US grain prices were mixed this week, as a lot of news has come, pushed the markets up and down, more than once over the week.
First of all US crop progress condition.
Corn quality eroded four points lower, and spring wheat ratings took a five-point tumble, while winter wheat ratings firmed two points higher for the week ending June 6.
USDA also offered an initial glimpse into soybean quality ratings, which were three points below the average trade guess.
Corn quality, moved from 76% rated in good-to-excellent condition down to 72% through Sunday.
Another 23% is rated fair (up three points from last week), with the remaining 5% rated poor or very poor among the top 18 production states (up one point from last week).
More 90% of the crop is emerged, up from 81% a week ago.
That’s also better than 2020’s pace of 87% and the prior five-year average of 82%.
Each of the top 18 production states is past the halfway mark by now, with Pennsylvania (68%) the farthest behind so far.
Soybean planting progress reached 90% through Sunday, in line with analyst expectations and up from the prior week’s mark of 84%.
It’s also moving along at a faster clip than 2020’s pace of 84% and the prior five-year average of 79%.
Emergence reached 76%, compared to the prior week’s mark of 62% and much faster than the prior five-year average of 59%.
USDA’s first look at soybean quality ratings were lower than expected.
Analysts offered an average trade guess of 70% rated in good-to-excellent condition prior the report, but the agency showed 67% of the crop with those ratings.
Another 27% of the crop is rated fair, with the remaining 6% rated poor or very poor.
Spring wheat plantings are complete for this year, with 90% of the crop now emerged.
That’s up from 80% a week ago and faster than both 2020’s pace of 79% and the prior five-year average of 86%.
Spring wheat quality is on its heels, meantime, dropping five points to 38% of the crop rated in good-to-excellent condition.
Analysts were anticipating a three-point drop.
Another 37% of the crop is rated fair (unchanged from last week), with the remaining 25% rated poor or very poor (up five points from last week).
Winter wheat quality improved two points, in contrast, with half of the crop now rated in good-to-excellent condition.
Analysts expected USDA to hold ratings steady from a week ago, when 48% was rated good-to-excellent.
Another 32% is rated fair (down a point from last week), with the remaining 18% rated poor or very poor (also down a point from last week).
Physiologically, 85% of the winter wheat crop is now heading, up from 79% last week and just behind the prior five-year average of 86%.
Harvest nationwide is on the board with 2%, although only five of the top 18 production states have made measurable progress so far.
The prior five-year average is 7%.
EIA ethanol data was been out on Wednesday, regulary.
For the week ending June 4, ethanol production scaled up by 33,000 barrels per day (b/d), or 3.2%, to 1.067 million b/d, equivalent to 44.81 million gallons daily and the highest level since February 2020.
Production was 27.5% above the same week last year, which was affected by the pandemic, but it was 2.6% below the same week in 2019.
The four-week average ethanol production volume lifted 2.2% to 1.036 million b/d, equivalent to an annualized rate of 15.88 billion gallons (bg).
Ethanol stocks grew to 20.0 million barrels, 1.9% above the prior week and a five-week high.
Stocks were 8.4% below the year-ago level and the same week in 2019.
Meantime Thuersday morning USDA’s weekly Export Sales report showed 189,589 MT of old crop corn bookings from the week ending 6/3.
Paired with the 1.6 MMT of shipments, old crop commitments were 69.3 MMT (2.728 bbu).
USDA reported 15,673 MT of old crop beans were booked for export on the week ending 6/3.
That was the lowest weekly sale since the 92k MT net cancellation reported for the week ending 4/1.
There were 278,687 MT of beans shipped, bringing MYTD shipments to 57.744 MMT (2.122 bbu).
New crop soybean bookings were reported at 105k MT this week, bringing the forward book to 7.555 MMT.
This week’s wheat commercial sales for marketing year 2021/22 were up significantly from last week to 325,900 metric tons (MT), in line with trade expectations of 200,000 MT to 450,000 MT.
Year-to-date commercial sales for delivery in 2021/22 total 5.5 MMT, 5% behind last year’s pace.
USDA expects the total 2021/22 U.S. wheat exports to reach 24.5 MMT, 9% below last year, if realized.
Thuersday in the afternoon, June’s WASDE report was released.
The report was supportive for corn and neutral for oilseeds.
For winter wheat, the report was bearish.
Smaller US old-crop corn stocks were the main surprise in the report.
