US farm markets, continued to be very volatile this week!
Corn futures rallied above $8 to close above that mark on a weekly basis for the first time since August 2012, approaching so to all time highs.
May deadline, indeed, was up 3.18% on the week, while December 3.69% higher.
Soybeans have seen an up and down week, yanked sometime up by soybean oil which made a splash, sometime down by soymeal, that was not as bullish.
Thus, soybean prices couldn’t pull out gains on old crop contracts this week with May down 0.45%, meanwhile, new crop November was up 0.64% week on week.
Soymeal, indeed, was the drag on the market again, down 3.99% from past Friday.
Soy oil, in contrast, rose to all time highs and were up 7.1% on the week.
Wheat was a mixed complex again this week, continuing the trend from last week.
Chicago wheat was down 2.04% since last Friday.
Kansas City HRW was the leader to the downside, showing a 4.24% losse.
MPLS was the strongest of the three markets, closing up by 0.09% on the week.
Chicago wheat futures, however, are up more then 40% in three months, and they had a third straight monthly gain.
The most-active wheat contract on the Chicago Board of Trade (CBOT), indeed, has gained almost 5% in April.
Corn had a fifth monthly gain, adding 8.5% this month, while soybeans are up 4.4%.
Going inside the numbers, CBOT corn prices, closed up $0.253 at $8.18/bu.
CBOT soybean prices finished the week $0.078 lower at $17.08/bu.
Soymeal fell by $18.3/smt for the week at $440.5 smt.
Soy oil gained $5.91 cents, to close at $89.17.
May CBOT soft red winter (SRW) prices shedded by $0.217 to close at $10.44/bu.
May KCBT hard red winter (HRW) prices fell $0.485 ending at $10.94/bu.
May MGE hard red spring (HRS) prices gained $0.01 to close at $11.61/bu.
Meantime, as of April 28, 2022, US corn 3YC (Gulf) was at $363/mt (up $5/mt from last week).
US soybean 2Y (Gulf) quoted at $676/mt (down $14/mt from last week).
As for wheat, US wheat No 2 Hard Red Winter (HRW) was valued at $497/mt (down $4/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was at $439/mt (up $2/mt from last week).
Per latest data released in USDA’s National Ethanol report, corn oil prices were up this week, as renged between 82 NB_SD and 83.63 IO cents/lb.
That compares to 80 and 82 cents seen regionally last week.
DDGS FOB prices were weaker, with NOLA quotes from $310 LW to $330, while PNW was unchanged to $410/ton.
Past week DDGS FOB export quotes were $320 – $338/ton in NOLA and $410 in the PNW.
Ethanol cash prices were between $2.64 SD to $2.83/gal EC.
That compare to prior week when they ranged between $2.71 SD to $2.89/gal EC.
Meanwhile gasoline futures ended the week at $3.5125, that was up from $3.2820/gal posted last week.
USDA’s weekly biofuels report showed B100 prices averaged $7.90, up from $7.37/gal past week’s.
USDA’s weekly Crush report showed the estimated processing value of soybeans was $21.31/bu on $17.32 cash beans.
That compared to $21.18/bu reported prior week on $17.40 beans.
In this context, corn basis bids were steady to firm on Friday after rising 2 cents higher at an Illinois ethanol plant and 2 to 5 cents higher at two interior river terminals.
Soybean basis bids tilted 4 cents lower at an Ohio elevator but held steady elsewhere across the central U.S. on Friday.
As for wheat, basis this week was flat in the Gulf and down slightly in the Pacific Northwest (PNW).
Basis was softer in the PNW as exporters try to entice more business and grain traders close long positions.
Basis was flat in the Gulf as exporters compete with domestic millers for supply.
Logistics continue to be a major obstacle.
The Surface Transportation Board (STB), indeed, hosted a two-day emergency public hearing this week to understand ongoing issues with U.S. based Class I railroads.
Freight rail in the U.S. has faced unprecedented challenges since the fall including significant delays and cancelled rail car deliveries.
Railroad executives have stated that they are unable to hire staff, but union officials argue that the railroads’ embrace of Precision Scheduled Railroading led to broad layoffs that created the staffing shortages in the first place.
Poor service by Class I railroads has been a leading cause of increased U.S. wheat basis in 2022 according to grain traders.
In energy markets, oil prices fell on Friday, reversing in volatile trade, pulled downward by the U.S. heating oil contract that plummeted by more than 20% at one point on the day of its expiration.
The front-month U.S. heating oil contract , which is a proxy for diesel prices, soared to a record high of $5.8595 a gallon before falling as low as $4.4067 a gallon.
Diesel futures have climbed as investors worry about tight supplies globally following the conflict in Ukraine.
The heating oil contract expired on Friday, along with the global Brent benchmark and U.S. gasoline futures .
