The big story this week was the USDA reports on Wednesday.
The Prospective Plantings report showed a total of 91.14 million corn acres intended to be planted this spring, slightly higher than last year but shy of the 93.1 million acre estimate heading into the report.
Soybean acreage expected at 87.6 million acres, 2.5 million short of estimates.
Producers are intending to plant (or already have) a total of 46.358 million acres of wheat, which was 1.4 million above estimates.
Most of that increase came via winter wheat, as NASS found a few more acres not in the Winter Wheat Seedings report in January, ~1.1 million more.
Spring wheat acres are seen at 11.74 million acres, in line with estimates.
Sorghum acres are expected at 6.94 million acres, above estimates and 1.06 million larger yr/yr.
March 1 corn stocks were tallied at 7.7 bbu, which was below most estimates and 250 mbu below last year.
Soybean stocks on hand, were tallied at 1.564 bbu, slightly below estimates and 690 mbu below last year.
Wheat stocks at the end of quarter 3 were seen at 1.315 bbu, nearly 43 mbu above estimates but down 101 mbu from last year.
However, after the bullish reaction of the markets at the March Prospective Plantings Report, USDA Chief Economist Seth Meyer was quick to offer this reminder to everyone who expected a different outcome: “This is an intentions report, it’s about prospective plantings,” Meyer told.
The March Prospective Plantings Report, indeed, provides only the first official, survey-based estimates of U.S. farmers’ 2021 planting intentions.
The NASS acreage estimates are based on surveys conducted during the first two weeks of March from a sample of nearly 80,000 farm operators across the nation.
Meyer also said the June report will provide more clarity on how many acres farmers actually plant and how those acres break out between crops.
The weekly Export Sales report put corn sales at 797,278 MT old crop and 60,000 MT for 2021/22 crop delivery.
Those 20/21 sales brough the shipped and unshipped sale total to 100% of USDA’s forecast.
Normally we would be 80% of that number at the beginning of April.
Exports are 51% complete of the WASDE projection, with the normal pace at 48%.
The report, also showed soybean bookings at 105,761 MT, with 131,000 MT reported for new crop delivery.
Total soybean export commitments for the MY now total 60.842 MMT.
That is still 99% of the USDA full year forecast, compared to the 5-year average pace of 89% for this date.
Shipments have progressed to 90% of that projection vs. the 74% average.
About wheat, report tallied 250,091 MT in old crop wheat bookings for the week of 3/25.
There was also 81,000 MT in new crop sales.
That brought the total wheat export commitments to 25.333 MMT, totaling 94% of the USDA projection, vs. the average pace of 100%.
Thursday’s Grain Crushing report showed 332.79 mbu of corn used for ethanol in February.
That was down 23.3% from last year, mainly due to the shutdowns during the cold spell later in the month.
While monthly crush data, indicated that 164.33 mbu of soybeans were crushed during February, with a drop foreshadowed by the earlier NOPA number.
In this context, corn futures clawed back 1.3% this week, despite only one day closing higher for May.
New crop December saw better action, up 18 cents from last Friday.
Soybean futures managed to squeeze out only a 1 ½ cent gain on the week, despite 70 cent gains on Wednesday.
Action on Thursday gave half of that back.
New crop contracts, understandably, saw more promise with a gain of 56 ½ cents.
Meantime, wheat futures were all lower again this week.
Chicago SRW slipped another 0.37% on the week.
KC HRW was down 0.57%.
MPLS spring wheat fell the sharpest, losing 2.36% on the week.
Going inside the numbers, indeed, all wheat futures prices continued to fell also on this week.
CBOT soft red winter (SRW) futures fell 2 cents to close at $6.11/bu.
KCBT hard red winter (HRW) futures lost 3 cents to end at $5.65/bu.
MGE hard red spring (HRS) futures dropped 1,4 cents to close at $5.99/bu.
CBOT corn futures gained 7 cents to end the week at $5.59/bu.
CBOT soybean futures lifthed only 1,5-2 cents to close the week at $14.02/bu.
