US farm markets ended this week on higher note.
The first 18-state NASS winter wheat crop condition ratings were released on Monday.
USDA rated 30% of U.S. winter wheat in good to excellent condition, of which the Hard Red Winter wheat states’ good-to-excellent ratings around to 23pc.
USDA categorises winter wheat as one, not as HRW and SRW.
The good-to-excellent rating for SRW were about circa 55pc, but the states of Texas and Oklahoma ratings were a shocking 13pc and 17pc respectively.
That was the worst start to the year since 1996.
Consequentially, not only wheat, but corn and soybeans were also motivated by move quickly.
On Friday, traders took a look at the WASDE numbers and found nothing threatening for corn.
No news, has been understood as good news, as a quiet WASDE, generally hints at future price opportunities, all the more reason, with lingering questions about U.S. acreage and Ukraine’s export potential.
Consequentially, that kept corn prices firm.
Meantime, a confirmed tightening in soybean stocks, pushed up oilseed markets.
Finally, in spite the WASDE report showed larger then expected US ending stocks for wheat by 25 mbu to 678 mbu, world carryout was down 3.09 MMT to 278.42 MMT.
Also, larger US ending stoks, were done via cuts to feed & residual and exports.
Thus, the wheat complex skyroketed.
Well, lets move on our usually “Grain & Prices weekly Report”.
Corn prices reversed the previous week’s losses, as nearby May was up 4.59% since last Friday.
Soybean May contract was up more than $1.06 or 6.71%.
The products gave a helping hand with soy meal up $18.20/ton or 4.04% and soyoil $3.92 higher or 5.51% from prior week.
Kansas wheat was the leader of the wheat complex, with May up 9.25% on the week.
Chicago was the next in line, rallying 6.81%.
MPLS, despite gained “only” 5.82% from prior week, was the only of the three to take out all of prior week’s losses.
Going inside the numbers, CBOT corn prices, closed up $0.338 at $7.69/bu.
CBOT soybean prices finished the week $1.063 stronger at $16.89/bu.
Soymeal rose by $18.2/smt for the week at $468.2 smt.
Soy oil lifted $3.92 cents, to close at $75.12.
May CBOT soft red winter (SRW) prices soared by $0.670 to close at $10.52/bu.
May KCBT hard red winter (HRW) prices jumped $0.938 ending at $11.07/bu.
May MGE hard red spring (HRS) prices gained $0.620 to close at $11.27/bu.
Meantime, as of April 7, 2022, US corn 3YC (Gulf) was at $352/mt (up $1/mt from last week).
US soybean 2Y (Gulf) quoted at $662/mt (up $9/mt from last week).
As for wheat, US wheat No 2 Hard Red Winter (HRW) was valued at $476/mt (up $17/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was at $426/mt (up $5/mt from last week).
The Northern Durum, continued to be offered from the Great Lakes for April/May 2022 at at $595/MT ($16.19/bu) (unchanged from prior week).
USDA’s National Ethanol report showed corn oil prices were slightly down this week as renged between 76.28 EC and 78.13 IO cents/lb.
That compares to 76.67 and 79.72 cents seen regionally last week.
DDGS FOB prices were also weaker, with NOLA quotes from $315 LW to $345, while PNW was $5 higer to $365/ton.
Past week DDGS FOB export quotes were $335 – $380/ton in NOLA and $360 in the PNW.
Ethanol cash prices were between $2.28 MI_SD to $2.40/gal EC.
That compare to prior week when they ranged between $2.22 MI to $2.41/gal EC.
Meanwhile gasoline futures ended the week at $3.0548, that was down from $3.1427/gal posted last week.
USDA’s weekly biofuels report showed B100 prices averaged $6.59, up from $6.50/gal past week’s.
USDA’s weekly Crush report showed the estimated processing value of soybeans was $20.45/bu on $16.98 cash beans.
That compared to $19.36/bu reported prior week on $15.89 beans.
Meantime, corn basis bids were steady to firm after rising 1 to 7 cents higher across five Midwestern locations on Friday.
Soybean basis bids were steady to firm after rising 1 to 9 cents higher at two interior river terminals and 6 cents higher at an Ohio elevator.
For wheat, basis this week was mixed in the Gulf and down in the Pacific Northwest (PNW).
Slow export demand weakened basis, though high interior freight costs continue to support basis levels.
In energy markets, oil prices rose 2% on Friday but notched their second straight weekly decline after countries announced plans to release crude from their strategic stocks.
