US farm markets, jumped back into the green on Friday, but ended the week in a mixed mode.
Corn and soybean prices went into the weekend each with gains around 0.60%.
However, they did have a different destine for the week.
Althought corn posted a new contract high in several contracts this week, it felt pressured in the last half, to retreat 2.44% from last Friday.
Soybean completed the week with a 5.68% gain, in contrast.
Soymeal added another 1.56% to the upside on Friday and ended the week with a 7.95% gain.
Soybean oil were only 0.14% higher from Friday to Friday, limited in part by Friday’s 0.59% pullback.
Winter wheat contracts showed the most upside on the end week session.
Chicago futures closed 1.53% higher on Friday, which for March limited the week’s drop to 2.93% from Friday to Friday.
KC wheat closed the last trade day of the week with 2.18% gains, but for the week, was still a 2.06% drop.
MPLS futures ended the session with 1.36% gains.
From Friday to Friday, March HRS futures were down 0.78%.
Particularly, corn futures were down 15.5 cents to $6.21/bu.
Soybean futures were up $0.835 at $15.54/bu.
Soymeal jumped by $32,7/smt at $443.90 smt.
Soy oil soared by $0.09 cents at $65.36.
CBOT soft red winter (SRW) futures fell 23 cents to close at $7.63/bu.
KCBT hard red winter (HRW) futures lost 16.5 cents to end at $8.02/bu.
MGE hard red spring (HRS) futures shedded 7.20 cents to close at $9.13/bu.
Meantime, as of February 3, 2022, US corn 3YC (Gulf) was at $290/mt (down $5/mt from last week).
US soybean 2Y (Gulf) quoted at $617/mt (up $33/mt from last week).
US wheat No 2 Hard Red Winter (HRW) was valued at $373/mt (down $14/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was at $331/mt (down $10/mt from last week).
Northern Durum offers from the Great Lakes for April/May 2022 delivery are quoted at $635/MT ($17.28/bu) (unchanged from prior week).
Meantime, USDA reported the week’s average cash corn oil price ranged from 69.67 (in NB) to 71.57 (in EC) cents/lb regionally through the week.
That compared to 67.1 – 69 cent average prices last week.
DDGS FOB prices were reported higher as well, with USDA seeing NOLA bids at $285/ton and PNW at $298/ton.
Last week’s FOBs were $265 and $290 respectively.
The weekly average ethanol cash prices were mixed.
Indeed, average prices, ranged for the week ended 2/4 between $1.94 SD to $2.02 EC compared to prior week when ranged from $1.86 to $2.06/gal.
Meanwhile gasoline futures ended the week at $2.6759, that was up from $2.5480/gal posted last week.
The weekly spot price for B100 fuel was unchanged from prior week to close at $5.55/gal during the week of 2/4.
USDA’s weekly Crush report showed the estimated processing value of soybeans was $18.30/bu on $15.36 cash beans.
That compared to $16.91/bu reported prior week on $14.12 beans.
In energy market, oil prices surged to seven-year highs on Friday, extending their rally into a seventh week on ongoing worries about supply disruptions fueled by frigid U.S. weather and ongoing political turmoil among major world producers.
Thus, Brent crude rose $2.16, or 2.4%, to settle at $93.27 a barrel having earlier touched its highest since October 2014 at $93.70.
U.S. West Texas Intermediate crude ended $2.04, or 2.3%, higher at $92.31 a barrel after trading as high as $93.17, its highest since September 2014.
Brent ended the week 3.6% higher, while WTI posted a 6.3% rise in their longest rally since October.
Crude prices, which have already rallied about 20% so far this year, are likely to surpass $100 per barrel due to strong global demand, market strategists said this week.
Reflecting that bullish view, money managers raised their net long U.S. crude futures and options positions in the week to Feb. 1 by 6,616 contracts to 304,013, the U.S. Commodity Futures Trading Commission (CFTC) said.
In the freight market, the Baltic Exchange’s dry bulk sea freight index slipped on Friday, as a dip in capesize rates overshadowed gains in the panamax and supramax segments.
