GRAIN & PRICES WEEKLY REPORT

US farm markets, ended this week in a mixed mode.

Traders, indeed, continued to assess both the state of Russia/Ukraine tensions and South American weather forecasts, and this, amid the long weekend of President Day.

However, as we said in Friday report, the geopolitical risk on the Black Sea basin was already widely priced in and traders has been reluctant to maintain their positions during this long weekend.

Consequentially, wheat for exemple, lost some ground in Chicago, as a big wheat sale at the very end of the session occurred, with someone sold 5K contracts.

In contraxt, South America weather concerns remained apparently justified, as the size of the South American soybean crop may still be overestimated.

In this context, corn prices, in spite bounced around for most of the week, closed the Friday session only with a 0.5% gain for the week.

Soybeans rallied another 1.17% this week to close out the week above $16 for the first time since last May.

Soybean meal pulled back this week by 1,91%.

Soy oil was up 2.81% vs. last Friday.

The wheat complex posted mixed results this week, with bulls pulling KC higher by 1.33%.

However, both CBOT and MPLS wheat saw prices weaker, down around 0.1% respectively.

Going inside the numbers, corn futures were up 3.3 cents to $6.54/bu.

Soybean futures were up $0.185 at $16.02/bu.

The insurance for the next crops have seen so far, the guarantee prices for corn at $5.85 (versus $4.59 in 2021), for soybeans at $14.23 (versus $11.87 in 2021).

Insurance companies will likely pay 30% more for crop insurance this year versus last year.

Soymeal tumbled by $8,7/smt at $447.90 smt.

Soy oil soared by $1.85 cents at $67.57.

CBOT soft red winter (SRW) futures fell 0.08 cents to close at $7.97/bu.

KCBT hard red winter (HRW) futures were up 11 cents to end at $8.35/bu.

MGE hard red spring (HRS) futures eased 0.08 cents to close at

$9.61/bu.

Meantime, as of February 17, 2022, US corn 3YC (Gulf) was at $299/mt (up $1/mt from last week).

US soybean 2Y (Gulf) quoted at $631/mt (up $1/mt from last week).

US wheat No 2 Hard Red Winter (HRW) was valued at $383/mt (up $6/mt from last week).

US wheat No 2 Soft Red Winter (SRW) was at $346/mt (up $9/mt from last week).

Northern Durum offers from the Great Lakes for April/May 2022 was valued at at $595/MT ($16.19/bu) (down $40 from prior week).

Meantime, USDA reported the weekly average corn oil price was reported from 71.82 and 73 cents/lb regionally.

That compares to 71.63 to 72.40 cents seen regionally last week.

Ethanol cash prices were between $1.96 NB to $2.14/gal EC.

Stronger compared to prior week when ranged between $1.88 to $2.06.

DDGS FOB export quotes were $275 – $285/ton in NOLA and $298 in the PNW through the week that ended 2/18.

That is fairly even with last week’s $273 – $285 and $298/ton quotes respectively.

Meanwhile gasoline futures ended the week at $2.6483, that was down from $2.7070/gal posted last week.

USDA’s weekly biofuels report showed B100 prices averaged $5.70/gal.

That was well above last week’s $5.48/gal average price.

USDA’s weekly Crush report showed the estimated processing value of soybeans was $18.65/bu on $16.08 cash beans.

That compared to $18.73/bu reported prior week on $15.81 beans.

Meantime, corn basis bids remained mostly steady across the central U.S. on Friday but did firm 2 cents higher at an Illinois river terminal.

Soybean basis bids firmed a penny at an Illinois river terminal and improved 2 cents at an Ohio elevator while holding steady elsewhere across the central U.S..

As for wheat, basis this week was mixed in both the Gulf and the Pacific Northwest (PNW).

Traders noted that train logistics have improved substantially since the start of the year.

Export sales have been steady the last couple weeks allowing basis to remain relatively flat.

A lack of moisture in the Plains states has created some reluctance to sell wheat too far ahead is also keeping basis mostly flat.

