A volatile week, rolls gently to the close.
Grains prices went on something of a rollercoaster ride this week, but Friday’s session didn’t move the needle much in either direction after a round of light, mixed technical maneuvering.
Corn prices stumbling to a weekly loss of 1.7%.
Soybeans tracked around 0.3% higher week over week.
While wheat prices, were mixed but mostly lower on the week.
In fact, Kansas City HRW futures fell around 1,3%, MGEX spring wheat futures trended lower felling around 1,6%, and also Chicago Soft Red Winter futures were lower, with loss 0,62% week on week.
Indeed, CBOT soft red winter (SRW) futures fell 4 cents to close at $6.37/bu.
KCBT hard red winter (HRW) futures lost 8 cents to end at $6.17/bu.
MGE hard red spring (HRS) futures fell 10 cents to close at $6.16/bu.
CBOT corn futures lost 10 cents to end at $5.39/bu.
CBOT soybean futures gained 5 cents to close at $13.72/bu.
This week, beneficial precipitation alleviated some dryness in south-central Nebraska.
More rain and snow is expected for most of the Midwest and Plains between Saturday and Monday, with the exception of the Dakotas and Minnesota, per the latest 72-hour cumulative precipitation map from NOAA, even if extreme dryness continues to plague winter wheat producers in the High and Southern Plains.
Indeed, exceptional drought spread on the Kansas-Colorado border and abnormal dryness emerged in the Oklahoma and Texas Panhandles.
The agency’s 8-to-14-day outlook predicts that colder-than-normal temperatures will persist across much of the country between February 19 and February 25, with seasonally dry weather spreading across the Plains and western Corn Belt during this time.
About export sales, USDA now expects the United States will export 10.1 MMT of HRW, 7.76 MMT of HRS, 2.04 MMT of SRW, 6.12 MMT of white wheat (soft and hard) and 820,000 metric tons (MT) of durum.
This week’s commercial sales of 591,000 MT for delivery in 2020/21 were down 5% from last week’s 643,000 MT but well above trade expectations of 200,000 MT to 450,000 MT.
Year-to-date commercial sales now total 23.0 MMT, 5% ahead of last year’space.
Forecasts total U.S. wheat exports will reach 26.8 MMT in 2020/21, 2% ahead of last year, if realized.
USDA also forecasts domestic Chinese wheat consumption will reach a record 140 MMT in 2020/21, up 5.0 MMT from the January estimate and 15% higher than the 5-year average on increased feed usage as wheat competes with domestic corn as a cheaper feed staple as Chinese producers work to rebuild hog herds.
Chinese wheat imports are expected to reach 10.0 MMT this year, up 86% from 2019/20 and more than double the 5-year average.
In its February World Agricultural Supply and Demand (WASDE) report, USDA lowered its world wheat ending stocks estimate by 3% from last month to 304 million metric tons (MMT) primarily on increased wheat feeding in China.
Despite the reduced estimate, record global ending stocks in 2020/21 would still be 1% higher than last year and 10% more than the 5-yearn average.
In add, increased US elevation capacity and more commercial selling pressured further Pacific Northwest (PNW) HRW export basis values for March and April deliveries .
And lower futures prices also pressured soft white (SW) export prices for nearby and deferred deliveries.
The soybean complex has evolved in particular in scattered order after the Buenos Aires Commercial Exchange announced a four point improvement in the rate from “good to excellent” in the Argentine fields fixing at 23%, however, this ratio still represents a drop of 43 points compared to last year.
Corn ratings were also lowered by two points to 23%, compared to 62% last year!
We must note, the USDA announced yesterday two sales of corn of 195 kt (in Costa Rica) and 116 kt (in Guatemala), but this was not enough to boost the prices of the seed across the Atlantic.
In fact, expectations for a massive harvest coming out of Brazil kept gains in check.
Brazilian association Abiove is expecting the country’s 2020/21 soybean production to rise 3.2% year-over-year, reaching 4.872 billion bushels.
The group also estimates that February soybean exports will come in at 242.5 million bushels, with total exports this marketing year likely to reach 3.050 billion bushels.
Brazilian soybean exports were quite sluggish in January, however – with just 1.8 million bushels shipped last month, per the latest trade data.
With harvest slowly progressing, some traders expect supplies to normalize by March.
The Brazilian corn harvest could reach a record in 2021, at 105.5 Mt!
Conab has just increased its estimates by 3.2 Mt, due to an adjustment in national surfaces, meanwhile the sowing will begin soon for the Safrina, which represents two thirds of the corn produced in the country.
US grain markets will be closed on Monday, February 15, in observance of Presidents’ Day.
Despite these mixed performance across the Atlantic, European grains remained mostly oriented in the green.
In fact, Matif corn futures for March gained 0,50 euro closing to 219,00 €/t up 0,22% from last week, .
Matif rapeseeds futures for May were up 9,75 euro closing to 449,50 referring to past week.
While Matif wheat futures for March fell 75 cents to 223,75, lossing 0,33% from last week.
Indeed, even if european wheat prices had seems rose yesterday on speculation over damage to the U.S. crop, really, Euronext wheat prices, lossed this week.
On Feb 9, the French Ministry of Agriculture increased the country’s winter wheat planted area estimate to 12.1 million acres (4.90 million hectares), up 15% from the winter wheat planted area for harvest in 2020 and 1% more than the 5-year average on beneficial planting conditions.
European Commission (EC) data confirmed the European Union (EU) has now exported 15.8 MMT of soft (non-durum) wheat outside the bloc so far in 2020/21, down 16% on the year due to lower production.
USDA forecasts the EU will export 27.0 MMT of wheat in 2020/21, down 30% on the year and 8% less than the 5-year average.
The Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials like grains, coal and iron ore, fell 2% to end at 1,313.
However, loads in Black Sea ports remain limited (Ukraine loaded 657 kt) and thus contribute to the pressure on Community prices.
In fact, Ukraine shipped 13.2MMT of wheat on Feb 12, 246k loading in ports.
Anyway it’s 2.885MMT lower YoY.
Exports expectation 20/21 (Jul-Jun) – 17.5MMT.
Ukraine also loading 0.5MMT of corn these yesterday, after which exports will reach 12,74MMT.
Anyway it’s 5MMT lower YoY.
Feb 1-12 shipped just 1,056MMT of corn.
Exports expectation for 20/21 (Jul-Jun)- 24MMT.
