US grain prices finished the week all higher.
Corn prices added another 5.6% to the 12 ¼ cent advance made the previous week.
Soybeans settled 1.3% higher for the week.
Soybean meal also showed up 1.6% for the week.
Soybeanoil was the only one to back off during the week by 1.3% mainly due to profit taking.
Wheat prices, meantime, marched into some new life of contract highs this week.
In fact, MPLS spring wheat jumped by 3.9%, trading at the highest value since 2011.
KC HRW, being a good substitute of HRS, rose by 1.5%.
Chicago SRW was up 2.2%.
On macro markets, U.S. crude prices settled higher yesterday, turning positive after an early decline, supported by OPEC+, which would maintain production cuts.
However, Brent and U.S. crude oil benchmarks both declined on the week after reaching multi-year highs on Monday.
In fact, Brent crude on Friday even if rose 6 cents to settle at $84.38, for the week fell $1,34 per barrel.
Also U.S. West Texas Intermediate crude rose 76 cents, or 0.9%, on Friday to settle at $83.57, however for the week shedded 41 cents.
Prices have been pressured since Wednesday by a report that U.S. crude stocks rose by 4.3 million barrels in the latest week.
Iran has said talks on reviving the international deal on its nuclear programme will restart by the end of November, bringing it a step closer to boosting oil exports.
On Thursday, Algeria said a crude output increase by OPEC+ in December should not exceed 400,000 barrels per day (bpd) because of market uncertainties and risks.
The alliance, which is gradually unwinding last year’s record output cuts, meets on Nov. 4.
British and European gas prices, meantime, continued to fall on Friday after Russian President Vladimir Putin said Russia could start pumping gas into European storage.
Meantime, the Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials such as grains, coal, and iron ore, decreased 3.1% on the week to end at 3,519.
On the financial side, Wall Street capped a choppy day of trading Friday with modest gains for stocks.
However the major indexes were nudged to more all-time highs.
Investors balanced the encouraging company earnings growth against concerns over rising inflation and supply chain disruptions.
In add the rise in Microsoft helped offset declines in Amazon and Apple after disappointing quarterly earnings from the online retailer and iPhone maker.
Thus, the Dow Jones Industrial Average rose 89.08 points, or 0.25%, to 35,819.56, the S&P 500 gained 8.96 points, or 0.19%, to 4,605.38 and the Nasdaq Composite added 50.27 points, or 0.33%, to 15,498.39.
The S&P 500 advanced 1.3% for the week, its fourth straight weekly climb, marking its longest weekly streak of gains since April.
For the month, the S&P rose 6.9%, its biggest monthly rise since November 2020.
The Dow rose 0.4% for the week while the Nasdaq gained 2.7%, also marking four straight weekly gains for each.
The Dow climbed 5.8% for October, its best monthly performance since March, while the Nasdaq jumped 7.3% for its biggest monthly percentage gain since November 2020.
The dollar index continued to rebound from prior-day losses on news that the Fed’s preferred inflation measure showed prices continuing to rise faster than its 2% target.
The dollar index rose 0.811%, with the euro down 1.03% to $1.1559.
Thus, for the week the U.S. Dollar Index increased from last week’s 93.57 to close at 93.78.
Coming back on grains market, large portions of the U.S. received heavy precipitation this week, bringing much needed moisture to dry areas, especially in the west and specifically California.
Scattered rains covered some parts of South Dakota, eastern Nebraska, southeast Kansas, and Wyoming, though the drought persists in eastern Colorado.
Precipitation varying from an inch and a half to two inches was widespread over central Idaho, California, and the Pacific Northwest, improving the topsoil moisture in Oregon by 16%, in Washington by 9%, and in Idaho by 17%.
However, drier conditions appear to be likely between today and Monday, with no part of the Midwest and Plains likely to see much more than 0.25” during that time, per the latest 72-hour cumulative precipitation map from NOAA.
Topsoil moisture remained short in Montana as drought conditions expanded there meantime.
The agency’s 8-to-14-day outlook predicts seasonally dry weather will reestablish itself in the Great Lakes region between November 5 and November 11, with seasonally cool temperatures likely in the eastern half of the U.S.
Meantime, in Monday’s US crop progress figures winter wheat planting lifted to 80pc.
As of October 24, 55% of the country’s wheat has emerged, led by Nebraska at 84%, Idaho at 70% and South Dakota at 69%.
Harvest progress in corn was 66pc, soybean harvest 73pc and milo harvest 71pc.
All about as expected, a part the first crop rating on winter wheats, posted at only 46% as good to excellent, below operators’ expectations.
On the demand side, US weekly export sales data showed 890,448 MT of corn were booked during the week that ended 10/21.
They were down 30% week-over-week and 10% below the prior four-week average.
That was at the bottom of the expected range and included a 130k MT Mexican purchase previously announced.
The week’s shipments were 688,505 MT, which was also below last week and the same week last year.