Brent crude futures settled up $2.20, or 2.19%, at $102.78 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose $2.23 to $98.26.
For the week, Brent dropped 1.5% while WTI slid 1%.
For several weeks, the benchmarks have been at their most volatile since June 2020.
However, member nations of the International Energy Agency (IEA) will release 60 million barrels over the next six months, with the United States matching that amount as part of its 180 million barrel release announced in March.
Demand uncertainties added as Shanghai extended its lockdown to contend with fast-rising COVID-19 infections.
And that, has weighened on oil prices.
Further pressure came from the strengthening U.S. dollar, this week.
However, there’s some concern that this artificially lowering in prices, only going to increase demand and going to burn off that supply pretty quickly.
The release could also deter producers, OPEC and U.S. shale producers, from accelerating output increases.
Meantime, U.S. producers added 13 oil rigs in the week to April 8, data from oil services firm Baker Hughes showed, a third straight week of gains.
Russia, on its part, has found Asian buyers.
Russia’s production of oil and gas condensate, however, fell to 10.52 million barrels per day (bpd) for April 1-6 from a March average of 11.01 million bpd.
Western buyers, indeed, are shunning cargoes since the start of the conflict in Ukraine.
The U.S. Congress voted to ban Russian oil on Thursday, while the European Union is considering a ban.
Germany might be able to end Russian oil imports this year, Chancellor Olaf Scholz said.
On Thursday, European Union countries approved a ban on Russian coal imports, adding the bloc will now discuss sanctions on oil.
Meantime, money managers cut their net long U.S. crude futures and options positions in the week to April 5 by 3,147 contracts to 266,727, the U.S. Commodity Futures Trading Commission (CFTC) said.
In the freight markets, the Baltic Exchange’s dry bulk sea freight index fell for the 12th straight session on Friday as weakness in the supramax and panamax segments outweighed capesize gains.
The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, indeed, fell 6 points, or about 0.3%, to 2,055 points, its lowest since Feb. 28.
The index fell 12.8% over the week.
The capesize index added 27 points, or 1.9%, to 1,444 points, but was down 22.5% for the week.
Average daily earnings for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, increased by $226 to $11,979.
The panamax index slipped 1 point to 2,777 points, down almost 10% on the week.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, fell $6 to $24,997.
The supramax index dropped 45 points to 2,502 points, down 9.18% from last week.
On week 14, in contrast, there was a very sharp rise in freight rates in the Azov and Black Sea region.
The rate for a of 3K parcel of wheat from Azov to Marmara Sea ports is already $80 per ton, Sea Lines shipbrokers report.
The strong increase in rates began at the end of last week.
It is primarily due to the shortage of spot tonnage and high activity in the grain market.
In addition, some insurance companies have begun to increase fees for military risks, which has affected freight rates.
In the Black Sea, the freight market is also recording a significant increase, although the rates are much lower than in the Sea of Azov.
Active shipments of Ukrainian wheat are underway from the ports of Romania and Bulgaria.
Most market players are inclined to believe that in the coming weeks a sharp drop in freight prices is unlikely and there is a chance of maintaining the trend of freight growth due to the unstable situation in the region.
According to Sea Lines, on week 14, freight rates for wheat parcels from Azov made $78 to the Black Sea, $80 to Marmara, $95to Mersin and $97 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 remain stable.
On week 14, freight rates for shipping corn by 3,000 dwt bulkers to Iran make $20 from Aktau, $25 from Makhachkala, and $30 from Astrakhan.
In equity markets, Wall Street closed its first losing week in the last four with an up-and-down Friday.
Big tech stocks once again led the market lower, and the S&P 500 fell 11.93 points, or 0.27%, to 4,488.28 after wobbling much of the day.
The Dow Jones Industrial Average rose 137.55, or 0.4%, to 34,721.12.
The weakness for tech stocks, meanwhile, dragged the Nasdaq composite down 186.30, or 1.34%, to 13,711.00.
For the week, the S&P fell 1.16%, the Dow lost 0.28% and the Nasdaq shed 3.86%, as the index was hit after Fed officials raised concerns about rapid rate hikes causing a slowdown.
Amazon, Nvidia and Tesla were among the heaviest weights on the S&P 500, on Friday, and each dropped at least 2%.
Much of the market’s focus has been on the bond market, where expectations for a more aggressive Fed have sent yields to their highest levels in three years.
The 10-year yield climbed to 2.71% from 2.65% late Thursday.
It was at just 1.51% at the start of the year.
It could be set to rise further as the Fed not only halts but reverses its program to buy trillions of dollars of bonds.