Repairs and maintenance to locks on the Columbia River began this month.

Each year the Army Corps of Engineers performs routine maintenance along the PNW river system.

According to the Northwest Portland District project manager, repairs are going as planned.

The closure is expected to last until March 19.

The Columbia Snake River System is responsible for around 53% of all U.S. wheat exports bound for export.

In energy market, oil prices also ended the week mixed, as investors weighed a potential supply disruption resulting from the Russia-Ukraine crisis against the prospect of increased Iranian oil exports.

Thus, Brent crude futures settled 57 cents, or 0.6%, higher at $93.54 a barrel, while U.S. West Texas Intermediate (WTI) crude ended down 69 cents, or 0.5%, at $91.07 a barrel.

For the week, Brent posted a small 0.9% rise in its ninth weekly gain, while WTI fell 1.7% week, snapping an eight-week rally.

Both benchmarks hit their highest levels since September 2014 on Monday, but growing prospects of easing oil sanctions against Iran has weighed on the market.

In the freight market, the Baltic Exchange’s dry bulk sea freight index rose on Friday, helped by an uptick in capesize and panamax vessel rates.

The overall index, which factors in rates for capesize, panamax and supramax vessels, rose 78 points, or 4.1%, to 1,964.

However, the index dropped 0.7% for the week.

The capesize index jumped 228 points, or 15.8%, to 1,675.

However for the week the index fell 182 points or 9.8%.

Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, rose by $1,888 to $13,888.

The panamax index edged up 10 points to 2,375 on Friday, but posted for the week 28 points losse or by 1.16%.

Average daily earnings for panamaxes, which ferry 60,000-70,000 tonne coal or grain cargoes, rose $87 to $21,375.

The supramax index fell by 1 point to 2,325 on Friday, but went home with 167 points gains or 7.74% .

On week 7, freight rates continued to decrease in the Azov-Black Sea region.

Thus, the rate for a 3K wheat parcel from Azov to Marmara Sea ports is $33 per ton, Sea Lines shipbrokers report.

Many traders expected February 15, the date when export quotas were introduced on, in a hope that the market situation would change for the better and there would be more active trade for other grain crops.

However, at the moment there is no significant improvement in the situation, the number of new contracts still remains at a low level.

Charterers who have received a quota for the export of wheat and corn begin to plan shipments, but without much haste, so as not to warm up the freight market.

Regarding the main destinations of shipments, according to Sea Lines, the most frequent requests are to Greece, and demand has also started to recover in the Turkish market.

According to Sea Lines, on week 7, freight rates for wheat parcels from Azov make $31 to the Black Sea, $33 to Marmara, $51 to Mersin and $54 to Egypt.

Freight rates from Rostov AB (after bridge) are $1 above, from Rostov BB (before bridge) the same, from Yeisk and Taganrog $1 below, and from Temryuk $3 below those from the port of Azov.

In the Caspian, freight rates went down to some destinations.

On week 7, freight rates for shipping corn by 3,000 dwt bulkers to Iran make $28 from Aktau, $32 from Makhachkala, and $40 from Astrakhan.

In equities markets, U.S. stock indexes on Friday fell to 3-week lows and closed moderately lower, as under pressure from escalating Russia-Ukraine tensions.

Friday’s U.S. economic data was mixed for stocks.

On the bearish side, Jan leading indicators unexpectedly fell -0.3% m/m, weaker than expectations of a +0.2% increase and the biggest decline in 1-3/4 years.

On the positive side, U.S. Jan existing home sales unexpectedly rose +6.7% m/m to a 1-year high of 6.50 million, stronger than expectations of a -1.3% m/m decline to 6.10 million.

Weakness in technology stocks weighed on the overall market Friday, despite lower T-note yields.

The Nasdaq indeed, fell sharply, pulled down by declines in high-growth stocks, including Apple, Amazon and Microsoft.

Intel Corp tumbled 5.3% to its lowest since 2020.

Roku Inc slumped 22%.