The overall index, which factors in rates for capesize, panamax and supramax vessels, fell 2 points to 1,423.
However, the index is 3% higher for the week, its first time after four consecutive weekly decline.
Particularly, the capesize index slipped 49 points on Friday, or 3.8%, to 1,242, but for the week climbed 167 points, or 15.53%.
Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, fell by $408 to $10,302.
The panamax index rose 25 points to 1,796 on Friday.
However for the week the index eased 44 points or 2.39%
Average daily earnings for panamaxes, which ferry 60,000-70,000 tonne coal or grain cargoes, increased by $226 to $16,165.
The supramax index gained 23 points closing at 1,594, but finished the week shedding 3 points from last Friday, its lowest level since February 2021.
In equities markets, Wall Street closed out a mostly upbeat week for stocks Friday with a mixed finish for the major indexes and a surge in Treasury yields after a blowout U.S. jobs report raised investors’ expectations that the Federal Reserve may soon start raising interest rates sharply.
Thus, on Friday session the S&P 500 settled for a 0.5% gain after swinging between a 0.6% drop and a 1.4% increase.
The Dow Jones Industrial Average slipped 0.1% after a last-minute burst of selling.
The Nasdaq composite rose 1.6%.
Particularly, the S&P 500 rose 23.09 points to 4,500.53, while the Dow slipped 21.42 points to 35,089.74.
The Nasdaq gained 219.19 points to 14,098.01, while the smaller stocks in the Russell 2000 rose 11.33 points, or 0.6%, to 2,002.36.
The three indexes posted a weekly gain for the second week in a row.
Indeed, for the week, the S&P 500 rose 68.68 points or 1.55%.
The Dow gained 364.27 points, posting a weekly gain of 1.05%.
The Nasdaq rose 327.44 points, that left the index 2.38% higher from prior week.
The latest monthly jobs data was a key focus for investors.
The Labor Department said employers added 467,000 jobs last month, triple economists’ forecasts.
Some economists were even expecting a loss of jobs amid January’s surge in coronavirus infections because of the omicron variant.
Also, Dec nonfarm payrolls were revised upward to +510,000 from the originally-reported +199,000.
Meantime, the Jan unemployment rate unexpectedly rose +0.1 to 4.0%, showing a slightly weaker labor market than expectations of no change at 3.9%.
U.S. Jan avg hourly earnings rose +0.7% m/m and +5.7% y/y, stronger than expectations of +0.5% m/m and +5.2% y/y.
This week was marked by a historic plunge in the shares of Facebook’s parent erased more than $230 billion in market value.
That was the biggest one-day loss in value for a U.S. company.
Meta fell another 0.3% Friday.
However, of the 272 companies in the S&P 500 that have reported quarterly earnings results, 82% have met or beaten estimates, with profits coming in at 8.8% above projected levels.
Indeed, a 13.5% gain for online retail giant Amazon after the company delivered a strong earnings report helped lift the S&P 500.
Meantime, Snapchat parent Snap soared 58.8%, and Pinterest gained 11.2% following their own earnings reports.
In this context, the dollar index on Friday was up +0.11%, recovering from a 2-1/2 week low and moved higher on expectations of tighter Fed policy.
However the dollar index, which tracks the greenback versus a basket of six currencies, and reached to 97.226 prior week, this week tumbled to 95.480, shedding for the week more then 1.8%.
On the weather side, conditions remained dry this week across most U.S. wheat-growing regions.
Extreme drought conditions persist across northwest Texas and western Oklahoma.
In eastern Colorado and western Kansas and parts of Wyoming, heavy snow led to some improvement.
In the Dakotas, unusually warm and windy weather expanded severe drought.
Northwest North Dakota did see some improvement following increased snowpack.
Weather in the PNW was dry this week except for the Idaho-Montana border where some abnormal dryness was reduced.
Very little rain or snow is expected in the central U.S. between today and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA, although parts of North Dakota, Minnesota, Wisconsin and Michigan could gather some additional moisture into early next week.