Volumes in all three front-month contracts was low, creating outsized volatility in the market and leading to late-day sell-offs, analysts said.
The front-month heating oil contract’s volatility, indeed, was not mirrored in the more-active second-month U.S. heating oil contract , which gained $0.0088 a gallon to settle at $4.0172 a gallon.
In this context, the more-active second-month Brent crude futures contract fell 12 cents to settle at $107.14 a barrel.
The expiring front-month contract rose $1.75 to settle at $109.34 a barrel.
U.S. West Texas Intermediate crude , which does not expire on Friday, fell 67 cents to settle at $104.69 a barrel, as traders sold energy contracts across the board.
However, both Brent and WTI rose for the week and posted their fifth straight monthly gain.
Brent, indeed, ended the month up 1.3%, while WTI ended up 4.4%.
Prices have been buoyed by fears that Russian supply will continue to be disrupted by the conflict in Ukraine.
Russian oil production, indeed, could fall by as much as 17% this year, as showed an economy ministry document this week, as Western sanctions hurt investments and exports in Russia.
The Organization of the Petroleum Exporting Countries and allies are likely to stick to their existing deal and agree another small output increase for June when it meets on May 5.
Still, there are bearish demand factors looming.
China, indeed, has shown no signs of easing lockdown measures which have hit its economy and global supply chains.
Also, the oil and gas rig count, an indicator of future supply, showed U.S. oil rigs rose by three to 552 this week.
In freight markets, the Baltic Exchange’s main sea freight index rose on Friday, and was set to gain for a third straight month on strength in the panamax segment.
The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, indeed, rose 1 points, or 0.04%, to 2,404 points.
It added nearly 2% this month.
The Capesize market had a positive week overall with the BCI and 5TC route average at 2003 points and $16,609, closing at 2,136 and $17,713, despite on Friday fell 13 points, or 0.6%.
The first half of the week remained positive amid strong support from the Pacific.
The C5 West Australia to China trade continued to climb from last week, but lost ground from the high of $12.245 gradually to below $12 by the weekend.
It was reported that in first quarter of 2022, China’s iron ore imports from Brazil were down a massive 24% year-on-year, which was still significantly higher than the volumes from Australia.
Later in the week the market saw increased enquiry from Brazil, as well as west coast Africa.
The C3 Brazil to Qingdao run settled at $25.457 on Friday, which was a decline of close to a dollar compared with Monday.
The north Atlantic region was generally balanced, brokers said.
The index has risen nearly 22.1% in the month of April.
The market will return on Tuesday after a long weekend in both the east and west.
The panamax index gained 24 points, or 0.8%, to 2,938 points on Friday.
It fell about 6% for the month.
Overall, the Panamax market returned a lacklustre week with momentum lacking.
The Atlantic market contracted early on, then rebounded, as the week ended and bids in the north returned a little stronger.
An 81,000-dwt delivery Continent fixed midweek a fronthaul trip via US Gulf redelivery China at $37,000, typifying the mean average rate for route P2A on the week.
Asia, by contrast, had limited support on some of the longer round trips via NoPac and Australia route P3A lost $1,000 over the course of this week.
Rates on the shorter Indonesian round trips softened, with talk of an overage 76,000-dwt giving delivery China rumoured to have agreed a rate in the region of $13/14,000 levels for an Indonesian coal round.
Period news remained thin.
An 81,000-dwt agreed a rate of $30,000 for five to seven months trading at the start of the week, although other activity was very limited.
The supramax index fell 2 points to 2,734 points on Friday.
A rather positional market over the last week.
Whilst in the Atlantic healthy demand was seen from the US Gulf, other areas had a rather lacklustre feel.
Asia also saw split sentiment as from the south little fresh enquiry appeared from Indonesia.
Further north, with congestion still being seen in China, fresh tonnage position remained thin.
Period enquiry was healthy, a 63,000-dwt open China fixing one year at $31,000 and in the Atlantic another 63,000-dwt open US Gulf fixing 24 months trading at $24,500.
Strongest gains were seen from the US Gulf. A 63,000-dwt fixed from here for a trip to Sweden at around $60,000 and there was also healthy demand from North Asia.
A 56,000-dwt fixed from China to the Mediterranean at $35,000. However, it was a mixed bag from the Indian Ocean.
A 57,000-dwt open Chittagong fixed via EC India to China in the mid $17,000s during midweek and as the week closed a 63,900-dwt was heard fixed delivery Mumbai trip via Arabian Gulf redelivery Chittagong at $38,000.
As for Handysize, with mainly positive sentiment in both basins, the BHSI made gains.
This was largely due to the US Gulf which saw numbers increase day-on-day.
A 38,000-dwt fixed from Houston to the Continent with an intended cargo of wood pellets at $38,000.