DraftKings Inc also fell 22%.

Speculation about the Federal Reserve’s next move also weighed on equities.

Hawkish comments from Fed Governor Brainard, indeed, were bearish for stocks when she said it’s “appropriate” for the Fed to begin a series of interest rate hikes in March, and she sees a runoff of the Fed’s balance sheet starting in the next few FOMC meetings.

Also, New York Fed Bank President John Williams said earlier in the day it would be appropriate to hike interest rates in March, without mentioning the magnitude.

In this context, the Dow Jones Industrial Average fell 0.68% to end at 34,079.18 points, while the S&P 500 lost 0.72% to 4,348.87.

The Nasdaq Composite dropped 1.23% to 13,548.07.

The indexes logged weekly declines for the second straight week.

For the week, the S&P 500 fell 1.6%, the Dow lost 1.9% and the Nasdaq declined 1.8%.

The dollar index on Friday rose +0.249 (+0.26%) to close at 96.022.

However for the week lost 51 points, or 0.05%.

On the weather side, across the U.S., for the week of February 8 through 14th, weather was dry.

In Kansas, moderate drought degraded into severe drought in the central part of the state; neighboring Nebraska also saw conditions deteriorate.

In South Dakota a lack of snow cover and above normal temperatures resulted in dryer conditions.

The Standardized Precipitation Index (SPI) in North Dakota supported a 1-category improvement.

Extreme drought expanded in south-central Montana while slightly improving in the northeastern part of the state.

Washington and Oregon are unusually dry for this time of year.

Warmer than average temperatures coupled with a lack of rainfall led to a 1-categor degradation in Oregon.

Meantime, the latest 72-hour cumulative precipitation map from NOAA suggests that most of the Northern Plains, upper Midwest and Great Lakes Region will get some additional rain and/or snow between today and Tuesday.

The agency’s 8-to-14-day outlook expects seasonally dry weather to reemerge across the Midwest and Plains between February 25 and March 3, with widespread colder-than-normal conditions across most of the country likely during that time.

In Canada, as of February 14, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):

– for the N1 class CWRS 13.5% – $505.44 per tonne, up C$19.56/t from prior week;

– for the N2 class CWRS 13.0% – $497.49/t, up C$18.61 wow;

– for the N3 CWRS – $482.06/t, up C$13.43 from prior week.

As of February 14, 2022, for the N1 CWAD 13% (durum wheat first class) deferred average prices for delivery in April ’22 were at C$551.16 down C$40.42 per tonne week on week.

Export basis West Coast & Central SK soared from C$ 254.23 to 256.80 per tonne, as delivered FOB price Great Lakes was posted at C$ 807.76, up C$2 from prior week.

Meanwhile, as of February 16, 2022, durum wheat (CWAD) FOB price delivered in St. Lawrence, was valued at C$825.63 per tonne, down C$13.82 from prior week.

As of February 18, 2022, for the N1 CWAD 13% (durum wheat first class), average street prices in REGIONAL ZONES were at C$576.20 per tonne, down C$2.16 from prior week.

(1USD=Cnd$1.2702).

In South America, as of February 17, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $310, up $2 from prior week.

Argentina corn feed was up $2/t for the week, closing at $288.

Brazilian corn feed (Paranagua) was valued at $305, up $5 from prior week.

It should to note, that last week we posted for error $330. The correct price was $300.

Argentina feed barley, was unchanged at $315.

Argentina soybean was up $9 at $649.

Brazilian soybean rose $21 finishing the week at $638.

In Europe, the wheat contract rose 3 euros for the week closing to 271.75 euros per tonne.

That represent a weekly gain of 1.12% that added to 1.22% gains past week.

Corn prices eased 1 euros for the week, to close at 254 euros per tonne, shedding 0.39% for the week.

This is the thirth consecutive weaker week.

In rapeseed, May futures closed this week at 703.75€/t, up €12.25/t.

That was a 1.77% gain week on week.