USDA cut 150 million bushels off that total, undercutting trade expectations.
Brazil’s corn crop was cut as expected but the trade looked for a lower total.
Global wheat production was raised several million tonnes, and mainly for major exporters including the US, EU, Russia, and Ukraine.
US HRW production was raised by 40 million bushels but white wheat production was trimmed.
USDA boosted its forecast for EU rapeseed production, which was a surprise, but still sees the EU importing over six million tonnes for next year.
Brazil’s old-crop bean production was raised one million tonnes and US use was cut marginally, adding to the old-crop supplies but the situation remains tight overall for oilseeds.
To close the week, the U.S. EPA annunced on Friday that is looking into ways it can provide relief to oil refiners who say they are under strain from current biofuel blending mandates.
Consequentially, RIN credits that are currently trading at all-time highs, on the wake of fears that these mandates may be relaxed jostled, was down 15% from the previous session, to trade from $2.00 at $1.70 each.
Meantime, Friday’s Commitment of Traders report showed spec funds getting less bullish on corn, trimming 14,337 contracts from their net long in corn futures and options in the week ending 6/8.
That put them net long 275,599 contracts, well below the peak position of 401,993 net long held on April 13.
Spec traders in CBT wheat futures and options cut 4,601 contracts from their CFTC net long position in the week ending 6/8, returning to a net bearish 1,374 contracts.
In KC wheat, they added 627 contracts to their net long during the week to bring it to 19,713 contracts.
Weekly Commitment of Traders data showed managed money spec funds in soybean futures and options added 2,695 contracts to their net long position in the week ending June 8.
They were still net long 141,483 contracts at that time.
Spec funds in soy oil had held their biggest net long position since April 27 on June 1, at 86,084 contracts.
They reduced it by 4,764 contracts in this latest reporting week.
In this context, July corn futures gained only 1 ¾ cents for the week, as there was double digit decline on Friday.
December corn was up 19 1/2 cents per bushel for the week.
Wheat futures were mixed.
KC HRW eked out at 0.24% gain.
Minneapolis was 11.7% the previous week but lost 5.9% this week as rain of varying intensity swept across the major growing areas.
Chicago was down 1%.
Soybean futures sank 4.8% this week, more than 75 cents per bushel for the nearby July futures.
November futures were up 5 ¼ cents for the week.
Index funds were rolling out of July all week.
Soy Meal was down 3.3% for the week, with bean oil down 6.1%.
That was the main reason for the soybean weakness.
Palm oil was also down.
Going inside the numbers, CBOT soft red winter (SRW) futures shed 7 cents to close at $6.80/bu.
KCBT hard red winter (HRW) futures were up only 2 cents to end at $6.38/bu.
MGE hard red spring (HRS) futures dropped 50 cents to close at $7.60/bu following some rain this week.
CBOT corn futures gained only 2 cents to end at $6.84/bu.
CBOT soybean futures shed 75 cents to close at $15.08/bu.
Corn basis bids dropped 4 cents at an Iowa processor Friday but held steady elsewhere across the central U.S..
Soybean basis bids tumbled as much as 27 cents lower at an Ohio river terminal while softening 2 to 5 cents lower at three other Midwestern facilities.
Wheat basis in the Gulf was up slightly from last week, but export inquiries remained light ahead of harvest.
In the Pacific Northwest (PNW), soft wheat basis was up significantly due to low old crop supply and slow farmer selling as dry weather continues.
As we can see, right now, the grain markets are focused on areas that have received rain and those who have not.
Therefore, trade’s focus now will be on weather and the June 30 Acreage report.
Meantime, IHS Markit Agribusiness lowered its forecast for 2021 U.S. corn plantings, moving from a May estimate of 96.849 million acres down to 96.539 million acres.
That is still significantly higher than USDA’s March planting intentions report, which predicted 91.144 million acres.
IHS Markit Agribusiness, in contrast, increased its estimates for 2021 U.S. soybean acres from 88.485 million acres in May up to 89.065 million acres.
That’s well above USDA’s March estimate of 87.6 million acres.
USDA will update this number on June 30.
On macro markets, oil prices reached fresh multi-year highs on Friday, closing out a third straight week of gains on an improved outlook for worldwide demand as rising COVID-19 vaccination rates help lift pandemic curbs.
Brent crude futures settled at $72.69 a barrel, rising 17 cents after reaching their highest since May 2019.
