It was another down week.
Corn was higher while soybeans were down hard along with wheat, meal, canola and soy oil.
All commodities were flashing a sell signal a week or so ago, with further confirmation also this week.
Wheat dropped sharply in all three markets.
Indeed, Chicago SRW was down 4.7%, with KC HRW down 5.1%.
Minneapolis spring wheat sank 5.4% as rain covered key HRS areas from MT to MN.
Soybean futures plunged 60 cents per bushel in nearby July this week, a 3.8% loss.
Soy Meal was down 4.7% for the week.
Bean oil was down 3.1%.
Corn futures rallied 15 ¾ cents this week (+2.45%) after being pounded (-12%) the previous week.
On macro markets, energy futures also moved lower week over week, with crude oil tumbled more than 2.72% to move back litle above $63.5 per barrel.
Also diesel dropped about 2,73%.
Gasoline, meantime, fell about 2.35% lower on the week.
The Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials such as grains, coal and iron ore, dropped 8% on the week to end at 2,824.
Meantime, initial claims for US unemployment benefits fell 34,000 to a seasonally adjusted 444,000 for the week ended May 15, the Labor Department said.
That was the lowest since mid-March 2020 and held claims below 500,000 for two straight weeks.
Economists polled by Reuters had forecast 450,000 applications for the latest week.
Claims remain well above the 200,000 to 250,000 range that is viewed as consistent with healthy labour market conditions.
They have dropped from a record 6.149 million in early April 2020.
This was a signal to investors that the economy continues to move in the right direction.
Consequently, the cypto sector rebounded a litle bit, after the big selloff, with many of the NFT’s recovered some loss.
However, on Wall St., also the Dow has been on pace for weekly losses experiencing some downward volatility and felling by 165 points on the week to close at 34,153.
The U.S. Dollar Index decreased slightly from last week’s 90.31 to close at 90.01.
Coming back on grains market, US corn and soybean planting progress continued to see some good forward momentum this past week, per USDA’s latest crop progress report, covering the week through May 16.
Analysts were expecting to see more corn acres in the ground, but soybean progress was more in line with trade expectations.
On May 17 USDA reported U.S. winter wheat conditions at 48% good to excellent, dropping one point from last week.
The USDA also reported 53% of the winter wheat crop headed.
The annual Hard Red Winter Tour wrapped up on May 20.
Scouts participating in the tour reported record yield potential for the Kansas crop.
The U.S. spring wheat crop is 85% planted, far ahead of last year on this date.
The spring wheat crop is 47% emerged.
USDA’s latest batch of grain export inspection data, covering the week through May 13, held mostly positive news for traders to digest after corn, soybeans and wheat all notched moderate week-over-week gains. Corn volume stayed on the upper end of trade guesses, while soybeans and wheat exceeded the entire range of analyst estimates this past week.
Meantime, the latest round of grain export data from USDA, covering the week through May 13, held mixed data.
New crop corn sales came in very strong, as expected, and wheat also posted healthy totals this past week.
Soybean sales were muted, but that was also largely expected, given how low US domestic stocks are at this point.
Particulary, Thursday’s Export Sales report showed old crop wheat bookings of 120,991 MT, with 317,713 MT sold for shipment after June 1.
Export commitments are 98.6% of the full year forecast, matching the average pace after USDA lowered expectations.
Shipments are 90.5% of the full year forecast as of May 13.
The marketing year ends May 31.
About soybean export sales during the week of 5/6 were only 84,193 MT for old crop soybeans.
New crop sales were also weak at 96,000 MT.
Total old crop export commitments for the MY are now 99% of the USDA full-year forecast, compared to the 5-year average pace of 96% for this date.
Shipments have progressed to 91.8% of that projection vs. the 80% average pace.
Weekly US export sales commitments for new corn crop were record large at 4.06 MMT (160 million bushels!).
Total old crop commitments are now 96.5% of the full year WASDE estimate, vs. 92% average for this date.
Unshipped old crop sales commitments are both an opportunity and a liability, and 67% larger than last year at this time.
Rumors of additional Chinese new crop buying proved correct, with daily announcements for this week adding up to 5.644 MMT from China alone.
So, the next Export Sales report will show a new weekly forward sale record, barring cancellations.
Meantime, the large spec traders in CBT wheat futures and options added 1,007 to their CFTC net long position as of Tuesday, bumping it to 14,040 contracts.
In KC wheat, they cut another 5,899 contracts from their net long in the week ending 5/18 to bring it down to 26,100 contracts.
After being net short for more than two years in MPLS wheat, the managed money spec funds have now been net long that market since October, by 16,415 contracts as of May 18.
About soybean, Friday’s Commitment of Traders report showed managed money spec funds in soybean futures and options shrinking their net long position by 25,238 contracts in the week ending May 18.
They were still net long 152,584 contracts at that time (~763 million bushels).
Spec funds in corn futures and options trimmed their net long position by 25,311 contracts as of 5/18 to 291,025.
The net short commercial position stood at 627,938 contracts, a drop of another 46,025 on the week.
The process of emptying the bins and picking up the piles before harvest is underway.