On European market there was an extremly volatility with a session yesterday which erased all the gains of the day before.
Really the operators have would wanted to limit their positions before the long weekend of 4 days, since the markets will be closed until Tuesday in Europe.
But the bullish data provided by Prospective Plantings Report for 2021, jumped all grain prices.
However, Wednesday’s rebound did not last and all European quotations suffered steep losses during Thursday’s session, with the improvement that has been of very short duration.
It was rapeseed which once again showed the most important movements, with a May maturity on Euronext which shows movements considered to be not very rational.
Rapeseed, indeed, suffered heavy losses on Thursday evening, with a close contract (the last of the campaign) which fell by € 20 / t (!) To fall below € 500 / t for the first time in a month.
Corn also fell back with the prices deemed too high compared to wheat, suggesting higher wheat consumption than expected, to the detriment of maize, in the livestock feed sector.
Wheat on its part, lossed all gains took the day before.
In particular, European wheat fell completely to its lowest level since last December!
In addition to pressure from Chicago, the straw cereal continues to be pulled down by lower international demand and production prospects for 2021 for the moment very good.
In spite the return to purchases from Algeria, the tender would have ended with the purchase of 480 kt of milling wheat at an average price of $ 279 / t C & f, against $ 323 / t C&F processed in the previous case of March 10.
In this context, Euronext ended the week continuing on a note mainly lower, with the exception of corn prices.
Indeed, Matif May wheat futures prices fell 5,5 euros to end at €209,25/t.
Matif rapeseed May futures, tumbled 12,25 euros to end at €494,00/t.
Matif corn June futures gained only 0,75 euros to close at €214,25/t.
From China, the Middle Empire, released 2 million tonnes of rice from state reserves for sale to feed producers this week to bolster supplies of feed grains amid elevated corn prices, said three sources close to the matter.
The country’s corn prices hit record highs early this year on supply concerns raised by dwindling stocks and reduced output.
Particulary, China on Wednesday sold between 1.4 million and 1.5 million tonnes of rice – about 70% of the total volume put up for sale – for feed use.
The base price was at 1,500 yuan ($228.62) a tonne, the three sources said, much lower than current corn prices that range between 2,700 and 3,200 yuan a tonne.
So, China’s corn futures prices fell 10% after they hit record high levels in January this year, pressured by imports of feed grains while feed producers stepped up purchases of wheat and rice as alternatives.
China had planned to sell wheat and rice from state reserves to animal feed producers as early as July last year to tame surging corn prices.
“China’s rice, and wheat inventories are both at historically high levels and can meet more than one year’s consumption demand,” he told reporters.
From South American area, about corn, it will be necessary to monitor the climatic conditions in Brazil with little rains observed for the moment and expected for the next 15 days, raising fears of a negative impact on yields, especially after late sowing.
Datagro is now estimating a total 2020/21 brazilian corn production of 4.303 billion bushels, which is slightly below the group’s prior projection of 4.316 billion bushels.
They still has one of the most aggressive 2020/21 soybean estimates out there, offering a latest prediction of 4.978 billion bushels.
Most other entities are assuming a production of at least 4.8 billion bushels this season, however.
Meanwhile, in Argentina, the Buenos Aires Stock Exchange posted a harvest of 7.9%, and an estimated production of 45 million tonnes.
Soybeans harvests in Argentina are starting and the local stock exchange shows an estimate of production at 44 million tonnes, against 47.5 still posted by the USDA.
Higher grain prices have been a boon for Argentina’s farmers, who reaped $2.77 billion in agricultural exports last month – an 18-year high.
Argentina is the world’s No. 3 corn exporter and leads all nations in soymeal sales.
From the Black Sea basin the Russian Agriculture Ministry has started testing the mechanism for calculating grain price indices which will then be used as the basis for setting floating grain export taxes from June 2.
Reference prices will be calculated by the National Mercantile Exchange.
Ukraine’s 2020/21 ending stocks are expected to rise 17% year-over-year, thanks in large part to surging corn stocks, which bumped 51% higher to 94.5 million bushels.