For the week, Brent was up 1%.
U.S. West Texas Intermediate (WTI) crude futures settled at $70.91 a barrel, up 62 cents, settling at their highest since October 2018.
WTI was up 1.9% on the week.
The International Energy Agency (IEA) said in its monthly report that the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, would need to boost output to meet demand set to recover to pre-pandemic levels by the end of 2022.
U.S. investment bank Goldman Sachs said it expects Brent crude prices to reach $80 per barrel this summer as vaccine rollouts boost global economic activity.
Data showing road traffic returning to pre-COVID-19 levels in North America and most of Europe was encouraging.
Even the jet fuel market is showing signs of improvement, with flights in Europe rising 17% over the past two weeks, according to Eurocontrol.
In an indication of future supply, U.S. oil rigs rose by six to 365 this week to their highest since April 2020.
It was the biggest weekly increase of oil rigs in a month.
Investors, meantime, remain wary that inflation is moving at its swiftest pace since 2008.
The number of Americans filing new claims for unemployment benefits fell last week to the lowest level in nearly 15 months, while consumer prices increased solidly in May as the pandemic’s easing grip on the economy continues to boost domestic demand.
The recovery from the COVID-19 recession is also being fueled by massive fiscal stimulus and record-low interest rates, straining supply chains.
Initial claims for state unemployment benefits, indeed, fell 9,000 to a seasonally adjusted 376,000 for the week ended June 5.
That was the lowest since mid-March 2020 when the first wave of COVID-19 infections barreled through the country, leading to closures of nonessential businesses.
Claims have now declined for six straight weeks.
The Labor Department said its consumer price index increased 0.6% last month after surging 0.8% in April, which was the largest gain since June 2009.
There were also increases in food prices.
In the 12 months through May, the CPI accelerated 5.0%.
That was the biggest year-on-year increase since August 2008, and followed a 4.2% rise in April.
The jump partly reflected the dropping of last spring’s weak readings from the calculation.
These so-called base effects are expected to level off in June.
Economists had forecast the CPI rising 0.4% in May and vaulting 4.7% year-on-year.
Federal Reserve Chair Jerome Powell has repeatedly stated that higher inflation will be transitory and will have no impact on monetary policy.
Meantime, on Wall St. the Dow slid 263 points lower week over week trading to 34.479, the S&P 500 gained 17 point for the week closing at 4.245, the Nasdaq composite jumped by 303 points, to close the week at 14.069.
The U.S. Dollar Index increased slightly from last week’s 90.15 to close at 90.59.
The Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials such as grains, coal and iron ore, gained 8% on the week to end at 2,669.
Watching next US week market, Monday is Flag Day, an officially recognized holiday since 1916, instituited by the President Woodrow Wilson, however, it isn’t a federal or market holiday.
The weekly Export Inspections and Crop Progress reports will be in their normal Monday release slots.
Monday also marks the expiration of the June hog futures and options.
The monthly NOPA crush report is expected on Tuesday.
The Fed (FOMC) is meeting Tuesday and Wednesday.
EIA ethanol data will be out on Wednesday, with USDA weekly Export Sales data out on Thursday.
From South America, Mexico is holding up import permits for GMO corn.
The government intend to apply a GMO ban to the grain used in animal feed despite contrasting comments by a top U.S. official.
If the prohibition on GMO corn is implemented, it would dramatically upend the current multibillion-dollar grains trade between the United States and Mexico, forbidding some 16 million tonnes of annual U.S. yellow corn exports to its southern neighbor, nearly all of it GMO.
Buenos Aires Grains Exchange reported 37.8% of the corn crop has been harvested so far.
The yields from late-planted fields in the province of Cordoba have been above expectations.
The exchange increased its 2020/21 corn crop projection to 48 million tonnes from 46 million previously as compared to the USDA at 47 million.
Argentina’s bean harvest is nearly finished at 98.9% complete, and the production forecast was held steady at 43.5 million tonnes.
The Rosario Exchange expects a 2020/21 soy crop of 45 million tonnes and a 50 million tonne corn harvest.
Meantime, according to the Agriculture MinistryArgentine farmers have sold 20.9 million tonnes of soybeans from the 2020/21 season, after transactions were registered over the last week for 863,600 tonnes, with data updated through June 2.
