US grain markets were mixed this week, likely as they have a tendency to shift around Thanksgiving.
Indeed, corn futures slipped around 1.13%.
Soybeans, in contrast, rose more then 1.5%.
Soybean meal was again the driving force for the complex, as it was up around 2.7% for the week.
Soy oil, on the other hand was down 1.4%.
Wheat futures have seen new highs levels in KC, up more then 0.21% for the week.
Chicago rose 0.73%.
MPLS spring wheat was in retreat mode, down 3.79%.
Particularly, CBOT corn futures were down 6.5 cents to $5.71/bu.
CBOT soybean futures gained 19 cents to close at $12.63/bu.
CBOT soft red winter (SRW) futures gained 6 cents to $8.23/bu.
KCBT hard red winter (HRW) futures were up 1,8 cent to end at $8.35/bu.
MGE hard red spring (HRS) futures lost 39.8 cents to close at $10.10/bu.
Meantime, wheat basis was lower in the Gulf this week for HRS while HRW basis is steady into 2022.
Export sales pace was good for a second week in a row.
In the Pacific Northwest (PNW) HRS basis declined as grain traders held significant long positions.
Logistics challenges, however, are leaving little room for basis to move lower in both the Gulf and PNW.
Rail crew shortages have led to delays in delivery to grain terminals and caused secondary rail market rates to spike.
Domestic mills also faced rail delays and have turned to trucks for grain delivery.
Thus, as of November 19, 2021, US HRS 13,5% prot, for Dec. ’21 valued at $426.31/ mt FOB PNW (down $23.79/mt from last week).
FOB Gulf HRW 11.5 pro was valued at $382.04/mt (up $2.48/mt from last week).
Corn basis bids were steady to mixed to close out the week, moving as much as 4 cents lower at an Illinois river terminal and as much as 10 cents higher at an Iowa processor on Friday.
Soybean basis bids improved 2 cents at two interior river terminals and added 3 cents at an Ohio elevator while holding steady elsewhere across the central U.S. on Friday.
On macro markets, oil prices fell about 3% to below $80 a barrel on Friday as surging COVID-19 cases in Europe threatened to slow the economic recovery while investors also weighed a potential release of crude reserves by major economies to cool prices.
Thus, Brent futures for January fell $2.35, or 2.9%, to settle at $78.89 a barrel.
U.S. West Texas Intermediate (WTI) crude for December fell $2.91, or 3.6%, to $76.10 on its last day as the front-month.
WTI for January , which will soon be the U.S. front-month, was down about $2.65, or 3.4%, to $75.78.
Both benchmarks declined for the fourth consecutive week, for the first time since March 2020.
On the freight market, the Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials such as grains, coal, and iron ore, decreased 9% on the week to end at 2,552.
Shipping rates have eased the last two weeks as China’s iron ore and coal prices weigh on demand for capsize and panamax vessels reported AgriCensus.
On equities markets US stocks on Friday settled mixed, with the Nasdaq 100 climbing to a new all-time high and the Dow Jones Industrials falling to a 3-week low.
A more than +10% jump in Intuit to a record high led technology stocks higher Friday and pushed the Nasdaq 100 up to a new all-time high.
However, a worsening of the global pandemic has led to lockdowns in Europe that hammered crude prices and undercut energy stocks.
Also, the worsening pandemic weighed on travel stocks and cruise ship operators.
Comments on Friday from Fed Governor Waller were bearish for stocks when he said, “the rapid improvement in the labor market and the deteriorating inflation data have pushed me towards favoring a faster pace of tapering and a more rapid removal of accommodation in 2022.”
A worsening of the global pandemic is bearish for stocks after the 7-day average of new U.S. Covid infections rose to a 6-week high Thursday of 97,006.
Also, the 7-day incidence rate of new Covid infections in Germany rose to a record of 337 per 100,000 people on Thursday.
Thus Wall Street closed out a week of choppy trading with stocks mostly lower Friday.
In fact the S&P 500 index gave up 0.14% a day after setting an all-time high.
The Dow Jones Industrial Average fell 0.75% and the Nasdaq composite rose 0.55%.
Despite an up-and-down week, the S&P 500 and Nasdaq notched weekly gains, while the Dow posted its second straight weekly loss.
