Good morning, Farmer Family …
US farm markets were mixed on Monday.
Corn prices ended unchanged, with July printing a 6 1/4 cent range on the day.
Soybeans eased 0.19% lower.
The rest of the soy complex was mixed, with soymeal lifting 0.19%, while soyoil lost almost 1.25%.
Wheat prices were mixed but mostly higher, as Chicago SRW fell 0.95%, while Kansas City HRW rose 1.35%, and MGEX HRS added 0.93%.
Ukraine deal expires May 18, but still no agreement to extend Ukrainian export shipping was reached.
Moscow has threatened to quit the agreement, while Turkey and the United Nations (UN) are working to extend it.
Meantime, the pace of shipments from Ukraine has slowed, on concerns ships get stuck if the deal will not renewed.
The UN said no ships were inspected on Sunday or Monday under the deal.
That supported wheat prices, also underpinned by signs U.S. hard wheat crops would not been in as good condition as hoped.
Corn was also reacting to the concern about the Ukrainian shipping deal.
Meanwhile, soybeans were seeing buying interest partly on concerns about South American supplies.
Concerns over Argentine soybean crop, indeed, continued, that could be even smaller than feared.
Thus, the market continued to watch how much soybeans Argentina imports from Brazil for its own crushing needs, after Brazilian soybean export premiums had reached their lowest level.
Meantime, USDA’s weekly Export Inspections report showed 963.4k MT was exported for the week that ended 5/4.
That was a 37% drop from last week and was down 35% from the same week last year.
That brought the season’s total export to 24.867 MMT (979 mbu) through 5/4.
That remains 35% behind last year’s pace.
As for soybean, USDA reported 394,755 MT of soybeans were exported during the week that ended 5/4.
That was down 23% from last week and was 22% below the same week last year.
The season’s total inspections reached 47.855 MMT compared to 47.76 MMT last year.
As for wheat, export inspections data showed 209,138 MT of wheat shipments for the week that ended 5/4.
That was down from 358k MT last week and from 263k MT during the same week last year.
The full season’s total reached 18.5 MMT through 5/4, compared to 19.03 MMT last year.
In this context, corn basis bids shifted 10 cents lower at an Illinois river terminal while holding steady elsewhere across the central U.S. on Monday.
Soybean basis bids held steady across the central U.S..
Commodity funds were net sellers for 2,500 lots of corn, 2,000 lots of soybeans and 2,000 lots of wheat.
After the sessions close, the weekly NASS Crop Progress report showed corn planting advanced 23% points to 49% complete as of 5/7.
The 5-yr average pace would be 42% planted as of 5/7.
Emergence was reported at 12% compared to 6% last week and 11% on average.
As for soybean, the report had 35% of the new crop beans planted by 5/7.
That compares to 19% last week and the 5-yr average of 21%.
NASS had soybean emergence at 9% nationally compared to 4% on average.
As for wheat, the report showed MN began planting spring wheat, now 7% done compared to 34% on average.
Nationally, 24% of the new crop was planted by 5/7, up 12 ppts for the week and 14 ppts behind the average pace.
NASS marked 5% of the spring wheat crop as emerged compared to 11% on average.
The weekly update also showed 38% of the winter wheat crop was headed, 3% points ahead of the 5-yr average pace.
U.S. winter wheat conditions improved by 1 percentage point to 29% in the past week, but less than expected, despite rains in key growing areas.
That matched 2022 as the lowest good-to-excellent rating for this time of year since 1996.
On this morning, Chicago soybean, wheat and corn prices lost ground.
Rapidly progressing U.S. planting boosted expectations of bumper production and weighing on prices.
Notably, the most-active soybean contract on the Chicago Board of Trade (CBOT) was down 0.31% to 14.31 a bushel, as of 10:00 GMT, and corn dropped 0.59% to $5.93 a bushel, wheat lost 0.8% to $6.48-1/3 a bushel.
Meantime, traders are looking forward May WASDE report.
Friday’s World Agricultural Supply and Demand Estimates will offer the agency’s first look into the 2023 crop supply and demand.
The May WASDE presents results of the government’s first survey of winter wheat farms to assess yields and harvested acres.
In energy markets, oil prices rose with Brent crude settling up $1.71, or 2.3%, at $77.01, while U.S. West Texas Intermediate (WTI) crude also gained $1.82, or 2.6%, to $73.16.
Brent had finished last week with a decline of about 5.3% while U.S. crude plunged by 7.1% even after Friday’s rebound.
Both benchmarks were down for three weeks in a row for the first time since November.
Oil’s rebounded after the U.S. reported strong job data, which eased concerns about an imminent economic recession.
The market also is less worried about a banking crisis that could lead to a recession and hurt demand.