NOAA’s 8-to-14-day outlook predicts seasonally dry weather returning to the Central Plains between February 11 and February 17, with widespread cooler-than-normal conditions likely east of the Mississippi River.
Expanding drought and lack of snow cover in the U.S. Plains HRW belt may lead to greater than usual acreage abandonment.
However, “completely dry weather is unlikely,” World Weather said.
“There will be some occasional shower activity even if the general pattern of unusual dryness will continue.
The need for greater moisture will be increasing later in February as spring gets closer.”
In Canada, as of January 31, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $478.26 per tonne, down C$18.26/t from prior week;
– for the N2 class CWRS 13.0% – $470.79/t, down C$14.06 wow;
– for the N3 CWRS – $463.79/t, down C$13.13 from prior week.
As of January 31, 2022, for the N1 CWAD 13% (durum wheat first class) deferred average prices for delivery in March ’22 were at C$689.32 down C$18.37 per tonne week on week.
Spot export basis West Coast & Central SK soared from C$ 132.28 to 150.55 per tonne, as delivered FOB price Great Lakes was at C$ 839.86, down from C$ 839.97 per tonne posted prior week.
That was C$0.11 lower from the prior week.
Meanwhile, as of February 2, 2022, durum wheat (CWAD) FOB price delivered in St. Lawrence, was valued at C$855.63 per tonne, down C$17.06 from prior week.
As of February 04, 2022, for the N1 CWAD 13% (durum wheat first class), average street prices in REGIONAL ZONES were at C$592.65 per tonne, down C$105.43 from prior week.
(1USD=Cnd$1.2676).
In South America, as of February 3, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $307, up $1 from prior week.
Argentina corn feed was down $2/t for the week, closing at $273.
Brazilian corn feed (Paranagua) was at $290, down $5 from prior week.
Argentina feed barley, was up $10 on week, posting at $310.
Argentina soybean was up $23 at $628.
Brazilian soybean rose $46 finishing the week at $613.
In Europe, waning market fears of a Russian invasion of Ukraine have weighed on wheat prices this week, with attention shifting back to lagging western European exports.
However, “market volatility will remain high while Putin has his troops on the Ukrainian border” British merchant ADM Agriculture said in a note.
A sharp rise in the euro against the dollar, after comments by the European Central Bank’s president fuelled expectations of faster monetary policy tightening, pressured Euronext by making European grain more expensive for export.
However, this week’s price fall had made French wheat competitive and could generate fresh sales.
Meantime, the Euronext slide made farmers less willing to sell.
Indeed, “slack farmer selling is being seen in Germany, Denmark and Poland which is making it difficult to meet continued demand from flour mills and other consumers in the domestic market”.
In this context, the wheat contract tumbled 13.25 euros for the week closing to 265.5 euros per tonne.
That represent a weekly loss by 4.75%.
Corn prices eased 5.5 euros for the week, to close at 251.75 euros per tonne, shedding by 2.14% for the week.
In rapeseed, May futures closed this week at 696.5€/t, down €14/t to sett a 1.97% losse week on week.
March-22 UK feed wheat futures, fell £3.4 from prior week, closing at £215.65/t.
Meantime, as of February 3, 2022, FOB prices in US dollar for French wheat with 11.5% protein and February delivery, were at $309/mt, down $8/t from prior week.
French durum wheat, FOB Port la Nouvelle was not quoted for the thirth consecutive week.
French durum wheat – basis La Pallice, was at $531.87 /mt, up $13.72 from prior week.
Spanish durum wheat Sevilla (DepSilo), was at $617.65/mt, up $10.36 from prior week.
Italian durum wheat Bologna (Delivered to first customer), was valued this week at $621.08 per tonne up $16.02 from past week.
German wheat (Depsilo) with 12.5 pro was at $339.71/mt, up $26.58 from last week.
Baltic wheat (Delivery First) was at $316.83/mt, up $23.77.
Corn delivered Bordeaux Spot – July 2021 basis was at $282.51 per tonne, down $4.97 from prior week.
FOB Rhin Spot – July 2021 basis was at $296.24 per tonne, up $0.95 week on week.