Also, transport stocks retreated Friday after Bank of America warned that demand in the sector might be falling.
Strength in crude prices Friday boosted energy stocks, and a 2% rally in Home Depot helped push the Dow Jones Industrials higher.
In currency trade, the dollar on Friday rallied for the seventh consecutive session and posted a new 1-3/4 year high.
USD/JPY on Friday rose by +0.34 (+0.42%) to 123,92, climbing to a 1-1/2 week high as the yen weakened from rising T-note.
That is up from 122.54 posted last Friday.
Also, weak Japanese economic data weighed on the yen after Japan’s Mar consumer confidence unexpectedly fell -2.4 to a 14-month low of 32.8, weaker than expectations of an increase to 36.8.
EUR/USD on Friday rose by +0.0001 (+0.01%) to 1.0878 after fell to a 1-month low on dollar strength and weakening interest rate differentials for the euro.
The spread between the U.S. and German two-real real yields rose above 400 bp for the first time on expectations for the Fed to raise interest rates more aggressively than the ECB.
However, short-covering emerged Friday, and EUR/USD recovered its losses after Goldman Sachs said it saw the ECB raising interest rates as soon as July.
Goldman Sachs, indeed, predicts the ECB will raise interest rates in two 25 bp moves in September and December but may hike as soon as July.
Also, Friday’s Eurozone economic data was bullish for EUR/USD after Italy’s Feb retail sales rose +0.7% m/m, stronger than expectations of +0.4% m/m.
EUR/USD last week was at 1.1065.
The dollar index on Friday closed at 99.753 up 1.14% from 98.627 priors week.
On the weather side, above normal temperatures, below average precipitation, and high winds deteriorated drought conditions in Texas and Oklahoma this week.
Though long-term drought indicators remain, precipitation and cool temperatures helped ease shortterm drought conditions in Minnesota and some parts of North and South Dakota.
Weather across the Southern Plains remains variable, with precipitation and snowpack reducing drought conditions slightly in south-central Colorado and southwest Wyoming.
However, extreme drought expanded in southwest Kansas with less than 10% of normal precipitation.
In the western states, drought conditions worsened in Washington, Idaho, Montana, and California, including records set for the driest three-month period in the last 100 years.
Some additional moisture is on the way to parts of the Midwest and Plains between today and Tuesday.
NOAA’s 8-to-14-day outlook predicts a return to seasonally dry conditions for much of the central U.S. between April 15 and April 21, with widespread seasonally cold weather for most of the U.S. during this time.
On the demand side, weekly export sales data showed sales picking back up a little to 782,400 MT.
New crop sales were tallied at 145,200 MT, lower than the previous last week.
US old crop corn export commitments (shipped plus outstanding sales) are now at 54.437 MMT, 18% below last year at this time.
They are now 86% of the full year WASDE forecast, slightly behind the average pace of 88%.
Accumulated exports are 53% of the updated WASDE full year projection, now 1% above normal.
As for soybean, the report tallied old crop bean bookings in the week that ended on 3/31 at 800,700 MT, with new crop at 298,500 MT.
US soybean exporters have either sold or shipped 56.143 MMT of the 21/22 crop, now just 7% smaller than last year’s record buying pace.
Total export commitments are 97.5% of the USDA full year estimate, outpacing the 93% average for this date.
Shipments are 77.1% of that projection, matching than the average pace.
For products, USDA reported 66,226 MT of soymeal was sold for export during the week that ended 3/31.
Meal exports were reported at 237,761 MT for the week and 6.306 MMT for the year.
For bean oil, FAS data had 6,248 MT of old crop sales from the week of 3/31.
Soy oil shipments were 50,200 MT, which was a 56-week high.
Accumulated soy oil exports reached 497,460 MT.
As for wheat, the report showed old crop wheat sales slowing again to 156,300 MT for the week ending 3/31.
New crop sales were down vs. the previous week 223,000 MT.
Old crop wheat export commitments are now 19.420 MMT.
That is just 91% of USDA’s newly revised full year forecast.
They would normally be 100% by now.
Shipments to date are still 22% smaller than a year ago, at 16.011 MMT.
That is 75% of the USDA projection vs the average of 80% by now.
In this context, Friday’s Commitment of Traders report tallied managed money spec funds at a net long 362,306 contracts as of 4/5.
That was up 7,702 contracts from the previous week.
Commercial corn hedgers were adding coverage, with 45,765 (3%) more hedges added through the week.