March-22 UK feed wheat futures, rose £3.35 from prior week, closing at £222.5/t.

Meantime, as of February 17, 2022, FOB prices in US dollar for French wheat with 11.5% protein and February delivery, were at $311/mt, up $2 from prior week.

French durum wheat, FOB Port la Nouvelle was not quoted for the fifth consecutive week.

French durum wheat – basis La Pallice, was at $454.40/mt, down $48.39 from prior week.

Spanish durum wheat Sevilla (DepSilo), was at $602.08/mt, down $3.55 from prior week.

Italian durum wheat Bologna (Delivered to first customer), was valued this week at $592.99 per tonne down $24.07 from past week.

German wheat (Depsilo) with 12.5 pro was at $312.4/mt, down $10.98 from last week.

Baltic wheat (Delivery First) not quoted this week.

Corn delivered Bordeaux Spot – July 2021 basis was at $285.14 per tonne, down $3.96 from prior week.

FOB Rhin Spot – July 2021 basis was at $295.36 per tonne, up $0.54 week on week.

Feed barley delivered Rouen – July 2021 basis was at 281.73 $/t, up $2.91.

Malting barley FOB Creil Spot – July 2021 basis was at $380.56 per tonne, down $10.24/t from prior week.

Rapessed FOB Moselle Spot – Flat – 2021 harvest was at 811.10 $/ton, up $22.64 compared to prior week.

Standard sunseed delivered St Nazaire Spot – Flat – 2021 harvest was down 32.65 $ from prior week at $692.96 per tonne.

(Eur/USD = 1.1360 vs last week 1.1427).

From the Black Sea basin, Russian wheat export prices fell for a fifth consecutive week past week.

Indeed, according to IKAR, as of February 14, 2022, Russian wheat with 12.5% protein content loading from BlackSea ports for supply in late Feb-Mar stood at $318 a tonne free on board (FOB) last week.

That was down $1 from the previous week.

According to SovEcon, wheat export price was down $7 at $316 a tonne.

Export price for barley, was at $298 a tonne, meantime.

Domestic 3rd class wheat, European part of Russia, excludes delivery was at 15,050 roubles/t ($196.00), down 150 rbls or $5.22 per tonne, from prior week (Sovecon);

Sunflower seeds were at 37,375 rbls/t -100 rbls (Sovecon);

Domestic sunflower oil was at 89,500 rbls/t +1,000 rbls (Sovecon);

Export price for sunflower oil was at $1,385/t +$5 (Sovecon);

Export price sunflower oil was at $1,375/t -$5 (IKAR);

Soybeans were at 44,050 rbls/t -200 rbls (Sovecon);

White sugar, Russia’s south, was at $662.5/t +$10.2 (IKAR).

($1 = 76.7850 roubles).

Meantime, Russian Ag. Min has amended the export tax for wheat, barley and corn for the week of February 24, 2022 to March 2, 2022.

Particularly, the export duty will be $91 on wheat, $73.3 on barley and $52.2 on corn.

Indicative prices will be $330.1 for wheat, $289.8 for barley and $259.6 for corn.

That is compared, with prior week (Feb 16-23) when the tax was $92.8 for wheat, $74.1 for barley and $52.7 for corn, while indicative price were $332.7 for wheat, $290.9 for barley and $260.3 for corn.

In Ukraine, as of February 16, 2022, Ukraine wheat prices were at $299/t, down $1 from prior week.

Corn price was at $289 per tonne, up $3/t week on week.

Barley was valued at 297 $/t, down $2 from last week.

From Australia, indicative delivered prices in Australian dollars per tonne were:

Barley Downs: $288 unchanged from Feb 10;

SFW wheat Downs: $300, down $2 from Feb 10;

Sorghum Downs: $298, up $3 from Feb 10;

Barley Melbourne: $322, up $5 from Feb 10;

ASW wheat Melbourne: $365 down $3 from Feb 10.

SFW wheat Melbourne: $340 up $2 from Feb 10.

(AUD/USD=> US$0.7183).