Indeed, corn export shipments were down 34% from a week ago and 24% below the prior four-week average.
USDA said Mexico was the top destination.
That took the total of shipped and unshipped sales to 29.785 MMT, 3% below vs. last year at this time and now 47% of the current USDA full year forecast.
FAS also reported 133k MT of milo were booked during the same week.
That was down from 262k MT last week but was up from 61k from the same week last year.
Sorghum shipments were seen at just 2,069 MT and were exclusively to Mexico.
As for soybean, weekly data showed US soybean sales were 1.18 MMT during the week that ended 10/21, slumping 59% lower week-over-week and tracked 22% below the prior four-week average.
That was below the expected 1.25 to 2 MMT range.
USDA reported China as the week’s top destination with 1.081 MMT booked, though 449k MT were switched from unknown and 66k from Hong Kong.
Exports were a marketing year high 2.406 MMT.
That set the 8-wk MY total shipment at 8.24 MMT.
Total US export soybean commitments are now 30.452 MMT, still 35% smaller than year ago.
US Exporters have now booked 54% of the USDA estimate vs. the average 56% pace for this date.
Soybean export shipments jumped 81% above the prior four-week average.
Thus, shipments trail last season’s pace by 41% and the 5-yr average by 20%.
As for the derivate products, USDA’s weekly report showed 161,475 MT of soymeal was sold.
That was 33% lower on the week, and half of the same week last year.
For soybean oil export bookings, South Korea was the top buyer with 9,000 MT booked of the 14,623 total.
BO bookings were near the top of the expected range and the largest weekly sale since April.
As for wheat, export sales data from the week ending 10/21 showed 269,265 MT of wheat was booked, slumping 26% lower from a week ago and 31% below the prior four-week average.
That was at the low end of the range of estimates and the lightest sale since 115k MT during the week of August 19.
Mexico was the top buyer.
Year-to-date commercial sales for delivery in 2021/22 total 12.6 million metric tons (MMT), 22% lower than last year at the same time.
Total commitments for wheat exports are 12.751 MMT, which is now 54% of the USDA forecast vs. the 61% average pace for this date.
USDA expects 2021/ 22 U.S. wheat exports will reach 23.8 MMT, 12% lower than last year if realized.
Shipments showed in the report were 185,559 MT during the week, bringing the MYTD total to 8.557MMT, fading 2% below the prior four-week average, but still improved 16% from a week ago.
It also should to note that this is down 20% from the same week last year.
Still on the demand side, on Wednesday EIA reported one of the largest weekly ethanol production totals on record, ledding corn and also all the others grain prices up.
Strong corn prices, indeed, have done little to temper ethanol production margins at these ethanol prices.
In fact, we have seen weekly ethanol production up again, at 1.11 million bpd this week.
And despite that being an extra 10k bpd above last week, and the 4th consecutive weekly increase to output, stocks declined 155k barrels during the week to 19.925 million.
To end the week, Friday’s Commitment of Traders report showed managed money spec funds added 25,222 contracts to their net long in corn futures and options during the week ending October 26.
That took them to a net long 244,790 contracts by Tuesday.
As for soybeans, Commitment of Traders data released on Friday showed spec funds in soybean futures and options cutting adding 5,746 contracts to their net long position from October 19-26. That increased the net long to 23,911 as of Tuesday.
As for wheat the weekly CFTC Commitment of Traders report showed spec funds in CBT wheat shrinking their net short position by 9,119 contracts between 9/19 and 9/26.
They were still net short 8,619 contracts on Tuesday.
In KC HRW, the funds added another 5,583 contracts to their already sizeable long for the week, taking it to 52,973 contracts.
There are ZERO reportable level managed money shorts in MPLS spring wheat.
The funds were net long 17,291 contracts as of Tuesday.
In this context, CBOT soft red winter (SRW) futures were up 16.8 cents during the week to end at $7.73/bu.
KCBT hard red winter (HRW) futures were up 11.8 cents to end at $7.86/bu.
MGE hard red spring (HRS) futures gained 39.3 cents to close at $10.52/bu.
CBOT corn futures were up 30.3 cents to $5.68/bu.
CBOT soybean futures were up 15.3 cents to close at $12.36/bu.
US FOB wheat prices are above most of the world, and ocean freight is being monopolized by soybeans.
Consequently high futures prices, continue to weaken basis and limit export demand.
Tight elevation capacity lowered HRW basis in both the Gulf and Pacific Northwest (PNW), while HRS basis was steady in the Gulf.
Corn basis bids were steady to mixed across the central U.S. on Friday after rising 12 cents higher at an Illinois river terminal while sliding 2 cents lower at two other Midwestern locations.
Soybean basis bids were steady at most Midwestern locations on Friday but did climb 10 cents higher at an Indiana processor and 14 cents higher at an Illinois river terminal.