Also supporting oil prices, Alberta declared a state of emergency over the weekend in response to wildfires that have displaced nearly 30,000 people and prompted energy producers to shut in at least 185,000 barrels of oil equivalent per day (boepd), about 2% of Canada’s output.
Also, oil’s recent drop looked excessive.
U.S. consumer price inflation figures for April will be in focus on Wednesday, potentially influencing the Fed’s stance on future interest rate decisions.
OPEC’s latest monthly oil market report is due on Thursday, providing an updated reading on the demand and supply outlook.
In equity markets, US stock indexes settled mixed, despite higher bond yields weighed on the overall market along with the ongoing debt ceiling stalemate.
Notably, the 10-year T-note yield rose +7.5 bp to 3.512%.
The two-year Treasury, which moves more on expectations for Fed action, rose to 3.99% from 3.92%.
President Biden is scheduled to meet House Speaker McCarthy and other congressional leaders Tuesday to discuss the debt ceiling.
Meantime, energy stocks moved higher after crude prices rallied, and cybersecurity stocks also gained, both supporting overall market.
In this context, on Wall Street, the S&P 500 edged up by less than 0.1% to 4,138.12, coming off its worst week in nearly two months.
The Dow Jones Industrial Average slipped 0.2% to 33,618.69 while the Nasdaq composite added 0.2% to 12,256.92.
On this morning, Asian shares traded mixed.
Japan’s benchmark Nikkei 225 gained 1.0% to finish at 29,242.82.
But other regional benchmarks fell.
Australia’s S&P/ASX 200 slipped 0.2% to 7,264.10.
South Korea’s Kospi shed 0.1% to 2,510.06.
Hong Kong’s Hang Seng lost 2.1% to 19,867.58, after new data on China’s trade showed declining imports.
The Shanghai Composite dropped 1.1% to 3,357.67.
Notably, Chinese exports grew 8.5% in April, showing more unexpected strength despite weakening global demand, according to customs data.
Exports grew to $295.4 billion compared with a year earlier, although at a slower pace, building on momentum seen in the March data when exports rose 14.8%.
But imports shrank at a faster pace, with the total slumping 7.9% to $205.2 billion compared to the same time last year, according to data Tuesday from the General Administration of Customs.
It was down 1.4% in March.
Trade with the U.S. and European Union showed a contraction in comparison with last year.
China’s trade surplus in April widened, growing 82.3% compared to the same period last year.
In currency trading, the dollar index rose by +0.15%, recovering early losses and posting moderate gains on higher T-note yields.
The Federal Reserve’s Senior Loan Officer Opinion Survey reported tighter standards and weaker demand for commercial and industrial loans in Q1, which was bearish for the U.S. economy.
The proportion of U.S. banks tightening terms on loans for medium and large businesses rose to 46% from 44.8% in Q4 of 2022.
Also, the proportion of banks reporting stronger demand for commercial and industrial loans dropped by -55.6% in Q1, the sharpest decline since 2009.
On the other hand, the Eurozone May Sentix investor confidence unexpectedly fell -4.4 to a 4-month low of -13.1, weaker than expectations of an increase to -7.5.
German Mar industrial production fell -3.4% m/m, weaker than expectations of -1.5% m/m and the biggest decline in a year.
Monday’s Japanese economic news was supportive for the yen after the Japan Apr Jibun Bank services PMI was revised upward by +0.5 to 55.4 from the initially reported 54.9.
In this context, the EUR/USD fell by -0.15%, while the USD/JPY rose by +0.26%.
Losses in the yen were contained after Monday’s decline in the Nikkei Stock Index to a 1-week low boosted safe-haven demand for the yen.
On this morning, the U.S. dollar inched down to 134.86 Japanese yen from 135.04 yen.
The euro cost $1.0981, down from $1.1008.
From Canada, ahead of the next Statistics Canada report, which will be released today, analysts think the agency will show Canadian wheat stocks at 14 MMT through March 31.
That would be a year-over-year increase of nearly 25%, if realized.
From South America, Brazil’s grain exporting agency ANEC estimates May soybean exports at 12.08Mt, up from 10.27Mt in the same month last year, with meal exports estimated at 2.2Mt, up from 1.89Mt in May 2022.
Corn exports of 324kt would be down significantly from the 1.09Mt exported in May last year.
However, forward sales of Brazil’s second corn crop hit 24.3% of the expected production of 92.2 million tonnes, according to a survey by agribusiness consultancy Safras & Mercado that reflects slow farmer selling for this time in the season.
Lower prices and uncertainty related the weather have weighed on farmer sentiment, Safras said citing the risk of frosts affecting part of the fields in some states, though weather forecasts do not indicate they will.
Second corn planting, which occurs after soybeans are reaped, occurred later than normal this year because of delays in the soybean harvesting.