On the international trade scene, Algeria’s state grains agency OAIC purchased around 700,000/720,000 tonnes of optional-origin milling wheat in an international tender that closed on Thursday.

Algeria, one of the world’s biggest wheat importers, does not disclose details of its tenders and reported results are based on assessments by traders.

Estimates for purchase prices in Algeria’s tender were around $346.50 to $345.50 a tonne, cost and freight (c&f) included, traders said, with some citing a higher price of $347 for a part of the purchase.

Black Sea origins were expected to be among the sources, but with perhaps a smaller volume of French origin.

However, chances for French wheat to fill part of the order were seen as limited due to competitive Black Sea prices and potential penalties for a mixed quality French crop, traders said.

Algeria buys wheat on an optional-origin basis, which means the seller has until the subsequent shipment period to choose the source of the grain.

The wheat is sought for shipment on April 1-15 and April 16-30 from the main supply regions including Europe.

If sourced from South America or Australia, shipment is one month earlier.

Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Thursday it had bought 180,000 tonnes of Romanian wheat in an international tender for shipment April 1-10, 2022.

Supplier were Viterra, Al Dahra and ADM for 60k tonnes each one, at $318 FOB, or $ 338.55 C&F.

However, it should to note that the lowest offer FOB presented was at $315.3 a tonne for 60,000 tonnes of Ukrainian wheat free on board (FOB).

The offer was presented by Posco International.

It was not choose, as the final C&F price, was higher.

Egypt’s state grains buyer GASC said on Wednesday it had bought 34,500 tonnes of vegetable oils in an international tender for arrival April 5-25.

GASC added that it had bought 28,500 tonnes of sunflower oil and 6,000 tonnes of soyoil.

Supplier were: Aston for 5,500 t of SFO at $1,463; Agric SA for 11,000 of SFO at $1,463; Viterra for 12,000 t of SFO at $1,463; Belluno for 6,000 of SBO at $1,567.

The tender for local vegetable oils has been canceled, traders said.

GASC had set a tender for local vegetable oils, seeking at least 3,000 tonnes of soyoil and 1,000 tonnes of sunflower oil for arrival April 1-20.

Japan purchased 54.000 t of food-quality wheat from the United States in a regular tender that closed Thursday.

The grain is for shipment between March 21 and April 20.

The Philippines purchased 46.000 t of animal feed wheat from Australia in an international tender that closed earlier this week.

The grain is for shipment in June and July.

The Taiwan Flour Millers’ Association purchased an estimated 54,920 tonnes of milling wheat to be sourced from the United States in a tender which closed on Friday.

The purchase involved a range of different wheat types in one consignment for shipment from the U.S. Pacific Northwest coast between April 4 and 18.

The purchase involved 32,360 tonnes of U.S. dark northern spring wheat of 14.5% protein content bought at $409.69 a tonne FOB U.S. Pacific Northwest coast, traders said.

Another 15,115 tonnes of hard red winter wheat of 12.5% protein was bought at $396.37 a tonne FOB and 7,445 tonnes of soft white wheat of 10.5% protein was bought at $406.29 a tonne FOB.

The consignment has an additional freight charge of $52.79 per tonne for ocean shipping from the U.S. Pacific Northwest coast to Taiwan.

Seller of all the wheat was trading house CHS, they said.

Watching next week market, next week starts with a holiday in USA.

Thus, both the government and markets will be off for Presidents Day.

Traders will begin the week adjusting to any breaking news from the long weekend, with grains traders reacting to the March options expiration from Friday.

Tuesday will have the day delayed Export Inspections report from USDA.

We will also get the Cold Storage report from NASS showing January 31 meat stocks on Tuesday afternoon.

Skip ahead to Thursday and EIA will release the weekly ethanol production and stocks report.

On Feb. 24-25, USDA will hold it’s annual Agricultural Outlook Forum.

USDA will release its initial forecast for the agricultural economy, commodity markets and trade in 2022 and discuss U.S. farm income situation