dropping to a nine-month low.
Wheat was on track for a first weekly rise in three weeks.
Notably, the most-active corn contract on the Chicago Board of Trade rose 0.1% to $5.89-1/2 a bushel, as of 02:46 GMT, wheat added 0.2% to $6.46-1/4 a bushel and soybeans gained 0.1% at $14.19-3/4 a bushel.
For the week, corn was up 0.8%, wheat has added 1.9% and soybeans was little changed.
Meantime, markets were squaring for the USDA’s monthly World Agricultural Supply and Demand Estimates (WASDE) scheduled for May 12, with an expected decrease in exports.
In energy markets, oil prices settled nearly unchanged on Thursday after the European Central Bank (ECB) decided to slow the pace of interest rate hikes, with prices still down more than 9% for the week on demand concerns in major consuming countries.
Brent futures indeed settled up 17 cents, or 0.24%, to $72.50 a barrel.
U.S. West Texas Intermediate (WTI) crude settled down 4 cents, or 0.06 to $68.56.
WTI in early trading on Thursday fell to a session low of $63.64 a barrel, the lowest price since December 2021.
Oil prices tumbled this week after concerns about the U.S. economy and signs of weak manufacturing growth in China.
Prices slid further after the U.S. Federal Reserve raised interest rates on Wednesday.
That capped near-term economic growth prospects.
Thus, prices fell in spite the OPEC+, started voluntary output cuts at the beginning of May, with Russian Deputy Prime Minister Alexander Novak said on Thursday that Russia was abiding by its voluntary pledge to cut oil output by 500,000 barrels per day (bpd) from February until the end of the year.
In ocean freight markets, the Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, fell on Thursday, pressured by lower rates for panamax and supramax vessels.
The overall index, indeed, lost 13 points, or 0.8%, at 1,545, its lowest in more than a week.
Notably, the capesize index was unchanged at 2,325.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes carrying commodities such as iron ore and coal, firmed at $19,283.
The panamax index lost 26 points, or 1.7%, to hit its lowest in more than two months at 1,514.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $232 to $13,630.
Among smaller vessels, the supramax index fell 18 points to 1,105.
In equity markets, US stock indexes closed moderately lower, with the S&P 500 and Dow Jones Industrials falling to 5-week lows and the Nasdaq 100 dropping to a 1-week low.
Concern about the health of the U.S. banking system hammered regional bank stocks and weighed on the overall market.
Notably, PacWest Bancorp plunged -50%, and Western Alliance Bancorp plummeted more than -38% to record lows.
Also, First Horizon Corp sank more than -33% after it said it terminated its agreement to merge with TD Bank.
On the bearish side also Paramount Global which closed down more than -28%, and Qualcomm down more than -5%.
U.S. stocks also fell on negative carryover from a fall in European stocks after the ECB raised interest rates and maintained a hawkish tone.
Stocks maintained moderate losses after Thursday’s U.S. economic news.
U.S. weekly initial unemployment claims rose +13,000 to 242,000, showing a weaker labor market than expectations of 240,000.
However, weekly continuing claims unexpectedly fell -38,000 to 1.805 million, showing a stronger labor market than expectations of an increase to 1.865 million.
U.S. Q1 nonfarm productivity fell -2.7%, weaker than expectations of -2.0%.
Also, Q1 unit labor costs rose +6.3%, stronger than expectations of +5.6%.
The U.S. Mar trade deficit narrowed to -$64.2 billion from -$70.6 billion in Feb, wider than expectations of -$63.1 billion.
Also weighing on stocks is the lack of clarity regarding the U.S. debt ceiling.
In this context, the 10-year T-note yield fell to a 4-week low of 3.293% but recovered and rose +2.8 bp to 3.364%.
Meanwhile, the S&P 500 fell to 4,061.22.
The Dow Jones Industrial Average dropped 0.9% to 33,127.74, putting it in negative territory for the year.
The Nasdaq composite fell 0.5% to 11,966.40.
Helping to support stocks despite all the worries has been a largely better-than-feared earnings reporting season.
Ball Corp closed up more than +13%, Datadog closed up more than +14%, FleetCor Technologies closed up more than +7%.
On this morning, Asian stock markets were mixed.
Shanghai declined while Hong Kong and Sydney advanced.
Markets in Japan and South Korea were closed for holidays.
Notably, the Shanghai Composite Index shed 0.7% to 3,326.18 while the Hang Seng in Hong Kong gained 0.6% to 20,063.58.
Sydney’s S&P-ASX 200 rose 0.3% to 7,213.90.
New Zealand and Southeast Asian markets declined.
In currency trading, the dollar index rose by +0.07%, with the dollar recovering from a 1-week low, as weakness in stocks sparked a liquidity demand.
The dollar Thursday initially had fell after U.S economic news showed a wider-than-expected U.S Mar trade deficit and after Q1 nonfarm productivity fell more than expected.