Feed barley delivered Rouen – July 2021 basis was at 276.79 $/t, down $9.57.
Malting barley FOB Creil Spot – July 2021 basis was at $400 per tonne, up $10/t from prior week.
Rapessed FOB Moselle Spot – Flat – 2021 harvest was at 813.24$/ton, up $35.46 compared to prior week.
Standard sunseed delivered St Nazaire Spot – Flat – 2021 harvest was up 12.72$ from prior week at $709.16 per tonne.
European FOB prices, in US dollar, gained this week by the strength of the euro which posted a biggest weekly rise.
(Eur/USD = 1.1438).
From the Black Sea basin, Russian wheat export prices fell for a third week in a row, past week.
An increasingly weaker ruble against the dollar and tensions between Moscow and the West continued to weigh on wheat export prices.
Indeed, according to the IKAR, Russian wheat with 12.5% protein content loading from Black Sea ports for supply in March stood at $325 a tonne free on board (FOB) last week, down $1 from the previous week.
According to SovEcon wheat export price, was valued at $330 a tonne, $1 down from prior week.
Barley price, in contrast, was up $1 at $296 a tonne.
The other Russian data provided by Sovecon and IKAR have seen:
The domestic 3rd class wheat, European part of Russia, excluded delivery, at 15,200 +225 rbls roubles/t ($195.83) (Sovecon);
Sunflower seeds at 37,550 rbls/t + 1,350 rbls (Sovecon);
Domestic sunflower oil at 88,175 rbls/t +1,675 rbls (Sovecon);
Export sunflower oil at $1,380/t +$25 (IKAR);
Soybeans at 44,550 rbls/t +650 rbls (Sovecon);
White sugar, Russia’s south, at $639.7/t -$13 (IKAR).
($1 = 76.0472 roubles)
Meantime, the export duty for wheat, barley and corn during the week of February 09-15, 2022, will be $93.2 on wheat, $74.3 on barley and $52.7 on corn.
Indicative prices will be $332.2 for wheat, $289.8 for barley and $260.4 for corn.
That is compared, with prior week (Feb 02-08) when the tax was $93.2 for wheat, $74.60 for barley and $49.2 for corn, while indicative price were $334.2 for wheat, $291.7 for barley and $255.3 for corn.
Also, Russia has set its export tax for sunflower oil at $260.1 per tonne for March, up from $251.4 per tonne in February, the agriculture ministry said on Tuesday.
The government decided to launch a formula-based tax from Sept. 1 for one year as part of measures it hopes will help to stabilise domestic food price inflation.
The March tax is based on an indicative price of $1,371.7 per tonne, the ministry said.
In Ukraine, as of February 02, 2022, wheat prices were at $307/t, down $5 from prior week.
Corn price was at $287 per tonne, up $2/t week on week.
Barley was valued at 302 $/t, up $4 from last week.
Ukrainian wheat prices have plummeted this week in local and export markets, despite tensions easing in the Black Sea region, with a revival in global demand for Ukrainian old-crop product remaining in question in the light of depleted milling wheat stocks and strong competition on the feed wheat market.
According to the Argus Media, Ukraine spot fob wheat price for 11.5pc protein grade (UW1) has dropped by $12/t on the week to close 2 February at $311/t — its lowest since 20 October last year.
Meanwhile, Ukraine’s spot cpt price for product (UW2) has fallen by $15/t week on week to close today at $288/t — its lowest since mid-September last year.
From Australia, price movements for feedgrains in eastern Australia were modest this week as the export market remains preoccupied with execution for nearby shipment, and domestic consumers hold off buying in the hope of a price softening.
Fuelling their hopes in the south is the strong and early run on growers buying inputs for the upcoming winter crop plant, often as the backload on a grain delivery.
In the north, growers continue to push barley and off-spec wheat into the market as they make way for a big sorghum crop which for most growers is getting bigger with the benefit of late rain.