And East Coast South also remained positive with a 38,000-dwt at Recalada rumoured to have fixed a trip to West Coast South America at $53,000.
Another unnamed large handy fixed at around $44,000 for a trip from Recalada to North Brazil.
A 37,000-dwt fixed from the UK to East Coast Mexico with an intended cargo of fertiliser at $24,000 for the first 40 days and $27,000 for the balance.
In South East Asia, a 37,000-dwt was fixed via North Australia to China in the high $20,000s.
Period activity saw a 32,000-dwt open in China fixing three to five months trading at $29,500 and a 37,000-dwt in Brazil fixing three to five months at $31,500 both worldwide redelivery.
On week 17, there is a sharp decrease in freight rates in the Azov and Black Sea region.
The freight level for shipment of a 3K parcel of wheat from Azov to Marmara sea ports has reached the level of $63 pmt.
Many charterers and shipowners expect that the Russian May holidays will be marked by a further reduction in freight to the level of the average 50ies, Sea Lines shipbrokers report.
The number of cargoes in the market is small, as the demand for grain from Turkey remains low.
More requests appear for the Italian direction.
Despite the opening of navigation on the Russian river a few weeks ago, this direction still remains unpopular.
So far, major players in the grain market, traditionally actively buying grain from the Volga region, do not express interest in buying goods from this region.
At the same time, the remnants of last year’s harvest are still not exported, and some companies plan to start shipping them in late May and early June, primarily to the Marmara Sea ports and Mersin.
According to Sea Lines, on week 17, freight rates for wheat parcels from Azov made $61 to the Black Sea, $63 to Marmara, $77 to Mersin and $78 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 on the previous week’s level.
On week 17, freight rates for shipping corn by 3,000 dwt bulkers to Iran make $21 from Aktau, $26 from Makhachkala, and $31 from Astrakhan.
In equity markets, Wall Street slid on Friday to its deepest daily losses since 2020, as Amazon slumped following a gloomy quarterly report, and as the biggest surge in monthly inflation since 2005 spooked investors already worried about rising interest rates.
Amazon.com Inc, indee, tumbled 14.05%.
Apple Inc, dropped 3.66%.
Chevron Corp dropped 3.16% after its first-quarter profit underwhelmed.
Exxon Mobil Corp slipped 2.24% after it took a $3.4 billion writedown due to its exit from Russia.
All 11 S&P 500 sector indexes fell, led lower by a 5.9% slide in Consumer Discretionary and a 4.9% drop in Real Estate.
The S&P 500 logged it largest one-day decline since June 2020.
The Nasdaq’s decline was its largest since September 2020.
The Nasdaq has lost about 13% in April, its worst monthly performance since the global financial crisis in 2008.
The S&P 500 has fallen 13% so far in 2022, its steepest four-month decline to start any year since 1939.
Thus, the S&P 500 declined 3.63% to ended the end week session at 4,131.93 points.
The Nasdaq declined 4.17% to 12,334.64 points on Friday, while Dow Jones Industrial Average declined 2.77% to 32,977.21 points.
For the week, the S&P 500 lost 3.3%, the Nasdaq shed 3.9% and the Dow declined 2.5%.
As we said, stocks also slumped on signs of faster U.S. wage inflation that bolsters expectations for the Fed to raise interest rates aggressively after Friday’s data showed the U.S. Q1 employment cost index rose more than expected at a record pace.
However, U.S economic data Friday was mixed for stocks.
Overall Q1 corporate earnings results have been mostly supportive, with 86% of the S&P 500 companies that have reported results beating estimates.
U.S. Q1 employment cost index rose a record +1.4% q/q (data from 1996), stronger than expectations of +1.1% q/q.
Data showed the personal consumption expenditures price index – the Fed’s favored measure of inflation – shot up 0.9% in March after climbing 0.5% in February.
The U.S. Mar core PCE deflator rose +5.2% y/y, weaker than expectations of +5.3% y/y.
The U.S. Apr MNI Chicago PMI fell -6.5 to 56.4, weaker than expectations of 62.0.
The University of Michigan U.S. Apr consumer sentiment was unexpectedly revised lower by -0.5 to 65.2, weaker than expectations of no change at 65.7.
Meantime, a more than +2% rally in China’s Shanghai Composite on Friday was bullish for U.S. stocks after China’s Politburo vowed to meet economic growth targets and support tech platform companies’ “healthy” development.
They also vowed to guarantee “supply chains in key sectors” and smooth transport logistics.
In currencies trading, the dollar index on Friday fell by -0.696 (-0.67%) to 102.963.
Month-end profit-taking weighed on the dollar Friday as it fell back from Thursday’s 5-1/4 year high.
The yuan rebounded from a 17-month low Friday and weighed on the dollar after China’s politburo vowed to take steps to boost China’s economy.
Mixed U.S. economic data Friday also sparked long liquidation in the dollar.
