US farm markets with exception to the wheats, finish the month of July on a bearish note.
KC wheat futures led the week higher, with gains of 4.22%.
CBT was up 2.89% on the week.
MPLS was less of the leader this week, with futures clawing back 2.41% from last week.
Soybean futures managed to bounce just 13 ¾ cents this week (+0.98%) however better than last week’s losses.
Soy Meal was down 0.28% for the week.
Soybean oil was just 0.24% higher.
While some volatility left the corn market this week, with futures down just a tick from last Friday’s close.
On macro markets, oil prices posted weekly gains with demand growing faster than supply, while vaccinations are expected to alleviate the impact of a resurgence in COVID-19 infections across the globe.
Brent crude futures for September, has expired on Friday.
The more active Brent contract for October was up 0,4 cents, or 0.05% to $75.14 per barrel.
For the week posted a 1,26% higer.
U.S. West Texas Intermediate (WTI) crude futures gained 1 cents, or 0.14%, to $73.72 a barrel, whittling down a 1.7% rise from Thursday but remaining a 2,15% higer compared prior week.
The Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials such as grains, coal, and iron ore, increased 3% on the week to end at 3,292.
On the financial side, Asian shares fell on Friday, extending their biggest monthly drop since the height of global pandemic lockdowns last March on lingering investor concern over regulatory crackdowns in China on the education, property and tech sectors.
Losses deepened even after reassurances from Chinese regulators and official media that helped to soothe investors’ nerves a day earlier, and following indications from the U.S. Federal Reserve that its bond-buying programme will remain unchanged for now.
The U.S. economy grew past pre-pandemic levels in the second quarter, though the expansion fell short of expectations.
Lower-than-expected revenue reported by Amazon.com Inc on Thursday, and the company’s forecast of slower sales growth in the coming quarters weighed on U.S. stock futures.
Consequentially, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.12%, taking its losses for the month to more than 7%.
Japan’s Nikkei dipped 1.80%, its 11th straight month of falls on the last trading day in the month.
Chinese blue-chips fell 1.65%, and Hong Kong’s Hang Seng fell 1.35%, with tech stocks once again dragging.
The Hang Seng Tech index shed more than 2,56%, deepening its fall for the month to more than 16%.
Seoul’s Kospi fell 1.24%.
Euro Stoxx 50 futures fell 0.67%, German DAX futures fell 0.61% and FTSE futures slipped 0.60%.
Nasdaq e-mini futures slid 0.71% and S&P 500 e-minis were down 0.54%, the Dow Jones was down 0,42%.
The U.S. Dollar Index decreased at 91.968.
The euro closed the week down at $1.1879.
Coming back on grains market, hot, dry weather persisted in the Plains and Pacific Northwest while expanding to the Midwest, where soil moisture remains favorable. Drought concern ahead of planting eased some in Kansas, eastern Colorado and parts of Nebraska as well.
Washington and Montana continue to see the worst impacts of the extended drought, with soil moisture 99% and 97% short or very short, respectively.
Meantime the weekly Crop Progress report as of July 26 showed the US corn crop was 79% silking, 6% faster than normal, with 18% in the dough stage.
Condition ratings slipped 1% point to 64% gd/ex, with the Brugler500 down 3 at 363.
About soybean, NASS Crop Progress data showed 76% of the US soybean crop was blooming, with now 42% setting pods, both ahead of the normal pace.
Condition ratings slipped 2ppts to 58% gd/ex, with the Brugler500 index down 3 to 354.
About wheat, USDA reported 84% of the U.S. winter wheat crop harvested, three points ahead of the 5-year average of 81%.
The U.S. spring wheat crop conditions declined this week with 9% rated good to excellent, down from 11% last week and 70% from last year.
The annual Wheat Quality Council spring wheat tou rwrapped up this week.
The tour reported an average HRS yield of 29.1 compared to 43.1 in 2019 after an extended period of hot, dry weather this year.
USDA reported over half of the crop is in poor to very poor condition.
The USDA also reported 97% of the U.S. spring wheat crop headed, even with the 5-year average.
The Brugler500 index score dropped to 212, down 8 points from the previous week.
Weekly export sales data showed old corn crop bookings at net reductions for the second week in a row at -115,200 MT for the week of July 22.
That is not out of the ordinary for this time of year, but does not make it any easier to hit the USDA export projection.
Total commitment of shipped and unshipped sales are still 96% of that USDA forecast vs. the 102% average.
New crop sales picked up to 529,300 MT for the week.
About soybean weekly export data tallied net reductions of 79,300 MT for old crop soybeans, with new crop sales of 312,800 MT.