Notably, the EUR/USD fell by -0.42%, while the USD/JPY fell by -0.42%, with trading activity in the yen muted, as Japanese markets closed Thursday for the Greenery Day holiday.
On this morning, the dollar declined to 134.01 yen from Thursday’s 134.14 yen.
The euro gained to $1.1042 from $1.1016.
Going back to analyze other ag commodity markets …
In Europe, due geopolitical risk premium, September wheat recovered about 4% from Tuesday close.
Rapeseed, although remains penalized by the weakness of oil, found support from palm oil rebound.
European Union exporters shipped 26.8 million metric tons of wheat including durum from the start of the marketing year on July 1 through the end of April, according to European Commission data.
That was up 8% year-over-year, the governing body said.
Still, imports into the bloc jumped 166% to 9.4 million metric tons from July 1 through April 30, the commission said.
Meantime, according to the AMIS Market Monitor, wheat 2022 production scaled up further with an upward adjustment to Kazakhstan’s harvest estimate, bringing the global output to 2.9 percent above the 2021 level.
Utilization in 2022/23 lifted this month, largely on higher utilization in India and the EU, and now rising by 1.0 percent above the 2021/22 level underpinned by growth in food, feed, and other uses.
The trade in 2022/23 (July/June) is up slightly m/m mostly on strong pace of purchases by the EU, as well as China, and higher sales foreseen for the Russian Federation, which offset a cut to India’s export forecast.
Stocks (ending in 2023) still set to rise above opening levels, by 5.2
percent, and unchanged this month as higher inventories in Kazakhstan (on account of higher production) were balanced by downgrades for stocks in the Russian Federation (on account of higher exports).
As for maize, production still well below (4.2 percent) last season’s level despite a marginal upward revision this month stemming from a higher estimate for India.
Utilization 2022/23 forecast unchanged and still set to decline by 1.5 percent below 2021/22 as a result of falls in both feed use, especially in the US and the EU, as well as industrial use, mostly in China and the US.
Trade in 2022/23 (July/June) lifted m/m, driven by continued robust
demand by the EU and higher than anticipated exports by Ukraine.
Nonetheless, global trade is still seen contracting by 2.2 percent from
2021/22.
Stocks (ending in 2023) revised up m/m reflecting higher inventories in the Republic of Korea following historical balance revisions, India as a result of higher production, and the EU owing to higher imports.
As for soybean, 2022/23 production downgraded for the third consecutive month, with a lower forecast for Argentina amid persistent hot and dry conditions outweighing an upward revision for Brazil.
Utilization in 2022/23 trimmed m/m, chiefly reflecting expectations of reduced crushings in Argentina and Egypt, while global consumption is seen growing by only 0.8 percent from the previous season.
Trade in 2022/23 (Oct/Sep) lifted marginally, as a higher import requirement by Argentina was largely offset by lower purchases by Egypt, while on the export side, lower sales from the US were compensated by higher exports from several other origins.
Stocks (2022/23 carry-out) virtually unchanged, with projected higher ending stocks in Brazil offsetting forecasted reserve releases in Argentina and Ukraine.
From Levant, the meeting of the “Grain Deal” participants announced for April 5 has been postponed to next week.
On May 5, only technical consultations regarding the continuation of the initiative will be held, stated Turkish Defense Minister Hulusi Akar, Interfax-Ukraine reports with reference to Anadolu.
According to him, before the meeting of the deputy defense ministers of the countries participating in the agreement, it became necessary to hold a meeting with the participation of the technical staff of the UN, Turkey, Ukraine, and Russia.
“We continue our efforts to ensure that the grain initiative continues quickly, safely, and systematically thanks to its significant contribution. We think that this issue will continue as planned. A technical meeting from May 5 and a meeting of deputy ministers next week,” the minister said.
He also noted that during the negotiations, they will discuss the issue of the evacuation of Turkish-flagged ships that have been in Ukraine since the beginning of the occupation.
“The evacuation of these vessels will also be on the agenda. We will work together to create an agenda, and this agenda will be discussed by the deputy ministers, and a decision will be made later,” said the Turkish Defense Minister.
Answering a question about his assessment of whether the grain initiative will be continued, H. Akar said: “We got the impression from the meetings and negotiations that these works will lead to a positive result. We are working for it, we are trying to do it.”
From Ukraine, grain exports for the 2022/23 season stood at 42.5 million tonnes by Friday, Agriculture Ministry data showed.
The volume in the July-to-June season so far included about 14.6 million tonnes of wheat, 25.1 million tonnes of corn and about 2.5 million tonnes of barley.
The ministry said grain exports during May were 590,000 tonnes up to May 5.
Meantime, according to the Deputy Minister of Economy of Ukraine Taras Kachka, the decision introduced by Poland in April to ban the import of Ukrainian agricultural products into the country was a purely political reaction, which had a “devastating effect” both for the European Union as a whole and for Ukraine.
