Good morning, Farmer Family …
UK and US markets were closed for public holidays, on Monday.
On this morning, Chicago wheat slid more than 1%.
Corn and soybeans also inched lower.
Notably, the most-active wheat contract on the Chicago Board of Trade (CBOT) was down 1.1% at $6.09-1/4 a bushel, as of 01:20 GMT.
Corn fell 0.3% to $6.02-1/4 a bushel and soybeans slid 0.5% to $13.30-1/2 a bushel.
Export prices of Russian wheat are softening further in anticipation of a new big harvest and amid low demand from global importers.
In the corn market, plentiful supplies from Brazil weighed on prices, with Brazil’s total corn production in 2022/23 now expected to hit 127.4 million tonnes.
The U.S. Department of Agriculture is expected to issue a weekly update on corn and soybean planting progress and its first condition ratings of the season for the corn crop later overnight after the sessions close.
Meanwhile, the government has projected supplies of both crops will rise sharply in the coming year due to forecasts for record harvests.
Thus, weather conditions over the next few weeks will be closely watched, as July is crucial for corn pollination.
On the other hand, heavy rain has flooded wheat fields in China’s central Henan province, just days ahead of the harvest.
That pushed up prices, raising concerns about the quality of this year’s crop.
From South America, Brazil’s total corn production in 2022/23 is expected to hit 127.4 million tonnes, agribusiness consultancy AgRural said on Monday, raising its April estimate of 125.1 million tonnes as growers start to harvest their second crop.
Harvesting of “safrinha” reached 0.8% in Brazil’s center-south region as of last Thursday, slightly below the 1.2% reported in the same period a year ago, AgRural said.
Work in the field is still concentrated in top grain producing state of Mato Grosso, according to the consultancy, which added it will make a new output forecast in second half of June.
In Europe, markets were quiet yesterday, with wheat prices, however, giving up some ground amid favourable weather conditions and the competitiveness of Russian origins.
The European Commission is reportedly considering extending the temporary ban on grain imports from Ukraine into five neighbouring states following their decision on Thursday to extend the duty-free import regime for Ukraine for another year.
“With Ukraine, the adoption of the new autonomous trade measures for another year, we have a legal basis indeed for a possible extension of exceptional safeguards,” Executive Vice-President of the European Commission and Commissioner for Trade Valdis Dombrovskis said at a press conference.
“We have signaled the Commission’s readiness to make an extension with the five state members concerned, and we are in discussion with those member states and Ukraine on this topic” he added.
Rapeseed prices, meantime, slipped in the wake of canola.
From the Middle East, Iraq’s government said the country areas cultivated with wheat this year were double to some 8.5 million danams (850,000 hectares) compared to roughly 4 million (400,000 hectares) last year.
Agriculture ministry spokesperson Mohammad Al-Khuzai said that has translated into a harvest of around 4 million tons of wheat.
That was the largest in years and 80% of country needs.
Large institutions have bought into the shift to desert wells, turning the desert into a green oasis, however, an agricultural official noted that the water table had sunk between 12 to 15 metres (39.4-49.2 ft) since last season.
From Ukraine, the spring planting campaign in Ukraine is planned to be fully completed by June 10.
According to Taras Vysotskyy, First Deputy Minister of Agrarian Policy, currently, the planting plan, set at 13 mln ha, has already been fulfilled by 85%.
He also clarified that the planting of early spring crops (wheat, barley, peas, oats) has already been completed.
The planting of late crops — sunflower seeds, soybeans, and corn — is currently underway.
Weather conditions in May helped to quickly make up for what was delayed by rains in April, and reach average planting rates.
This year the planting area under oilseeds will increase year-on-year.
“This is primarily connected with logistics cost and, accordingly, changing of crop rotation to crops that have a higher price,” explained the first deputy minister.
Meantime, according to the State Statistics Service, in the current season, as of May 29, Ukraine exported 44.919 mln tonnes of grains and pulses, including 3.033 mln tonnes in May, reported the press service of the Ministry of Agrarian Policy of Ukraine.
Last season, as of May 31, the total export of Ukrainian grains reached 47.011 mln tonnes, including 1.142 mln tonnes in May.
In particular, in 2022/23 MY Ukraine exported:
– wheat – 15.378 mln tonnes (980 thsd tonnes in May);
– barley – 2.627 mln tonnes (162 thsd tonnes);
– rye – 17.9 thsd tonnes (0);
– corn – 26.582 mln tonnes (1.884 mln tonnes).