Particularly, indicative delivered prices in Australian dollars per tonne were:
Barley Downs: (Nearby) $290, steady from Jan 27;
SFW wheat Downs: (Nearby) $310, up $5 from Jan 27;
Sorghum Downs: (Nearby) $292, down $3 from Jan 27;
Barley Melbourne: (Nearby) $318, up $3 from Jan 27;
ASW wheat Melbourne: (Nearby) $375 down $5 from Jan 27.
SFW wheat Melbourne: (Nearby) $340 down $5 from Jan 27.
(AUD/USD=> US$0.7140).
On the international trade scene, South Korea’s Major Feedmill Group (MFG) purchased about 110,000 tonnes of animal feed wheat in private deals without issuing an international tender.
Some 55,000 tonnes expected to be sourced from India was purchased at $328.50 a tonne c&f plus a $2.00 a tonne surcharge for additional port unloading.
Shipment was by April 30 and seller was believed to be trading house CJ International.
Another 55,000 tonnes can be sourced from optional origins but not India.
It was bought at $331.90 a tonne c&f plus a $2.00 a tonne surcharge for additional port unloading.
Seller was believed to be ADM.
Shipment was from the U.S. Pacific Northwest coast, Australia or Canada between April 15-May 15 and from the Black Sea/east Europe between March 15-April 15.
The Korea Feed Association (KFA) purchased up to 65,000 tonnes of animal feed corn in an international tender on Friday but with the tonnage to be supplied varying according to origin supplied.
It was purchased in one consignment at an estimated $340.99 a tonne c&f including a surcharge for additional port unloading.
Seller was believed to be trading house Viterra with corn arrival in South Korea around May 25.
It was believed the KFA’s Busan section made no purchase of a second consignment of up to 69,000 tonnes of corn also sought in the tender for arrival in South Korea around May 20.
If the corn purchased by the KFA is sourced from the Black Sea region 63,000 tonnes can be supplied, if from South America 62,000 tonnes and if from South Africa 55,000 tonnes.
If sourced from the United States 65,000 tonnes can be supplied.
Shipment of the consignment was sought between April 21-May 10 if the corn is sourced from the U.S. Pacific Northwest coast, between April 1-20 if from the U.S. Gulf or Black Sea region/east Europe, between March 27-April 15 if from South America and between April 6-25 if from South Africa.
The tender was a sign Asian grain importers are resuming activities with some bargain-buying after the Lunar New Year holidays.
Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley.
The deadline for submission of price offers in the tender is Feb. 8.
Shipment is sought in a series of possible combinations in 60,000 tonne consignments.
Possible shipment combinations are between July 1-15, July 16-31, Aug. 1-15 and Aug. 16-31.
Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 tonnes of milling wheat.
The deadline for submission of price offers is Feb. 14.
Bangladesh has issued a series of wheat and rice tenders in recent months.
The country is importing grains to bolster reserves after extreme weather, from floods to heatwaves, damaged crops.
Price offers in the latest wheat tender are sought on CIF liner out terms, which include ship unloading costs for the seller.
The shipment is sought 40 days after the date of contract signing.
The wheat can be sourced from any worldwide origins except Israel and is sought for shipment to two ports, Chattogram and Mongla.
Tunisia’s state grains agency is believed to have purchased about 100,000 tonnes of soft wheat, 75,000 tonnes of durum and 75,000 tonnes of barley in a international tender which closed on Wednesday.
The grains can all be sourced from optional origins.
The soft wheat was sought in four 25,000 tonne consignments for shipment between March 20 and April 25, depending on origin supplied.
One wheat consignment was said to have been bought from Cargill at $350.64, Casillo at $348.69 and also a second consignment from Casillo at $350.69 and from Lecureur at $350.77, with all prices dollars a tonne c&f.
The durum was sought in three consignments of 25,000 tonnes for shipment between Feb. 25 and March 30 also depending on origin supplied.
The durum was all said to have been bought from trading house Viterra, in three consignments at $643, $646 and $649 all per tonne c&f.
The barley was sought in three 25,000 tonne consignments for shipment between March 5 and April 15 depending on origin.