Total soybean export commitments for 20/21 are still 100% of the USDA projection, vs. the 103% average for this date.
Old crop sales still to be shipped are down 60% from year ago at 2.8 MMT.
About wheat US commercial sales of 515,200 MT were up 9% from last week’s 473,200 MT and on the high end of trade expectations of 350,000 MT to 600,000 MT.
Year-to-date commercial sales for delivery in 2021/22 total 8.1 million metric tons (MMT), 16% lower than last year at the same time.
USDA expects total 2021/22 U.S. wheat exports will reach 23.8 MMT, 12% lower than last year, if realized.
Commitments of shipped and unshipped sales are now 34% of USDA’s projected number, 3% points below the normal pace.
EIA data showed a 14,000 barrel per day reduction in ethanol production for the week ending 7/23.
Average daily production was still above the 1 million bpd mark at 1.014 million.
Stocks rose another 215,000 barrels to 22.733 million.
Friday’s CFTC report indicated spec funds adding another 4,707 contracts to their net long in corn futures and options as of Tuesday.
That took them to a net long 228,009 contracts on 7/27.
For soybean, Weekly Commitment of Traders data indicated managed money spec funds trimming 1,823 contracts from their net long position for the week ending July 27.
That took them to a net long 94,051 contracts of futures and options on Tuesday afternoon.
About wheat, the weekly Commitment of Traders report showed managed money spec funds in CBT wheat flipping back to net long 3,067 contracts by Tuesday, a move of 6,837 contracts from their net short position the week prior.
For KC HRW, they increased the net long another 4,020 contracts to their net long position for the week, to 31,725 contracts.
In this context, CBOT soft red winter (SRW) futures rose 19 cents to close at $7.03/bu.
KCBT hard red winter (HRW) futures were up 27 cents to end at $6.73/bu.
MGE hard red spring (HRS) futures gained 21 cents to close at $9.04/bu.
CBOT corn futures were flat at $5.47/bu.
CBOT soybean futures were down 46 cents to close at $13.55/bu.
Wheat basis levels were mixed this week.
HRS basis was flat in the PNW and up slightly out of the Gulf.
HRW fell in both export regions.
SW prices were up slightly this week, while SRW Gulf basis was down for nearby delivery.
PNW exporters report slow demand, keeping basis prices under pressure.
SW and HRS farmers are cautious about production prospects, supporting basis prices.
Importers see value in HRW andbooked more than 220,000 metric tons (MT) of HRW from July 15 to 22.
That demand potential has traders carefully looking at available supplies as new crop quality data starts to be available.
From South America, the Buenos Aires Grains Exchange (BAGE) reported that Argentina’s wheat crop may have been damaged by a cold front last week, but the report added it wasn’t enough to alter the 19.0 MMT harvest forecast.
In neighboring Brazil, Conab, the Brazilian government’s food supply and statistics agency, reported that freezing temperatures would hit wheat crops in southern and southeastern states this week.
The general manager of the Chamber of Port and Maritime Activity for the Parana River in Argentina says it is likely bulk carriers will be forced to carry 40% less grain down the river by September or early October as water levels continue to fall.
The Rosario ports are also loading 21% less grain due to low water levels there.
According to BAGE, the low water levels could generate a $315 million loss for Argentina’s farm sector.
From the Black Sea basin, UkoAgroConsult, a Ukrainian analytics firm, reported a new deep-water berth launched at a grain terminal in the Eastern Black Sea port of Novorossiysk, Russia.
The report said this will be Russia’s deepest water berth on the Black Sea and was built specifically for heavy tonnage grain vessels with a capacity of 100 KMT (100,000 MT) and a draft of 14.4 meters.
Egypt’s GASC, the world’s largest wheat buyer, passed on offers for Russian-origin wheat for the fourth tender in a row this week.
Russian-origin prices were on average $5.50/MT higher than the winning bids awarded to Ukraine and Romania.
So far in 2021/22, Egypt has imported more than 13.0 MMT of wheat, worldwide, 2.0 MMT more than the second-largest wheat importer, Indonesia.
Watching the next market week, the first week of August begins with several reports.
On Monday begin with the Export Inspections report.
Later in the afternoon, NASS will show monthly domestic use data for June via the Grain Crushing, Fats & Oils, and Cotton System reports.
Crop Progress data will also be out Monday afternoon. On Wednesday, EIA will give us an update on the weekly ethanol production and stocks.
Thursday is the day for exports, as FAS will release Export Sales data in the morning, with Census export data for June also out that day. August live cattle options expire on Friday.