The rhythm of Argentine soybean sales is slower than the previous year’s, when by this point in the season 24.4 million tonnes of the oilseed had been sold, according to official data.
Argentine corn sales of 29.7 million tonnes of this season’s corn crop have been registered so far, 3 million tonnes more than had been done by this point last season.
The first shipments of Argentine corn have begun to arrive in Brazil to where a national crop failure, record high prices and high demand from the meat industry has made companies such as BRF Brasil Foods SA and JBS SA turn to imports.
Brazil’s Conab, meantime, estimated Brazil’s 2020-21 soybean crop at 135.86 MMT, a modest increase from its May forecast.
USDA raised its Brazilian soybean crop forecast by 1 MMT to 137 MMT.
In this context, as for June 10, Argentina Wheat Grade 2, (Up River) was at $273 at the end of the week, losing 3$ from prior week.
Also Argentina corn feed fell 2$ for the week, closing at $262.
Brazil corn feed (Paranagua) was at $297, dropping 1$ during the week.
Argentina barley feed, unchanged at $260.
Argentina soybean tumbled drammatically by 15$ to close at $545.
Brazil soybean fell 13$ finishing the week at $562.
From the European market, the condition of French soft wheat improved slightly in the week to June 7, data from farm office FranceAgriMer showed on Friday, suggesting a warm spell was benefiting crops in the European Union’s biggest grain producer.
An estimated 81% of French soft wheat was rated good or excellent in the week to June 7, up from 80% the previous week, FranceAgriMer said in a cereal crop report.
That compared with just 56% in the corresponding week last year, when France went on to harvest one of its smallest crops in years.
After declining in April amid dry, cold weather, cereal crop ratings stabilised last month as widespread rain fell, and now appeared to be getting a boost from warmer temperatures.
Among other cereals, good/excellent ratings for spring barley and durum wheat both rose by 2 points, to 86% and 70% respectively, while the scores for winter barley and grain maize were unchanged on the week, at 76% and 91% respectively.
In this context, Franch farm ministry on Tuesday projected a 19% jump in winter barley production.
The warm spell is also expected to help reduce lagging crop development after the chilly start to spring.
Soft wheat crops were running about a week behind their usual growth pace, however, the warm wheater is helping crops to accelerate the grow.
Per the latest data from the European Commission, 2020/21 EU corn imports have reached 13.56 million tonnes, through June 6, against 18.89 million last year to date: a year-over-year decrease of 28.2% so far.
European Union soybean imports for the 2020/21 marketing year have reached 523.2 million bushels through June 6, tracking fractionally below last year’s pace so far.
EU canola imports are up slightly year-over-year, meantime, and EU soymeal imports are moderately behind the prior year’s pace.
European Union soft wheat exports for the 2020/21 marketing year have reached 24.71 million tonnes through June 6, against 33.27 last year to date.
That’s a year-over-year decrease of 25.7% so far.
EU barley exports are trending fractionally lower than last year’s pace, with 7.02 million tonnes.
France, the European Union’s biggest grain producer, is expected to produce 7.74 million tonnes of winter barley in 2021, up 19.3% compared with last year’s crop.
In tis forecasts for 2021 harvests, the ministry projected the winter rapeseed crop at 2.95 million tonnes, down 9.2%.
Meantime, Consultancy Strategie Grains on Thursday raised its monthly forecast for the 2021 soft wheat harvest and exports from the European Union next season due to improved competitiveness on the world market but lowered them for the current season.
It also lifted its EU 2021 barley and maize crop outlook, supported by good weather conditions.
Since last month, forecast for EU-27 soft wheat exports has increased by 1.6 million tonnes to reflect the very good competitiveness of Bulgarian and Romanian wheats and, to a lesser extent, Baltic, German and Polish wheats on early 2021/22 contracts.
Strategie Grains expects 2021 EU soft wheat production at 131.1 million tonnes, up from 129.6 million in May and 119.4 million last year.
EU soft wheat exports in 2021/22 were now pegged at 28.6 million tonnes, up from 27.0 million projected last month.
That was now well above the 26.9 million tonnes EU wheat exports projected for this season, an estimate that was lowered by 600,000 tonnes this month.
The consultancy agency, however, did not give a reason for the change.
For barley, Strategie Grains lifted its estimate for the 2021 EU harvest by 300,000 tonnes to 53.9 million tonnes.