“Last month, Poland’s decision to block Ukrainian agricultural exports caused Ukraine a loss of $143 mln, which is more than the European Commission will pay to Polish farmers in the form of compensation” he said.
From the Middle Kingdom, China imported its first cargo of corn from South Africa this week, official news agency Xinhua reported late on Thursday.
The 53,000-tonne cargo bought by state-owned trader COFCO Group arrived into Machong port in southern Guangdong province on Thursday, and will be sold to animal feed makers.
Though Beijing had approved corn imports from the country years ago, the Cofco purchase is the first significant volume to reach the country.
COFCO is working to expand purchases and “normalize” bulk imports of corn from South Africa.
South Africa, the African continent’s top corn producer, is expecting a bumper crop this year, with exports in the 2023/24 crop year estimated in a recent United States agriculture attache report at 2.3 million tonnes.
Meantime, China confirmed it had sold 16k MT of its state reserves of imported wheat in an auction held last week.
That was around 40% of the total available for sale.
From Australia, according to the Australian Bureau of Statistics Australia exported 3,785,436 tonnes of wheat and durum in March, up 25 percent from 3,038,804t shipped in February.
The figure is believed to set a new monthly record for Australian wheat exports.
In containerised exports, China on 96,070t and Vietnam on 80,458t were the biggest markets for March shipments by far, with Thailand on 34,495t in third place.
Total containerised exports of wheat in March at 314,857t were up a hefty 40pc from the February total, with the China figure up 69pc and accounting for 39,334t and much of the lift.
Containerised shipments to The Philippines, Taiwan and Thailand also jumped by more than 50pc.
Ahead of the UK-Australia Free Trade Agreement coming into effect, containerised wheat exports posted almost tripled to 3957 in March, up from 1370t in February, and much less in preceding months.
In bulk exports, China’s appetite for Australian wheat seems to know no bounds, and at 1,038,798t was up 59pc from the 651,788t shipped in February.
The second-biggest market for bulk Australian wheat exported in March was Indonesia on 317,148t, followed by Vietnam on 306,172t.
Thailand on 291,947t, The Philippines on 290,126t and South Korea on 280,092t were also major volume buyers.
Bulk export figures include the two biggest durum cargoes for the current marketing year, with 21,838t heading to Italy and 31,500t bound for Spain.
Meantime, solid demand from feedlots has seen barley trade sideways in the past week, while the low-protein wheat market has softened in response to subdued export demand.
Aside from the tail end of the sorghum harvest in New South Wales and southern Queensland, grain is mostly being executed out of bulk storages, and export trading activity is switching to higher wheat grades.
Softer values for SFW and ASW-type wheat are attracting some solid buying from domestic consumers as farmers across Australia advance winter-crop planting in mostly ideal conditions.
On the weather side, Southern NSW into Vic is set for up to another inch on the 12-day outlook while the western part of WA’s cropping belt is looking at similar falls.
Meanwhile, Qld and northern NSW are best described as patchy.
Some areas have parked tractors waiting for more moisture while pockets of northern NSW need to dry out to get back on.
On the international trade scene, the lowest price offered in the international tender from Tunisia’s state grains agency on Friday to purchase up to 100,000 tonnes of durum wheat was believed to be $379.19 a tonne c&f for 25,000 tonnes.
The offer was said to have been submitted by trading house Amber.
Lowest offer in the tender for up to 75,000 tonnes of animal feed barley also sought was assessed at $254 a tonne c&f for 25,000 tonnes, and said to have been submitted by trading house Aston.
Offers are still being considered and no purchase has yet been reported.
The lowest offer is not always accepted if conditions attached to it are regarded as unacceptable.
Durum shipment was requested between June 5 and July 15, depending on origin supplied.
Barley shipment was between June 10 and July 15, also depending on origin supplied.
The Taiwan Flour Millers’ Association purchased an estimated 52,225 tonnes of milling wheat to be sourced from the United States in a tender on Friday.
The purchase involved various wheat types for shipment from the U.S. Pacific Northwest coast between June 21 and July 5.
The deal involved 34,475 tonnes of U.S. dark northern spring wheat of a minimum 14.5% protein content, bought at an estimated $338.77 a tonne FOB U.S. Pacific Northwest coast.
It also involved 11,875 tonnes of hard red winter wheat of a minimum 12.5% protein content, bought at $338.06 a tonne FOB, and 5,875 tonnes of soft white wheat of a minimum 8.5% and maximum 10% protein, bought at $279.25 a tonne FOB.
The purchase has an additional freight charge of $30.84 a tonne for ocean shipping from the U.S. Pacific Northwest coast to Taiwan, they said.
Seller of the northern spring and soft wheat was said to be trading house CHS.
The hard red winter wheat was said to have been sold by trading house United Grain Corporation.
That’s all, thank you.
We wish you a nice day.
Author: Sandro F. Puglisi
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