The barley was bought in three consignments, from Aston at $342, from Casillo at $332.69 and from Cargill at $339.70 all per tonne c&f.
Jordan’s state grain buyer made no purchase in an international tender for 120,000 tonnes of animal feed barley which closed on Wednesday.
A new tender with the same shipment positions is expected to be issued closing on Feb. 8.
Trading houses participating on Wednesday were believed to be CHS, Cargill and Viterra, with price offers not disclosed.
Turkey’s state grain board TMO has issued an international tender to purchase about 325,000 tonnes of animal feed corn.
The deadline for submission of price offers is Feb. 8.
Shipment is sought between Feb. 25 and March 15.
The corn is sought for unloading at the Turkish ports of Derince, Iskenderun, Mersin, Izmir, Bandirma, Tekirdag, Samsun and Karasu in a series of consignments of 25,000 tonnes.
The TMO reserves the right to buy up to 5% more or less than the tender volume at its own discretion.
Supplies already in Turkey can also be offered.
According to the FAO, the U.N. food agency, world food prices rebounded in January and remained near 10-year highs, led by a jump in the vegetable oils index.
Indeed, the Food and Agriculture Organization’s (FAO) food price index, which tracks the most globally traded food commodities, averaged 135.7 points last month against an upwardly revised 134.1 in December.
That figure was previously given as 133.7.
Particularly, FAO said its vegetable oils index rose 4.2% month-on-month in January to reach record levels.
The FAO dairy price index also increased 2.4%, its fifth consecutive monthly rise, with the steepest gains registered by skim milk powder and butter.
The cereal price index rose just 0.1%, with maize posting a 3.8% gain on the month, spurred by worries about persistent drought conditions in South America.
By contrast, world wheat prices fell 3.1% on the back of large harvests in Australia and Argentina.
Meat prices edged up in January, while sugar was the sole index to post a decrease, shedding 3.1% from the previous month due partly to favourable production prospects in major exporters India and Thailand.
Higher food prices have contributed to a broader surge in inflation, and the FAO has warned that the higher costs are putting poorer populations at risk in countries reliant on imports.
Meantime, FAO said it raised its projection of global cereal production in 2021 because of larger-than-previously estimated wheat outputs in Argentina and Australia, along with slightly higher production estimates in Russia and Ukraine.
Particularly, FAO raised its projection of global cereal production in 2021 to 2.793 billion tonnes from a previous estimate of 2.791 billion tonnes.
“For 2022, global wheat plantings are expected to expand, buoyed by mostly conducive weather conditions in the northern hemisphere, although high input costs could deter a larger expansion,” FAO said.
World cereal utilization in 2021/22 was forecast to rise 1.6% above the 2020/21 level, hitting 2.805 billion tonnes.
FAO’s forecast for world cereal stocks by the close of seasons in 2022 stood at 824 million tonnes, up 2.2 million tonnes since November and only slightly lower than their opening levels.
Watching next week market, cattle traders will begin the week adjusting for any surprise positions from Feb options expiration on Friday.
The Dalian futures market in China reopens after the Lunar New Year holiday week and will have some catching up to do.
USDA Export Inspections data will be released on Monday.
Weekly EIA data will be released on Wednesday.
USDA will also release their monthly WASDE supply/demand estimates on Wednesday, with traders expecting major revisions in South American production and export numbers.
The weekly Export Sales report is expected on Thursday.
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To all of you I wish you a good weekend
Today is the memorial of Agatha of Sicily (c. 231 – 251 AD).
She is a Christian saint.
Agatha was born in Catania, part of the Roman Province of Sicily, and was martyred c. 251. She is one of several virgin martyrs who are commemorated by name in the Canon of the Mass.
Agatha is the patron saint of Catania, Molise, Malta, San Marino, Gallipoli in Apulia, and Zamarramala, a municipality of the Province of Segovia in Spain.
She is also the patron saint of breast cancer patients, martyrs, wet nurses, bell-founders, and bakers, and is invoked against fire, earthquakes, and eruptions of Mount Etna.
W St. Agatha
Author: Sandro F. Puglisi