It slightly raised its forecast of EU maize production by 100,000 tonnes to 65.3 million tonnes.
The start of the maize development cycle was sluggish but plant growth is now taking place amid good conditions almost everywhere.
On this weake, following favorable weather, Bulgaria’s agriculture minister said that their wheat crop might increase 20% compared to 2020.
The ministry forecasts Bulgaria’s wheat crop at between 5.6 MMT and 5.8 MMT.
From UK, Britain’s wheat imports slowed in April but are still running well above last season’s pace, customs data showed on Friday.
Wheat imports for the month totalled 155,832 tonnes, down from 187,044 tonnes in March.
Estonia was the largest supplier in April, shipping 32,020 tonnes followed by Denmark with 27,059 tonnes.
Cumulative imports since the start of the 2020/21 season, which began on July 1, 2020, totalled 2.04 million tonnes, up from 916,801 tonnes in the same period a year earlier.
Germany remains Britain’s largest supplier so far in the 2020/21 season with shipments of 515,535 tonnes.
Imports are expected to climb this season after the nation’s wheat harvest totalled just 9.66 million tonnes last summer, a drop of 40.5% from the previous year.
Per latest data published by Euronext on Wednesday, non-commercial market participants increased their net long position in Euronext’s milling wheat futures and options in the week to June 4.
Non-commercial participants, which include investment funds and financial institutions, expanded their net long position to 66,938 contracts from 60,757 a week earlier, the data showed.
Commercial participants lowered their net short position to 110,351 contracts from 116,691 a week earlier.
Commercials’ short positions accounted for 62.9% of the total short position, while commercial long positions accounted for 46.2% of total long positions.
Non-commercial short positions represented 37.1% of total short positions, while non-commercial net long positions accounted for 53.9% of the total longs.
The report covered all of the open short and long positions in the wheat derivatives.
In Euronext’s rapeseed futures and options, non-commercial market participants increased their net short position to 12,119 contracts from 10,594 a week earlier.
Commercial participants extended their net long position in rapeseed to 6,267 contracts from 2,242 a week earlier.
In this context, Matif September wheat futures was 3,50 euros lower from last week, reaching to €211,25/t.
Matif corn August futures gained 7,00 euros to closing the week at €261/t.
Matif rapeseed August futures, tumbled 20,75 euros ending the week at €516,75/t.
From North Africa, the lowest price offered in the international tender from Tunisia’s state grains agency on Thursday to purchase 50,000 tonnes of soft milling wheat was believed to be $297.75 a tonne c&f for optional-origin supplies.
The lowest offer was believed to have been submitted by trading house Promising international for the full 50,000 tonnes in two 25,000 tonne consignments.
This was followed by offers from trading house Viterra at $299.97 per tonne c&f and $301.97, both for 25,000 tonnes.
Other offers were all said to be over $300 a tonne including $304.88 and $304.98 a tonne c&f.
The agency purchased at $297.75 a tonne c&f, all from Promising international.
The wheat is sought in two 25,000 tonne consignments for shipment between July 1 and July 25 depending on origin supplied.
Algeria’s state grain office has barred a 33,000-tonne durum wheat shipment from Canada from entering the eastern port of Annaba port, for non compliance with agreed specifications.
Meantime, Algeria’s state grains agency OAIC has purchased 480.000 tonnes of optional-origin milling wheat in an international tender which closed on Tuesday.
Estimates of purchase price were still around $297.50 and $298 a tonne c&f.
The wheat was sought for shipment in two periods from the main supply regions including Europe: Aug. 1-15 and Aug. 16-31. If sourced from South America or Australia, shipment is between July 1-15 and July 16-31.
Large proportion of the purchase will be sourced in Germany and other suppliers in the Baltic Sea region.
Purported sellers, in alphabetical order: 90 KMT BUNGE; 60 KMT CAM; 60 KMT CARGILL; 30 kt INVIVO; 60 KMT OLAM; 60 KMT SOUFFLET; 120 KMT VITERRA (formerly known as Glencore!).
Egypt’s state commodities purchasing agency, GASC, said on Tuesday it bought some 60,000 tonnes of soyoil and 40,000 tonnes of sunflower oil in an international tender.
GASC gave no details on prices.
However, traders said the soyoil was all bought at $1,299 a tonne c&f with 30,000 tonnes bought from trading house ADM and 30,000 tonnes from Cargill.