In May of 2022, Brazilian second corn crop sales were 31% of the expected production while the historical average for this time of year is 32.6% of projected output, according to Safras data.
In Europe, wheat prices fell after reaching a one-week high on Friday.
Corn followed suit lower.
Rapeseed, meantime, continued to show a very high volatility falling more than 4% on the day.
Public holidays in France and Britain have meant many market participants were absent.
Some traders were focused on cheap prices for Russian wheat offered internationally.
Black Sea wheat stocks are looking large, especially in Russia and Romania.
Moldova will face a shortage of storage capacity for its 2023 grain harvest if it doesn’t ban imports of Ukrainian grain and oilseeds, the Moldovan farmers’ union said on Monday.
Official data showed that 300,000 tonnes of Moldovan-origin grain from the 2022 harvest was still in silos, while a new harvest would arrive in about one and half month.
Moldova harvested 720,000 tonnes of grain in 2022.
Last week the European Union set restrictions until June 5 on imports of Ukrainian wheat, maize, rapeseed and sunflower seed to Bulgaria, Hungary, Poland, Romania and Slovakia after those countries cited concerns that Ukrainian grain meant for export to other countries has ended up in their local markets.
From a climatic point of view, the rains of recent weeks have enabled to post a generally satisfactory crop rating at this stage.
After a relatively dry February, most of Europe’s grain-growing regions saw soil-moisture deficits eliminated and water reservoirs replenished following extremely beneficial and timely rainfall throughout March and April.
The only exceptions are Spain and northern Italy, with the former largely drought-declared and the latter extremely dry.
According to the April report from the European Union’s Joint Research Centre unit, Monitoring Agricultural ResourceS (JRC MARS), the EU crop escaped relatively unscathed from a series of cold spells across much of the continent in early March and early April, with crops in most regions now enjoying ideal growing conditions with adequate soil moisture and slightly warmer than average spring temperatures.
Notably, JRC MARS decreased EU-27 soft wheat production in 2023-24 from 131.7 million tonnes in its March update to 131.17Mt in April, up 3.3 percent on 2022-23 output.
This was on the back of a slight reduction in yield from 5.99 metric tonne per hectare in March to 5.96t/ha last month, but it still sits 3pc above the five-year average.
The planted area was unchanged compared to March at 21.99 million hectares but is up a smidgen year-on-year from 21.90Mha.
Durum wheat production saw a minor month-on-month increase in the projected yield from 3.53t/ha to 3.54t/ha, putting total EU-27 production 6.4pc higher year-on-year at 7.6Mt.
Total barley production across the EU-27 was cut from 54.15Mt to 52.64Mt off a projected planted area of 10.7Mha, following a significant downward revision to spring barley yields in Spain, the EU’s biggest spring barley-producing nation.
The average barley yield dropped from 5.06t/ha in March to 4.92t/ha in the latest report, but the spring barley yield estimate was slashed by 6.9pc from 4.34t/ha to 4.04t/ha, 4pc below the five-year average.
On the other hand, winter barley yields received a slight upward adjustment to 5.93t/ha.
Rapeseed is the dominant winter oilseed crop across the EU, expected to make up almost 60pc of total oilseed production in 2023/24.
Output is currently forecast at 20Mt, 2.4pc higher than 2022-23, off a planted area of 6.05Mha, 3.1pc higher than the previous season.
The sunflower seed crop is forecast at 10.47Mt, 14.2pc higher year-on-year and 31.4pc of total EU oilseed production in 2023-24.
However, the production prognosis is not so rosy for Spain, where winter and spring crops across all regions are suffering under the burden of severe moisture stress.
The drought has reportedly engulfed more than 60pc of the country and caused permanent losses to over 3.5Mha of dryland winter crops.
Notably, JRC MARS is calling Spain’s soft wheat production from this year’s harvest 4.95Mt, down from 5.39Mt last year and 7.46Mt in 2021.
The barley picture is very similar, with 2023-24 production forecast at 6.04Mt, down from 6.62Mt in 2022-23 and 8.86Mt the season prior.
In northern Italy, winter crops are struggling due to a lack of moisture, but the country’s production outlook is largely unchanged at this stage.
French farmers have been experiencing above-average rainfall and warmer-than-usual temperatures through March and the first half of April, with drier-than-average conditions closing out the month.
As a result, French soft wheat conditions crept lower in the week to May 1.
French national establishment for agriculture and sea products However, FranceAgriMer still estimated 93pc of the crop was rated good-to-excellent, down from 94pc a week earlier but well above the 89pc recorded in the same week last year.
The durum wheat good-to-excellent rating also fell 1pc to 88pc, against 83pc a year earlier.
Total wheat production is forecast at 35.96Mt this harvest, up 2.6pc from 35.02Mt last harvest.