In this context, all futures prices closed lower for the week, with exception of corn.
In fact, CBOT soft red winter (SRW) futures shed 53 cents to close at $6.74/bu. KCBT hard red
Winter (HRW) futures were down 27 cents to end at $6.24/bu.
MGE hard red spring (HRS) futures dropped 45 cents to close at
$7.00/bu.
CBOT corn futures gained 15 cents to end at $6.59/bu.
CBOT soybean futures shed 77 cents to close at $15.26/bu.
Gulf basis was higher this week as old crop stocks remain tight, and given dry conditions, farmers are unwilling to forward contract too much new crop wheat sales.
The PNW basis was lower due to light export demand limiting the need to draw wheat from farmers.
Corn basis bids were steady across most Midwestern locations Friday, but they did firm 3 cents at an Indiana ethanol plant.
Meantime, soybean basis bids tipped a penny higher at an Illinois river terminal while tumbling 16 cents lower at an Ohio river terminal and holding steady across most other Midwestern locations.
From South America, dryness in Brazil hasn’t changed much, with private estimates of the crop (and export potential) still shrinking.
However, Brazil’s Safras & Mercado once again raised its forecast for the country’s 2020/21 soybean harvest, bumping it up another 2.3% to reach 5.041 billion bushels.
That will be a record-breaking production for the country, if realized.
Also Brazil’s ABIOVE est country’s 2021 soybean harvest at 137.5MMT w/ exports reaching record of 85.6MMT.
Brazil’s private port terminals moved some 185 million tonnes of cargo in the first quarter, an 11% annual increase driven mainly by trade in mineral and agricultural commodities, data compiled by private port lobby group ATP showed on Tuesday.
Argentine growers have sold 18.5 million tonnes of soybeans from the current 2020/21 season, after clinching deals for 1.2 million tonnes over the last week alone.
However, a strike by port workers in Argentina left grain shipments paralyzed this week.
Port workers are demanding to be vaccinated against COVID-19.
The strike halted work on Wednesday and Thursday.
Labor groups threatened another walkout next week if the government and union leaders cannot reach an agreement.
The strike generated a total breakdown of logistics, causing congestion at anchorages and making it impossible for new ships to arrive at port to load,” according to a letter from the Argentinian Port and Maritime Activities Chamber.
In Europe, Germany’s 2021 wheat crop is expected to increase to around 22.66 MMT, said a German association of farm cooperatives.
The group previously predicted the crop to be 22.63 MMT.
The larger forecast is based on an increase in sown area reported Reuters.
Germany is the second-largest wheat producer in the EU.
In France, too, the growing conditions are reassuring.
FranceAgriMer notably maintains the “good to very good” wheat rate at 79%, against 75% on average.
Maize obtains this label at 93%, against 86% last year.
Coceral, a French grain trade association, raised its forecast for the European Union’s soft (non-durum) wheat production, citing excellent yield prospects in the Balkans and Spain.
Soft wheat production in the EU is projected at 130.9 MMT, 12% over last year’s 118.7 MMT crop.
Meantime, soft wheat exports from the European Union in the 2020/21 season that started last July had reached 23.44 million tonnes by May 16, data published by the European Commission showed on Monday.
That was down from 31.27 million tonnes cleared by the same week last season, the data showed.
Since Jan. 1, the European Commission’s data has covered the EU’s 27 countries only, whereas previous figures up to Dec. 31 covered both the EU-27 and Britain.
EU 2020/21 barley exports had reached 6.86 million tonnes, against 6.77 million a year ago, while EU 2020/21 maize imports stood at 12.81 million tonnes, down from 18.29 million.
Non-commercial market participants, meantime, lowered their net long position in Euronext’s milling wheat futures and options in the week to May 14, data published by Euronext on Wednesday showed.
Non-commercial participants, which include investment funds and financial institutions, reduced their net long position to 114,842 contracts from 145,178 a week earlier, the data showed.
Commercial participants lowered their net short position to 156,401 contracts from 169,572 a week earlier.
Commercials’ short positions accounted for 60.3% of the total short position, while commercial long positions accounted for 34% of total long positions.
Non-commercial short positions represented 39.7% of total short positions, while non-commercial net long positions accounted for 66% of the total longs.
The report covered almost all of the open short positions and all of the open long positions in the wheat derivatives.
In Euronext’s rapeseed futures and options, non-commercial market participants expanded their net short position to 7,277 contracts from 3,161 contracts a week earlier.
Commercial participants similarly increased their net short position in rapeseed to 1,375 contracts from 634 a week earlier.
In this context, Matif September wheat futures was 5,25 euros lower from last week, tumbled at €212,75/t.
Matif corn June futures gained 3,75 euros to closing the week at €254,75/t.
Matif rapeseed August futures, tumbled drammatically again by 23,00 euros ending the week at €524,75/t.
From North Africa, Egypt has procured 2.5 million tonnes of local wheat so far this season, the cabinet said in a statement on Monday.
The government has said it is expecting to procure a total of 3.4 million tonnes of local wheat from this year’s harvest, which began in April.
Turkey did not prolong zero imports levy as new crop harvesting started and they need to support local farmers.