Traders also said the sunflower oil was all bought at $1,368 a tonne c&f, with 30,000 tonnes purchased from Cofco and 10,000 tonnes from ADM.
The oils were sought for arrival in Egypt between Aug 1-20 with payment in 180 days.
From Black Sea basin, Ukrainian farms have almost completed the 2021 spring grain sowing, seeding 7.46 million hectares, or 99%, of the expected area, as of June 10, agriculture ministry data showed on Friday.
The ministry has said that favourable weather could help Ukraine to harvest at least 75 million tonnes of grain this year, versus 65 million tonnes in 2020.
The ministry said the overall grain area is likely to total 15.5 million hectares this year, including 7.6 million hectares of spring grains.
The ministry also has said the 2021 area for sunflowers could total 6.4 million hectares, soy beans 1.4 million hectares and sugar beet 226,900 hectares.
Meantime, Russian agriculture consultancy Sovecon said on Friday that it had raised its forecast for Russia’s 2021 wheat crop by 1.5 million tonnes to 82.4 million tonnes.
The forecast was raised after rains in May improved the condition of winter wheat in the southern region, the largest wheat producing and exporting region.
The estimate was also raised due to a speedy spring wheat sowing campaign and improved weather conditions for spring wheat in Russia’s central and Volga regions, it added.
Russia has set out its grain export taxes also for June 17-22 last Friday.
Wheat Barley Maize (Corn) – $ per tonne
June 17-22: – tax 33.3 39.6 48.2 – indicative price 247.7(W) – 241.7(B) – 253.9 (M);
June 9-16: – tax 29.4 39.6 50.0 – indicative price 242.0 (W) – 241.7 (B) – 256.5 (M);
June 2-8: – tax 28.1 39.6 52.2 – indicative price 240.2 (W) – 241.7 (B) – 259.7 (M).
Russia, the world’s largest wheat exporter, launched its formula-based duty for grain exports from June as part of other measures the government hopes will help to stabilise domestic food inflation.
The size of the duty is determined by the agriculture ministry on a weekly basis, based on price indicators traders are reporting.
USDA Black Sea numbers, have seen, Russian Wheat production at 86 mmt (1 mmt); Russian Wheat Exports at 40 mmt (0 mmt).
Ukraine Wheat production at 29.5 mmt (0.5 mmt); Ucraine Wheat Exports at 20.5 mmt (0.5 mmt).
About corn USDA forecasted Russia corn production at 14.9 mmt (0 mmt); Russian con exports at 4.1 mmt (0 mmt).
Ukraine corn production its expected at 37.5 mmt (0 mmt); Ukraine corn exports at 30.5 mmt (0 mmt).
Kazakhstan’s Minister of Agriculture has announced the end of sowing operations with 22.7Mha planted, a slight increase of 78,000 ha over last year.
The area of the main crop, wheat, remained stable year on year at 12 Mha.
The barley area is 2.7 Mha.
From India, the Indian government, through the Ministry of Consumer Affairs, Food, and Public Distribution, has procured a record amount of wheat from local farmers for the 2021/22 marketing year.
As of June 6, the ministry has purchased 416 MT of wheat, up 7% compared to 2020/21.
India, meantime, has stepped up corn exports as a rally in global prices to their highest since 2013 has made shipments from the South Asian country competitive, easing concerns about rising food inflation in Southeast Asia.
Indian exporters have signed deals to sell around 400,000 tonnes of corn for shipment in June to July to animal feed producers in Vietnam, Malaysia, Sri Lanka and Bangladesh, according to two Singapore-based feed grain traders.
Cheaper corn supplies from India would keep the cost of animal feed lower for consumers of meat and chicken in Asia, who are among the most vulnerable to high food prices.
Indian corn is being quoted at $295-$300 a tonne, including cost and freight (C&F), for sale to Southeast Asia as compared with $330 a tonne, C&F, for South American corn, the two trading sources said.
Indian supplies are much cheaper for South Asian markets than shipments from Latin America or the United Sates because of lower prices and freight.
The country has exported around 900,000 tonnes of corn in the first five months of 2021, compared with 136,454 tonnes during the same period a year ago.
From the Middle Kingdom, China lowered estimates for the use of corn in feed consumption in 2020/21, as increased imports of grains and ample supplies of domestic wheat and rice have replaced some corn in feed, the country’s agriculture ministry said on Thursday.