High prices have slowed export sales in recent weeks.
Total corn exports are unlikely to surpass 945 million bushels this season.
Meantime, on week 13, freight rates in the Azov-Black Sea region continue to fall.
According to Sea Lines shipbrokers, contracts for 3K wheat parcels from the Sea of Azov to Marmara are concluded at the level of $18 per ton.
Due to the sharp fall of the Turkish lira, the conclusion of new contracts with Turkish buyers has been almost completely suspended, as a result, a very small number of cargo remains on the market.
In addition, this week, some Turkish consignees, due to the current difficult economic situation in the country, failed to meet their contract obligations and pay for cargo, which led to vessels detention in Turkish ports, Sea Lines report.
In general, the demand for Russian wheat in the global grain market is declining, and so are the prices for it. In addition, the domestic market is still unstable and traders have so far been unable to agree on the purchase rate of cargo from the fields.
This week, navigation in the southern parts of the Russian river begins, which will mean activation of shipments from Marmara ports to the Caspian, as well as fertilizers flow from the Caspian basin countries to the Black and Marmara Seas.
On week 13, freight rates for 3,000-5,000 dwt bulkers from the port of Azov declined.
According to Sea Lines, freight rates from Azov made $16 to the Black Sea, $18 to Marmara, $30 to Mersin and $36 to Egypt.
Freight rates from Rostov AB (after bridge) are $1 above, from Rostov BB (before bridge) the same, from Yeisk and Taganrog $1 below, and from Temryuk $3 below those from the port of Azov.
In the Caspian, freight rates also moved downwards.
On week 13, freight rates for shipping corn by 3,000 dwt bulkers to Iran made $17 from Aktau, $20 from Makhachkala, and $22 from Astrakhan.
On the international trade scenario, Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), set a tender on Thursday to buy an unspecified amount of wheat from global suppliers for shipment Aug. 1-10.
Tenders should reach GASC by noon (1000 GMT) on Tuesday, April 6, and must remain valid for 24 hours.
Wheat bids should be free on board, with a separate freight offer.
GASC said it will pay for the grain with “at sight” letters of credit.
For the current tender, GASC is seeking to buy 55,000- to 60,000-tonne cargoes of the following: U.S. North Pacific soft white wheat; U.S. hard red winter wheat; U.S. soft red winter wheat; Russian milling wheat; Ukrainian milling wheat, and Australian standard white wheat.
GASC is also seeking 60,000-tonne cargoes of the following: Canadian soft wheat; French milling wheat; German milling wheat; Argentine bread wheat; Polish milling wheat; Kazakh milling wheat;
Romanian milling wheat; Bulgarian milling wheat; Serbian milling wheat; Hungarian milling wheat, and Paraguayan milling wheat.
South Korea, for its part, bought 65,000 t of wheat from the USA yesterday.
The grain is for shipment between July and August.
Saudi Arabia issued a tender to buy 10.8 million bushels of wheat for shipment between May and June to meet an uptick in domestic demand.
Watching next week market, Monday traders will come back after a 3-day weekend following a crazy week of price movement.
The week starts off with the Export Inspections report on Monday, with NASS releasing the initial Crop Progress report of 2021.
The holiday delayed weekly Commitment of Traders report is expected on Monday.
Monday is also first notice day for April Live Cattle futures deliveries.
Skip ahead to Wednesday, and EIA will release another round of ethanol production and stocks data.
We will also receive monthly trade data from Census at mid-week.
Thursday morning will show the weekly Export Sales report.
To round out the week on Friday, USDA will release the monthly WASDE update, taking into account the changes from Wednesday’s Grain Stocks report.
EUROPEAN MARKETS ARE CLOSED UNTIL NEXT TUESDAY on the occasion of the Easter holidays.
We wish you a good Easter holiday.
AMERICAN MARKETS WILL BE OPEN REGULARLY ON MONDAY.
GOOD WEEKEND TO ALL.