Particularly, the S&P 500 fell 6.58 points to 4,697.96, the Dow slid 268.97 points to 35,601.98, its third straight drop, the Nasdaq added 63.73 points to 16,057.44, for its sixth straight gain.
The U.S. Dollar Index, meantime, increased slightly from last week’s 95.128 to close at 96.028.
In Canada, Canadian wheat export price continued to rise last week.
As of November 15, N1 class CWRS with 13.5% prot. was valued at $527.74 – FOB West Coast – , up $13.54 per tonne.
The N2 class CWRS with 13.0% quoted at $517.26 – FOB West Coast -, up $57.96/t w.o.w.;
The N3 class CWRS was pegged at $465.71 – FOB West Coast -, up $30.66;
The N1 class CWAD (Durum Wheat), was quoted at $845.37 – FOB Great Lakes -, up $5 per tonne.
Durum street prices, quoted at $716.88, unchanged from past week.
While export basis rose at CAD $128.5, up $5 from $123.50/mt of previus week.
(1USD=Cnd$1.2600).
From South America, as of November 18, Argentina Wheat Grade 2 export price, (Up River) was at $310, down $7 from last week.
Argentina corn feed was up $1 for the week, closing at $251.
Brazilian corn feed (Paranagua) was at $270, up $4 from past week.
Argentina barley feed, was unchanged from last week, posting at $290.
Argentina soybean jumped $16 to close at $551.
Brazilian soybean gained $15 finishing the week at $512.
On European market, Euronext ended the week in disarray with a marked drop in rapeseed, a lack of direction in corn, and new wheat records on its close contract.
Indeed, Matif December wheat futures gained 2.5 euros from last week, closing at €299.75/t.
Matif corn January futures were up 5 euros to close the week at €248.75/t.
Matif rapeseed February futures, tumbled 32.50 euros, ending the week at €677.75/t.
Nov-21 UK feed wheat futures rose £5.1 from past week, closing at £223.5/t.
Meantime, as of November 18, FOB prices in US dollar for French wheat with 11.5% protein and Dec. delivery, were at $ 347/mt, up $3/mt from last week.
French durum wheat for human use, FOB Port la Nouvelle quoted $542/ton.
French durum wheat, feed use – basis La Pallice, quoted $507.64/mt, down $1.61 from prior week.
Spanish durum wheat Sevilla (DepSilo), closed at $609.17/mt, down $8.80 from prior week.
Italian durum wheat Bologna (Delivered to first customer), valued at $612.55/mt, down $8.84/mt from last week.
German wheat (Depsilo) with 12.5 pro closed at $318.12, down $17.17/mt from last week.
Nov. Baltic with 12.5 pro wheat (Delivery First) was at $289.92/mt, up $9.54/mt.
Corn delivered Bordeaux Spot – July 2021 basis was at $288.79 per tonne, up $4.98 from last week.
FOB Rhin Spot – July 2021 basis was at $294.43 per tonne, up $4.90 week on week.
Feed barley delivered Rouen – July 2021 basis was at 301.20$/t, down $0.92.
Malting barley FOB Creil Spot – July 2021 basis was at $394.83 per tonne, up 5.74$ from past week.
Rapessed FOB Moselle Spot – Flat – 2021 harvest was at 787.41$/ton, down $18.23 compared to prior week.
Standard sunseed delivered St Nazaire Spot – Flat – 2021 harvest was down $14.78 from last week at $706.19 per tonne.
(EUR/USD=> US$1.1281).
From the Black Sea basin, Russian wheat prices gained for the 4th consecutive week last week.
According to the IKAR, indeed, Russian wheat with 12.5% protein loading from Black Sea ports for supply in the second half of November was valued at $328 a tonne, free on board (FOB) at the end of last week, up $2 from the previous week.
According to SovEcon, wheat export price was up by $5 to $332 a tonne.
Barley export price rose by $3 to $296 a tonne, meantime.
Domestic 3rd class wheat, European part of Russia, excludes delivery, was valued at 15,100 roubles/t ($208.5), up +200 rbls (Sovecon);
Sunflower seeds were at 36,050 rbls/t, up +550 rbls (Sovecon);
Domestic sunflower oil was at 87,675 rbls/t, unchanged from prior week (Sovecon);
Export price for sunflower oil was at $1,375/t, up +$10, (Sovecon);
Export price for sunflower oil was at $1,370/t, down -$5 (IKAR);
Soybeans were at 49,700 rbls/t, unchanged (Sovecon);
White sugar, Russia’s south was at $625.0/t +$1(IKAR).