The winter barley crop in France bucked the wheat trend coming in 1pc higher at 92pc good-to-excellent compared to 86pc on the same date in 2022.
The spring barley crop conditions were unchanged at 96pc in the top rating bracket, against 88pc in early May last year.
JRC MARS pencilled total barley production 2.2pc higher year-on-year at 11.64Mt.
The new season rapeseed crop is sailing along very nicely, with production forecast to be up slightly compared to 2022-23 to 4.56Mt.
Regular rainfall events through March and April have consolidated winter crop production in Germany, but the exceedingly wet fields did delay the spring and summer crop planting program.
The upcoming harvest is forecast to produce 22.33Mt of wheat, down from 22.59Mt in 2022-23.
Forecast barley output is almost unchanged at 11.18Mt, and the rapeseed crop is up 5.4pc to 4.53Mt.
The winter crop conditions across most of Poland have been particularly favourable this year, but the spring planting campaign has been dogged by wet and cold weather.
JRC MARS inked 2023/24 season wheat, barley and rapeseed production at 13.47Mt, 3.5Mt and 3.37Mt, respectively, off planted areas of 2.6Mha, 840,000 hectares and 1.05Mha.
Meantime, economic growth does not seem to be there at the global level, which raises fears among financial operators who are therefore abandoning the commodities sector.
From North Africa, Egypt’s supply ministry reported that its strategic wheat reserves are sufficient for the next 4.1 months.
From Ukraine, reconstruction ministry accused Russia of effectively stopping a critical deal that allows safe passage in the Black Sea because it is refusing to register incoming vessels.
According to the ministry, 90 ships are in Turkey’s territorial waters waiting to return to Ukrainian ports.
Meantime, rapeseed production in Ukraine may once again reach record levels. According to the updated APK-Inform assessment, the harvest of the oilseed in Ukraine in 2023 may amount to about 3.5-3.6 mln tonnes.
“Despite the 9% reduction in the planting areas under rapeseed, the harvesting area may increase by 8%, according to the preliminary forecast”, APK-Inform analysts noted.
For now, the APK-Inform forecast for rapeseed exports in 2023/24 MY is optimistic and amounts to about 3.3-3.4 mln tonnes (-3% year-on-year).
From the Middle Kingdom, China imported 7.26 million tonnes of soybeans in April, customs data showed on Tuesday, down 10% on the same period a year earlier.
The sharp drop was attributed to a stricter clearance process for soybeans that began in April, delaying discharging of the cargoes for up to two weeks, analysts and traders said.
The change to customs procedures has not been publicly announced.
However, arrivals for the first four months came to 30.29 million tonnes, up 6.8% from the same period in 2022, the data showed.
From Australia, local values started the week lower and liquidity moved across the port zones.
Buyers and sellers continued to readjust prices and parcels continued to trade.
Canola bids were up slightly to start the week.
Eastern Australian canola prices were firmer by A$5-6/t. Wheat and barley values for current crop remained steady.
According to ABS data Australia exported 778kt of barley in March down 18pc from February.
The top three markets were Saudi Arabia (285kt), Vietnam (115kt) and The Philippines (60kt).
Agronomists and growers across southern NSW, Victoria and eastern South Australia are noting high burdens of slugs, both the grey field and black keeled slugs.
The slugs are particularly damaging in broadleaf crops such as canola and pastures, but can also cause damage in cereal crops in high numbers, mainly in high rainfall zones.
The mild summer and wet autumn has allowed numbers to explode with growers urged to monitor for slugs and bait them.
On the international trade scene, Algeria’s state grains agency OAIC has issued an international tender to buy soft milling wheat to be sourced from optional origins.
The tender sought a nominal 50,000 tonnes but Algeria often buys considerably more in its tenders than the nominal volume sought.
The deadline for submission of price offers in the tender is Wednesday, May 10, with offers having to remain valid until Thursday, May 11.
The wheat is sought for shipment in two periods from the main supply regions including Europe: July 1-15 and July 16-31.
If sourced from South America or Australia, shipment is one month earlier.
Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 125,974 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on Thursday.
Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 tonnes of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa.
The deadline for submission of price offers in the tender is Wednesday, May 10.
Price offers are being sought for one consignment of yellow corn of between 40,000 to 65,000 tonnes at a premium over the Chicago September 2023 corn contract CU3.
Shipment is sought between July 3 and July 22 if the corn is sourced from the U.S. Gulf, Brazil or Argentina.
If sourced from the U.S. Pacific Northwest coast or South Africa, shipment is sought between July 18 and Aug. 6.
Due to concerns over poor quality, Argentine corn will only be accepted if it is at least 4 cents per bushel below the second cheapest offer from other origins.
That’s all, thank you.
We wish you a nice day.
Author: Sandro F. Puglisi
To read more, register on https://marketplace.bancadelgrano.it/