In this context, as of October 28, 2021, US HRS 13,5% prot, for Nov. ’21 was valued at $456.62/ mt FOB PNW (up $12.43/mt from last week).
FOB Gulf HRW 11.5 pro was valued at $367/mt (up $5.45/mt from last week).
(Omissis …).
From Canada, (Omissis …).
In this context, as of October 25, 2021, Canadian wheat prices for FOB delivery were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $528.49, up $25.66 per tonne;
– for the N2 class CWRS 13.0% – $519.39, up $25.65/t;
– for the N3 CWRS – $431.53, up $12.81 ;
– for the N1 CWAD – $842.13, up $6.96 per tonne.
(1USD=Cnd$1.234).
From South America (Omissis..)
In this context, as of October 28, Argentina Wheat Grade 2 export price, (Up River) was at $307, up $11 from last week.
Argentina corn feed was up $8 for the week, closing at $254.
Brazilian corn feed (Paranagua) was at $271, up $2 from past week.
Argentina barley feed, was unchanged from last week, valued at $275.
Argentina soybean gained $4 to close at $544.
Brazilian soybean fell $3 finishing the week at $514.
On European market, (Omissis…).
In this context, Matif December wheat futures gained 3.25 euros from last week, closing at €283.25/t.
Matif corn November futures shedded 9,5 euros to close the week at €239.5/t.
Matif rapeseed November futures, rose 3.75 euros, ending the week at €678.25/t.
Nov-21 UK feed wheat futures gained £6.95 from past week, closing at £213.95/t.
Meantime, as of October 14, FOB prices in US dollar for French wheat with 11.5% protein and Oct. delivery, were at $ 335/mt, up $8/mt from last week.
French durum wheat, FOB La Pallice/ Port la Nouvelle, not quoted this week.
Corn delivered Bordeaux Spot – July 2021 basis was at $286.63 per tonne, down $1.78 from last week.
FOB Rhin Spot – July 2021 basis was at $295.88 per tonne, down $1.83 week on week.
Feed barley delivered Rouen – July 2021 basis was at 292.41$/t, up $5.15.
Malting barley FOB Creil Spot – July 2021 basis was at $390.66 per tonne, down 2.42$ from past week.
Rapessed FOB Moselle Spot – Flat – 2021 harvest was at 773.23$/ton, down $9.45 compared to prior week.
Standard sunseed delivered St Nazaire Spot – Flat – 2021 harvest was up $1.35 from last week at $716.59 per tonne.
As of October 25, German wheat with 12.5% protein for Oct. delivery, closed at $331/mt, up $8.20/mt .
Baltic wheat with 12.5% protein was at $331.6/mt, up $9.40/mt.
(EUR/USD=> US$1.1558).
(Omissis …).
From the Black sea basin, (Omissis …).
Russian wheat prices increased again last week.
According to IKAR, Russian wheat with 12.5% protein on a dry moisture basis (11% on a 12% moisture basis) was loading at $312.00/MT FOB last week, up $2.00/MT from the week prior.
According to Sovecon, Russian wheat was at $316 a tonne, FOB, at the end of last week, up $3 from the previous week. (USD/RUB = ₽70,94).
(Omissis …)
Meantime, Russian Agriculture Ministry has amended export duties for wheat, barley and corn for the period Nov. 10-16, 2021.
As for wheat the export duty will be increased to 69.9 USD/t, from 67 USD/t a week ago.
The indicative price moved up from 295.8 USD/t to 299.9 USD/t.
As for corn the export duty will grow to 50.10 USD/t from 49.7 USD/t prior week.
The indicative price moved up from 256 USD/t to 256.6 USD/t.
At the same time, the tariff for barley will increase to 54.8 USD/t from 42.6 USD/t prior week.
The indicative price moved up from 245.9 USD/t to 263.3 USD/t.
(Omissis …).
From Australia, (Omissis…).
In this context, indicative delivered prices in Australian dollars per tonne were:
Barley Downs: (Nearby) $260 down $20 – (January) $270 down $25;
Wheat Downs: (Nearby) $340 up $5 – (January) $350 up $15;
Sorghum Downs: (Nearby) $310 up $5 – (January) $290 steady;
Barley Melbourne: (Nearby) $290 steady – (January) $296 down $4;
Wheat Melbourne: (Nearby) $372 up $7 – (January) $358 down $7.
(AUD/USD=> US$0.754).
On international trade scenario (Omissis …).
Watching next week market,we will start Monday with November soybeans now in delivery status.
We’ll see USDA Export Inspections in the morning and the Crop Progress report in the afternoon.
As the first weekday of the month, we’ll also see the USDA Fats & Oils, Grain Crushings and Cotton reports.
The FOMC will be meeting on Tuesday and Wednesday and is expected to formalize tapering of their bond and MBS buying programs due to inflationary pressures.
On Wednesday EIA will also put out ethanol production and stocks data.
On Thursday FAS will release their weekly Export Sales report.
Author: Sandro F. Puglisi