($1 = 73.0995 roubles)
Meantime, Russian Agriculture Ministry has amended export duties for wheat, barley and corn for the period Nov. 24-30, 2021.
As for wheat the export duty continue to increase from 77.1 USD/t the prior week, to 78.3 USD/t for the referred period.
The indicative price moved up from 310.2 USD/t to 311.9 USD/t.
In contrast, as for corn, the export duty will decrease to 53.60 USD/t from 62.90 USD/t prior week.
The indicative price moved down from 274.9 USD/t to 261.6 USD/t.
At the same time, also the tariff for barley will decrease to 65.30 USD/t from 66.0 USD/t prior week.
The indicative price moved down from 279.3 USD/t to 278.3 USD/t.
In Australia, indicative delivered prices in Australian dollars per tonne were last week:
Barley Downs: (Nearby) $286 up $8 – $288 up $6 Jan;
Wheat Downs: (Nearby) $348 up $3 – $340 steady Jan;
SFW wheat Downs: (Nearby) $315 down $5 – $320 down $5 Jan
Sorghum Downs: (Nearby) $330 up $10 – $310 up $10 Mar;
Barley Melbourne: (Nearby) $310 up $8 – $300 up $5 Jan;
Wheat Melbourne: (Nearby) $400 up $25 – $385 up $20 Jan.
(AUD/USD=> US$0.7279).
On the international trade scenario, Egypt ‘s state grains buyer, GASC bought 60,000 tonnes of Romanian wheat.
The shipment is for Jan. 1- 15, 2022.
The trade house is Ameropa BV, wheat price was at $346.97 + $25.00 freight, for a total of $371.97.
Other offers, all were for 60,000 tonnes, were submitted, with exception of Viterra’s Russian which offered 55,000 tonnes.
Particularly, GTCS Russian, has offered $349.69, Soufflet French $347.74, Dreyfus Ukrainian $350.00, Solaris Russian $351.36, Nibulon Ukrainian $348.00, Grainexport Romanian $354.00, Grainexport Russian $357.50, Viterra French $349.75, Viterra Russian $359.97.
Its should to note that GASC has recently also opened its tenders to wheat from Baltic Sea exporter Latvia.
In its last wheat tender on Nov. 1, GASC had bought 180,000 tonnes of Russian wheat at the lowest price of $331.90 a tonne FOB or $363.83 a tonne c&f.
Algeria purchased an estimated volume of milling wheat between 720,000 and 750,000 tonnes.
Purchase prices were put at $382.50 to $384 a tonne c&f.
The big news is around 270,000 tonnes of OAIC ‘s purchase were expected to be sourced from Russia.
Algeria has been the main export market for European Union wheat, particularly France.
However, French wheat was not expected to claim any sales in this week’s tender.
Poland, Germany and Argentina are seen as likely to be among the other origins supplied for the new purchase.
Algeria does not release results of its tenders.
The origin of the wheat bought by OAIC is at the seller’s option, which means the supply countries can be uncertain until loading.
The wheat was sought for shipment in three periods: in 2021 between Dec. 16-31, and in 2022 between Jan. 1-15 and Jan. 16-31.
If sourced from South America or Australia, shipment is one month earlier.
China bought an estimates volume of Ukrainian corn, ranging between 300,000 to 700,000 tonnes late last week.
Indeed, from eight to 10 shipments were bought with a total minimum quintity of 500,000 tonnes.
Prices renged between $325 to $335 a tonne c&f.
Shipments are mostly for January/March 2022.
Watching next week market, next week for American people is the Thanksgiving week’s.
Thus, the week starts out with the normal USDA Export Inspections on Monday morning and the second to last Crop Progress report for 2021 in the afternoon.
The monthly Cold Storage report will also be released on Monday afternoon.
Tuesday is first notice day for December cotton futures.
Wednesday we will see the EIA report on weekly ethanol production and stocks.
The US market and government will be closed on Thursday for Thanksgiving.
Friday we will see a delayed Export Sales report from USDA, as well as the expiration of December grain options.
Author: Sandro F. Puglisi