On net, they extended their net short by 6,599 contracts to 700,869 contracts.
As for soybean, the report showed money managers in soybean futures and options adding back 7,382 contracts to their net long in the week ending April 5.
That took the net position to long 163,655 contracts.
The commercials were closing short hedges, with a 6,907 contract weaker net short wk/wk.
The funds were 596 contracts more net long to 100,544 contracts in soymeal.
For soyoil, managed money was reported 76,750 contracts net long, or a 1,851 reduction wk/wk.
For wheat the report indicated spec traders in CBT wheat futures and options backing off their marginal net long position by 5,480 contracts as of April 5 to 13,959 contracts.
For KC wheat, they trimmed 281 contracts from their net long position in that week, taking it to 45,029 contracts.
Managed money firms were 18,255 contracts net long in spring wheat, as the week saw 3,909 new spec longs opened.
From Canada, as of April 4, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $541.06 per tonne, up C$1.66/t from prior week;
– for the N2 class CWRS 13.0% – $534.63/t, up C$2.6 wow;
– for the N3 CWRS – $530.03/t, down C$16.75 from prior week.
As of April 4, 2022, for the N1 CWAD 13% (durum wheat first class) deferred average prices for delivery in April-May ’22 were at C$551.16 unchanged week on week.
Meanwhile, export basis West Coast & Central SK decrease from C$ 195.25 to 192.45 per tonne, as delivered FOB price Great Lakes was posted at C$ 743.61, down C$2.79 from prior week.
Meanwhile, as of April 6, 2022, the durum wheat (CWAD) FOB price for delivery in St. Lawrence, was at C$761.63 per tonne up C$ 16.75 from prior week.
As of April 8, 2022, for the N1 CWAD 13% (durum wheat first class), average street prices in REGIONAL ZONES were at C$575.26 per tonne, down C$2.24 from prior week.
(1USD=Cnd$1.2589 up from past week when was 1.2519).
From South America, as of March 31, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $396 unchanged from prior week.
Argentina corn feed was down $2/t for the week, closing at $311.
Brazilian corn feed (Paranagua) was valued at $355, down $1 from prior week.
Argentina feed barley, was down $10/t to $365.
Argentina soybean was up $6 at $645.
Brazilian soybean rose $9 finishing the week at $655.
In Europe, May wheat price on Euronext rose 7.5 euros per tonne from prior week, to close at 372.75 euros.
June corn price was 7 euros higher for the week, closing at 322.5 euros per ton.
Rapeseed May 2022 contract gained €14.25/t for the week, to close €961/t.
May-22 UK feed wheat futures, lifted £7.35 from prior week, closing at £307.75/t.
Meantime, as of April 7, 2022, FOB prices in US dollar for French wheat with 11.5% protein and April delivery, were at $411/mt, down $16 from prior week.
French durum wheat, FOB Port la Nouvelle continued to be not quote.
French durum wheat – basis La Pallice, was at $446/mt, down $51.93 from prior week.
Spanish durum wheat Sevilla (DepSilo), NA.
Italian durum wheat Bologna (Delivered to first customer), was valued this week at $574.36 per tonne down $4.34 from past week.
German wheat (Depsilo) with 12.5 pro was at $438.38 per tonne, down $26.35 from prior week.
Baltic wheat (Delivery First) was at $364.41/t, down $14 from prior week.
Corn, delivered Bordeaux port was at $366.59 per tonne, down $15.15/t from past week.
Feed barley FOB Rouen was at 391.61$/t, down $28.39 per tonne.
Malting barley FOB Creil Spot – July 2021 basis was at $451.44 per tonne, down $7.76/t from prior week.
Rapessed FOB Moselle – 2021 harvest was at 1056.25$/ton, down $11.52 compared to prior week.
Standard sunseed FOB Bordeaux – 2021 harvest was down 56$ from prior week at $1039 per tonne.
(Eur/USD = 1.0878 vs last week 1.1041).
From the Black Sea basin, as of April 4, according to the IKAR, indeed, Russian wheat with 12.5% protein content from the Black Sea ports fell by $22 per tonnes to $368/t free on board (FOB)
Domestic 3rd class wheat, European part of Russia, excludes delivery was at 17,075 rbls/t -775 rbls ($207.91) according to SovEcon.
Sunflower seeds were valued at 49,125 rbls/t +225 rbls (Sovecon);
Domestic sunflower oil was at 128,350 rbls/t -5,000 rbls (Sovecon); Export price for sunflower oil was at $1,850/t unchanged, according to IKAR;
Export price for sunflower oil was at $1,850/t -$200 oil according to Sovecon;
Soybeans were at 53,100 rbls/t -2,200 rbls (Sovecon);
White sugar, Russia’s south was at $845/t +$33 (IKAR).