For now it is: 200 usd referans price/25% corn/ 35% barley/ 45% wheat.
By the way, Turkey wheat imports could reach 10mmt 21/22.
From Black Sea basin, APK-Inform, a Ukrainian wheat analyst, left its grain forecast for Ukraine’s 2021 grain harvest unchanged.
APK-Inform forecasts the wheat harvest to reach 27.6 MMT; if realized, Ukraine’s 2021 wheat harvest would increase 11% compared to 2020.
In Ukraine, as of May 1, grain stocks totaled 9.5 mln tonnes by which, wheat 3.1 mln tonnes (up 8%), corn 5.4 mln tonnes (up 4%), barley 608.9 thsd tonnes (down 37%), rye 135.7 thsd tonnes (up 2.2 times) sunflower seed 2 mln tonnes (down 38%).
Ukrainian wheat export prices had risen $5 a tonne over the past week thanks to global upward trend, the APK-Inform agriculture consultancy said on Monday.
Bid prices for high-quality soft milling wheat were to $268-$275 a tonne FOB Black Sea port.
Feed wheat had gained $4 a tonne to $261-$269 FOB Black Sea.
APK-Inform also had said corn bid export prices had rosed by up to $11 over the past week to $281-$291 FOB, while bid prices for Ukrainian-origin barley had rosed by $6 to $244-$253 per tonne FOB Black Sea.
Next Monday, we will see how the market had closed this week.
The Agricultural Ministry of Russia forecasts the production of grains and pulses at 127.4 mln tonnes.
The Ministry has also announced a massive national wheat harvest again this year, at 80.7 Mt.
The export target is set at 51 Mt, an increase of 3 Mt compared to last year.
Russian spring grains are 69% planted :
According to the operative data, as of May 20, Russian farmers planted wheat throughout 8.2 mln ha (64.5%), barley – 5.9 mln ha (77%), corn – 2.3 mln ha (83%), rice – 116.1 thsd ha (60.5%).
Russian wheat export prices for the old crop were mostly stable past week, supported by a stronger rouble and lower wheat prices in Chicago and Paris, analysts said on Monday.
Russian wheat with 12.5% protein loading from Black Sea ports for supply in June was at $278 a tonne free on board (FOB) at the end of last week, unchanged from the previous week, the IKAR agriculture consultancy said.
Prices for the new crop, which will arrive this summer, were at $272 per tonne as of the end of last week, but IKAR expects them to decline soon.
Sovecon, another consultancy, said that wheat prices for the old crop rose by $1 to $275 a tonne, while barley was up $3 at $250 a tonne.
From the Middle Kingdom, China’s soybean imports from Brazil surged in April from the previous month, customs data showed on Thursday, amid the arrival of cargoes that were ordered earlier in the year but delayed after rain hit the Brazilian crop.
The world’s top importer of soybeans brought in 5.08 million tonnes of the oilseed from leading supplier Brazil in April, sharply up from only 315,334 tonnes in March, data from the General Administration of Customs showed.
But the figure was still below 5.939 million tonnes in the same month last year.
Chinese crushers stepped up purchases of soybeans earlier this year in expectation of increasing demand for animal feed from the steadily recovering pig sector. Rain, however, delayed the harvest and exports from the South American country.
Brazilian shipments to China in the first quarter plunged from the same period in 2020 as a result, with buyers turning to U.S. soybeans to fill the gap.
China bought 2.15 million tonnes of soybeans from the United States in April, more than three times the 665,591 tonnes shipped in same month a year ago, but well down from 7.18 million tonnes in March.
China’s corn imports in Apr total 1.85MMT bringing YTD total to 8.58MMT.
Apr imports were 109% higher v Apr 2020.
Apr wheat imports totaled 900KMT bringing YTD total to 3.83MMT.
Apr imports were 147% higher v Apr 2020.
Sorghum were 1.03MMT, up 448% YoY.
On May 12, 2021, China’s Ministry of Agriculture and Rural Affairs (MARA) notified the U.S. Embassy in Beijing that on April 28, 2021, China detected African Swine Fever (ASF) in Inner Mongolia Autonomous Region.
China is continuing to monitor the situation.
From India, this week were reported more coronavirus deaths in a single day than any other country at any time during the pandemic, while infections continued to spread through vast rural areas with weak health systems.
The Health Ministry reported a record 4,529 deaths in the past 24 hours, driving India’s confirmed fatalities to 283,248.
It also reported 267,334 new infections, as daily cases remained below 300,000 for the third consecutive day
Meantime, India’s soybean planting could rise by over 10% on record prices.
Farmers seen switching away from pulses, cotton.
Production depends on June-Sept monsoon rains, and an higher soybean output could limit Indian edible oil imports.
Watching next week market, the weekly US Export Inspections and US Crop Progress reports from USDA will be out on Monday, as will the monthly Cold Storage report.
On Wednesday, EIA will show weekly ethanol production and stocks data.
Fast forward to Thursday and we get the weekly Export Sales report.
Traders may very well take it easy on Friday, with the markets closed for Memorial Day the following Monday.
Dear all, have a good weekend.