As of May 29, the total export of flour from Ukraine amounted to 140.5 thsd tonnes (12.8 thsd tonnes in May), including wheat flour – 135.1 thsd tonnes (12.3 thsd tonnes).
From Russia, as of May 25, 24.6 million hectares of crops were sown, compared to 22.3 million hectares by that date in 2022, of which 11.1 million hectares were under spring wheat (9.6 million hectares in the same period of 2022).
Although there is growing concern about crop conditions in Siberia and the Urals, it’s a bit too early to get too concerned.
As a result, export prices of Russian wheat softened further.
Notably, according to the IKAR, the prices of Russia’s new wheat crop with 12.5% protein content, delivered free on board (FOB) from the Black Sea, was assessed at $230 a tonne compared to $242 a tonne from the previous week for the old crop.
Ditto for the other products.
Price for domestic 3rd class wheat, European part of Russia, excludes delivery, indeed, was at 11,100 rbls/t, -25 rbls/t (Sovecon).
Price for sunflower seeds was at 21,500 rbls/t, -400 rbls/t (Sovecon).
Price for domestic sunflower oil was at 68,675 rbls/t, -1,175 rbls/t (Sovecon).
Price for domestic soybeans was at 30,400 rbls/t, -200 rbls/t (Sovecon).
Export price for sunflower oil was at $740/t, -$40/t (IKAR).
Price for white sugar, Russia’s south, was at $756.44/t, +$11.81 (IKAR).
In spite that, Russia exported 1.07 million tonnes of grain last week.
That is compared to 1.21 million tonnes a week earlier, including 0.97 million tonnes of wheat compared to 1.07 million tonnes a week earlier, according to port data.
In this context, Sovecon estimates that total Russian wheat exports in May will reach 3.8 million tonnes.
That, however, is compared to 1.2 million tonnes in May 2022 and 1.5 million tonnes on average.
Meantime, Russia warned again the West on Monday that the Ukraine export deal would cease unless a United Nations agreement aimed at overcoming obstacles to Russian grain and fertiliser exports was fulfilled.
“If everything remains as it is, and apparently it will, then it will be necessary to proceed from the fact that it the deal is no longer functioning,” Russian Foreign Minister Sergei Lavrov said during a visit to Nairobi when asked if the Black Sea deal should be extended again.
Lavrov, who has visited the African continent at least three times this year, said that less than 3% of the 30 million tonnes of grain exported under the Black Sea deal had reached the world’s poorest countries.
He said that Russia had agreed to give away around 300,000 tonnes of Russian fertiliser stuck in European ports.
Russia’s Uralchem-Uralkali Group said on Monday that a consignment of 34,000 tonnes of fertilisers for Kenya had reached the port of Mombasa.
The shipment, comprising potash, urea and NPKS, is currently being unloaded, it said.
It was Uralchem’s second donation from fertiliser stuck in European ports and warehouses.
A 20,000 tonne load of complex fertiliser was handed over to Malawi in early March.
From the Middle Kingdom, heavy rain has flooded wheat fields in China’s central Henan province, just days ahead of the harvest, raising concerns about the quality of this year’s crop.
China is expected to harvest a bumper crop this year, with officials estimating a crop at least as large as last year’s.
However, the rain is supporting prices to some extent.
The wheat price in Henan’s capital Zhengzhou, indeed, rose 2% last week to 2,740 yuan ($396.41) per tonne on Friday.
More rain is forecast for this weekend in western Henan, according to China’s Meteorological Administration.
($1 = 6.9121 Chinese yuan renminbi).
From Australia, Aussie markets also started the week sluggish, with wheat and barley values largely unchanged.
Canola showed some current crop gains of $15-18/t which saw growers chip out some more stock for sale.
Australian Crop Forecasters pegged 2023-24 wheat production at 27.9mmt, barley at 10.5mmt.
“We’ve got total winter-crop area largely unchanged after a good start in most states saw seeding start early,” ACF senior insights manager James Maxwell said.
“Wheat and barley areas are similar to last season, but canola area is back 7 percent, in part due to lower prices but also the drier outlook.”
ACF has used 10-year average yields to generate production forecasts.
Mr Maxwell said production appears to have some downside based on the forecasts indicating below-average in-crop rainfall.
That’s all, thank you.
We wish you a nice day.
Author: Sandro F. Puglisi
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