China’s has bougth so much corn that its ports are getting clogged ships have been waiting for as long as a month to unload.
China’s 2020/2021 corn consumption in feed was seen at 182 million tonnes, down 3 million tonnes from the forecast in the previous month, according to a statement published on the website of the Ministry of Agriculture and Rural Affairs.
Estimates on output, planting acreage and imports of corn in the 2021/22 year remain unchanged from a month ago, according to the ministry.
Chinese State Reserve, meantime, plans to sell 100k of soybeans by mid-June.
Considering significant stocks of soybeans in farmers and traders and low demand, domestic price of soybeans may decrease even more.
Meantime, China’s state planner said on Wednesday it plans to boost the role of state reserves in stabilising hog production and pork prices, after a more than 50% plunge in pork and hog prices since the beginning of the year.
China’s pork industry is recovering from an outbreak of the deadly African swine fever virus that devastated the hog herd during 2018 and 2019, but prices this year have fallen far more steeply than expected.
Current hog prices of about 15.6 yuan ($2.44) per kilogramme are below the break-even point for many farmers.
The risk is very high and the markets are quite volatile.
Consequntially, the National Development and Reform Commission (NDRC) said in a statement it plans to improve the way its pork reserves operate to help stabilise hog production and pork prices.
China has held an undisclosed volume of frozen pork for years.
However, according to some analist, reserve are too small to significantly influence the market.
Consequentially, the NDRC said it would significantly increase its stocks but did not give further details.
Meantime, it will also set up an additional temporary reserve that will play a more active role in setting prices by buying from the market when prices fall too low and releasing stocks when supplies become tight.
South Korea’s Major Feedmill Group (MFG) has purchased about 65,000 tonnes of animal feed wheat which can be sourced from optional origins in a tender which closed on Friday.
The wheat was bought at an estimated $313.00 a tonne c&f plus a $2.50 a tonne surcharge for additional port unloading.
Seller was believed to be trading house CHS.
The grain is for shipment between July and August.
From Australia ABARES on Tuesday raised its wheat production forecast during the 2021/22 season by 11.2% from a forecast three months ago after rains across several major growing regions improved the prospects for yields.
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said it now expects production during the season ending June 30, 2022 to total 27.8 million tonnes. The bureau’s previous forecast in March had been 25 million tonnes.
Yield prospects in most cropping regions in New South Wales, Western Australia and much of Queensland are very favourable given the favourable conditions at the beginning of the winter crop season and the outlook for winter rainfall.
However, while the rains across Australia’s east coast has aided grain production, it has also led to a so-called mouse plague that has destroyed some acreage.
ABARES, meantime, said recent cold weather will relieve the plight on farmers.
A bumper Australian wheat harvest is likely to ease supply concerns among key importers in Asia and the Middle East.
Meanwhile, ABARES also lifted its forecast for barley and canola production.
Barley production is now expected to total 10.4 million tonnes – up from its March estimate of 8.8 million tonnes.
Australian growers are expected to harvest 4.2 million tonnes of canola, up from the 3.5 million tonnes forecast in March.
The wheat number from the national forecaster represents a 17-per-cent drop from the record 33.3Mt crop grown last year, while the expected barley tonnage is down 21pc from last year.
In contrast, canola production is expected to rise 4pc.
Area planted to wheat is forecast to increase by 1pc to around 13.1 million hectares (Mha), while barley area at 4.2Mha is seen as down 4pc on last year.
Canola area is forecast to increase 25pc to almost 3Mha, Australia’s third-highest canola planting on record.
While dry conditions in South Australia have reduced its canola area from last year, increases have been seen in all other states.
Area planted to canola is expected to be boosted by favourable world prices and excellent planting conditions in Western Australia and New South Wales.
WA and NSW are Australia’s two biggest canola-producing states, and WA canola area is seen as up 35pc from last year, while NSW canola area is forecast to have risen 27pc.
In this context, ASX wheat July contract down A$3.5/t for the week to close at $305.5/t.
Eastern Australia Feed Barley closed at $255/ton.
WA Wheat WK future closed at $322/ton.
In Sicily, the wheat harvest continues.
The quality is excellent and above average with a percentage of protein higher than 12.50%.
The test wheigt is also good above 80 Kg/Hl.
The average yield per hectare drops slightly from 2.8 to 2.7 tons per hectare.
Good luck everyone and have a good weekend.