($1 = 76.0800 roubles).
Meantime, the Russian Ag. Min has amended the export tax for wheat, barley and corn for the week of April 13-19, 2022.
Particularly, the export duty will be $101.4 on wheat, $75.4 on barley and $70.6 on corn.
Indicative prices will be $344.9 for wheat, $292.8 for barley and $285.9 for corn.
That is compared, with prior week (April 6-12) when the tax was $96.1 for wheat, $75.4 for barley and $65.8 for corn, while indicative price were $337.3 for wheat, $292.8 for barley and $279 for corn.
In Ukraine, according to Svetlana Malysh by Refinitv, April delivery Ukraine corn prices, drafted to €240-245 per tonne DAP Constanta compared to €300-310 per tonne a week before.
Ukraine corn export prices lost €25 per tonne during the week and dropped to €245-255 per tonne on DAP Poland/Hungary border, she added.
Black Sea grain prices dropped on slow foreign demand, while new 2022 crop already in focus, she said.
Meantime, Romania corn quotes also fell to €330-335 per tonne FOB Constanta compared to €340-350 per tonne last week for May-June delivery.
From the Middle Kingdom, China this week has sold 533,449 tonnes of wheat, or 97.29% of total on offer, at an auction of state reserves, according to the National Food and Strategic Reserves Administration.
The average selling price was 2,857 yuan ($449.47) per tonne, the agency said in a statement.
China will sell 500,000 tonnes of imported soybeans from its state reserves on April 15, the National Grain Trade Center said in a notice on its website on Friday.
The sale, following an auction of the same amount of soybeans from reserves this week, is aimed at alleviating tight supply in the domestic market.
China started releasing imported soybeans from reserves in mid-March, as imports of the oilseed declined after bad weather delayed exports from South America.
Prices of soymeal had rallied on tight supplies.
Soybean arrivals have increased in recent weeks, however, easing tightness and pushing down soymeal prices.
This week’s 501,500 tons were planned to be auctioned on April 7, with 243,000 tons sold, with a trading rate of 48.45%, the highest at 5,060 y/t, the lowest at 4,710 y/t, and the average price at 4,871 y/t.
Auction reserve price of 4922 y/t.
($1 = 6.3564 Chinese yuan renminbi).
In Australia, indicative delivered prices in Australian dollars per tonne were:
Barley Downs: $360 up $2 from March 31;
SFW wheat Downs: $390, unchanged from March 31;
Sorghum Downs: $350, up $15 from March 31;
Barley Melbourne: $400, up $10 from March 31;
ASW wheat Melbourne: $420 up $12 from March 31.
SFW wheat Melbourne: $405 up $5 from March 31.
(AUD/USD=> US$0.7479).
APRIL WASDE SUMMARY
The USDA’s monthly WASDE update indicated no change to the US 21/22 corn carryout, leaving it at 1.44 bbu, vs. estimates of a 40 mbu cut.
USDA’s monthly S&D estimates showed a 25 mbu cut to feed and residual use, offset by a 25 mbu for ethanol and resulting in an unchange 1.44 bbu carryout.
Global corn data showed a net 2.9 MMT cut to corn export trade.
The total is now estimated at 197 MMT.
Most of the cut came via the Ukraine, with a 4.5 MMT cut to 23 MMT.
Brazilian shipments grabbed 1 of that.
China is now only forecasted to bring in 23 MMT of global corn, which is 3 MMT below USDA’s March forecast.
As for South America production, USDA lifted Brazil by 2 MMT to 116.
The trade was looking for a 700k MT increase on average, though was split between an increase and a decrease relative to March.
CONAB went with 115.6 MMT this week.
Argentina was left unchanged at 53 MMT.
Global corn carryout was estimated at 305.46 MMT, a bearish 4.5 MMT boost from last month while traders had expected a reduction.
As for soybean, USDA data was bullish this week with the WASDE showing a 25 mbu reduction to the old crop carryout at 260 mbu.
That was mainly due to higher projected exports.
Monthly WASDE data, indeed, showed USDA raised soybean exports by 25 mbu to 2.115 billion.
That is now just 100 mbu below their crush, which was unchanged from March.
The trade average guess was for 266 going in.
Brazil is forecasted to produce by 2 MMT to 125 MMT and ship 82.75 MMT.
Chinese imports were then 91.
The U.S. share increased by 1.2% points to 37%.
Global soy trade was estimated 3.3 MMT lower.
That came via a 2.75 MMT cut from Brazilian exports and a 3 MMT cut to Chinese imports.
Global bean stocks, however, were ultimately 380k MT lighter to 89.58 MMT.
The trade had expected a cut to 88.5 MMT.
As for wheat the report from USDA showed larger expected US ending stocks for wheat by 25 mbu to 678 mbu.
That was done via cuts to feed & residual by 10 mbu to 100 and exports by 15 mbu to 785.
For SRW that was a 5 mbu cut to 110, and HRW exports were reduced 10 to 310.
The projected season-average farm price (SAFP) is raised $0.10 per bushel to $7.60 on NASS prices reported to date and expectations for cash and futures prices for the remainder of 2021/22.
This would be the highest SAFP since 2012/13.
The global wheat outlook for 2021/22 is for slightly higher supplies, increased consumption, lower trade, and reduced ending stocks.
Supplies are increased by 0.7 million tons to 1,069.5 million on a combination of higher beginning stocks for Pakistan, Brazil, and Saudi Arabia and higher production for Pakistan and Argentina more than offsetting lower EU production.
Projected 2021/22 world consumption is raised 3.8 million tons to 791.1 million primarily on higher food, seed, and industrial (FSI) use for India.
Based on greater offtake from government stocks to food distribution programs, India’s FSI is raised 4.4 million tons to a record 100.9 million.
Projected 2021/22 global trade is lowered 3.0 million tons to 200.1 million as lower exports by the EU, Ukraine, the United States, and Kazakhstan are not completely offset by higher exports by Russia, Brazil, and Argentina.
EU exports are reduced 3.5 million tons to 34.0 million on a lower-than-expected pace.
Russia’s exports are raised 1.0 million tons to 33.0 million as it continues to export at competitive prices.
Ukraine’s exports are lowered 1.0 million tons to 19.0 million as its #BlackSea ports remain closed.
The majority of Ukraine’s exports have already been shipped with limited additional amounts expected for the remainder of 2021/22.
Projected 2021/22 world ending stocks are lowered 3.1 million tons to 278.4 million with India accounting for most of the reduction that is only partially offset by higher EU stocks.
Global stocks are projected at a 5-year low.
Meantime,
World food prices jumped nearly 13% in March to a new record high
War in Ukraine caused turmoil in markets for staple grains and edible oils, the U.N. food agency said on Friday.
Indeed, the Food and Agriculture Organization’s (FAO) food price index, which tracks the most globally traded food commodities, averaged 159.3 points last month versus an upwardly revised 141.4 for February.
The February figure was previously put at 140.7, which was a record at the time.
Particularly, the agency’s cereal price index climbed 17% in March to a record level while its vegetable oil index surged 23%, also registering its highest reading yet.
Sugar and dairy prices also rose sharply last month.
The FAO last month said food and feed prices could rise by up to 20% as a result of the conflict in Ukraine, raising the risk of increased malnutrition.
Disruption to supplies of crops from the Black Sea region has exacerbated price rises in food commodities, which were already running at 10-year highs before the war in Ukraine due to global harvest issues.
In separate cereal supply and demand estimates on Friday, the FAO cut its projection of world wheat production in 2022 to 784 million tonnes, from 790 million last month, as it factored in the possibility that at least 20% of Ukraine’s winter crop area would not be harvested.
The revised global wheat output estimate was nonetheless 1% above the previous year’s level, it said.
The agency lowered its projection of global cereals trade in the 2021/22 marketing year as increased exports from Argentina, India, the European Union and the United States were expected to only offset some of the disruption to Black Sea exports.
Thus, total cereal trade in 2021/22 was revised down by 14.6 million tonnes from the previous monthly outlook to 469 million tonnes, now 2% below the 2020/21 level.
Meantime, projected world cereal stocks at the end of 2021/22 were revised up by 15 million tonnes to nearly 851 million tonnes, mainly because of expectations that export disruption will lead to bigger stockpiles in Ukraine and Russia, the FAO added.
Watching next week market
is expected to be pretty mild on the report side of things.
It starts out with Monday showing Export inspections data in the morning, with the Crop Progress report in the afternoon.
EIA will publish their weekly production and stocks report for ethanol on Wednesday.
Export Sales data will be released on Thursday morning.
It is also the expiration of April Lean Hog futures and options.
The markets will be closed on Friday in observance of Good Friday.