Thus, the EUR/USD on Friday rose by +0.0049 (+0.47%) to 1.0543.
EUR/USD Friday rose moderately as it consolidated above Thursday’s 5-1/4 year low.
Higher European government bond yields Friday sparked short-covering in the euro after Eurozone April core consumer prices rose at a record pace.
EUR/USD also garnered support on Friday’s data that showed Eurozone Q1 GDP expanding right on expectations.
The Eurozone Apr CPI of +7.5% y/y was right on expectations and unch from Mar at an all-time high.
Apr core CPI rose a record +3.5% y/y, stronger than expectations of +3.2% y/y.
Eurozone Q1 GDP rose +0.2% q/q and +5.0% y/y, right on expectations.
The German Mar import price index rose +31.2% y/y, stronger than expectations of +28.6% y/y and the fastest pace of increase in 47-1/2 years.
The USD/JPY on Friday fell by -0.99 (-0.76%) to 129.85.
USD/JPY Friday fell back from Thursday’s 20-year high on month-end profit-taking and ahead of next week’s Golden Week holidays in Japan.
Trading activity in USD/JPY was subdued Friday, with markets closed in Japan for the Showa Day holiday.
For the week, the EUR/USD fell 0.0251points or – 2.33%, while the USD/JPY gained 1.28 points or + 0.99%.
On the weather side, weather this week mostly mirrored last week.
In the northern Plains states, more snow delayed spring planting in western North Dakota, southeastern Montana, northwestern South Dakota, and parts of Wyoming.
In eastern North Dakota, heavy rain on frozen soil caused extensive flooding.
In the central Plains, high winds continued to blow dust and fan wildfires in Nebraska.
In the southern Plains states, hot and windy weather withered the remaining soil moisture and further stressed HRW and HW wheat conditions.
Texas leads the country in topsoil moisture deficits. In the PNW, beneficial rain continuing to fall across the area.
More thunderstorms and heavy rains are expected to rake across the Midwest and Plains over the next several days.
An area stretching from Oklahoma up through North Dakota could gather another 1.5” or more between Saturday and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA.
The agency’s 8-to-14-day outlook predicts seasonally wet weather will stick around the Northern Plains between May 6 and May 12, with cooler-than-normal conditions likely for much of the Corn Belt during that time.
On the supply side, the U.S. Department of Agriculture on Monday rated 27% of U.S. winter wheat in good to excellent condition, down three percentage points from the prior week and the lowest for this time of year since 1989, as drought persists in the Plains wheat belt.
The figure also fell below the lowest in a range of analyst expectations.
“The winter wheat conditions were probably the most surprising, dropping three points”.
In Kansas, the top U.S. winter wheat producer, the USDA rated 26% of the crop as good to excellent, down from 33% a week earlier.
Ratings also declined in Oklahoma, Nebraska and South Dakota, but improved in Colorado, Montana and Texas.
The weekly NASS Crop Progress report showed 11% of winter wheat had headed as of 4/24.
That compares with 19% on average.
About 70% of the U.S. winter wheat crop was in an area experiencing drought as of April 19, the government said.
In the Midwest, cool and wet conditions slowed corn and soybean planting.
The USDA said the U.S. corn crop was 7% seeded by Sunday, below the average analyst estimate of 9% and the five-year average of 15%.
That was up from 4% prior week, on expedient pace in North Carolina, TN, and KS.
In IA, 2% of corn fields were planted compared to their 15% average.
In NE, 10% of corn fields were planted as of 4/24 compared to 11% on average.
NASS also reported 2% of the crop had emerged.
The average is for 3%.
Sorghum planting progress was 19% complete, compared to the 21% average pace.
TX was 63% planted for 22/23 milo.
Oats planted was reported at 39% vs. the five-year average of 48%, and 27% of oats had emerged as of April 24, compared with 32% for the previous five-year average.
U.S. soybean planting was 3% complete, matching trade expectations.
That was up from 1% prior week, but behind the five-year average of 5%.
The U.S. spring wheat crop was 13% planted up from 8% prior week, the USDA said.
That was ahead of the average analyst estimate of 12% but lagging the five-year average of 15%.
USDA’s Monday report also indicated that nationwide, topsoil moisture is rated as 50% adequate and 16% surplus.
The previous year was 59% adequate and 7% surplus.
In this context, planting progress should continue to be slow with rain in the forecast for much of the Corn Belt over the next week.
On the other hand, the overflow of this low pressure system on the HRW wheat growing area slightly relieves recent concerns and weighs on wheat prices in Chicago and Kansas City.
Meantime, the Biden administration is asking Congress to approve $500 million for the farm sector, in a bid to woo U.S. wheat producers to double-crop their fields, and boost how much the federal government will spend on short-term loans to farmers who grow certain food crops.
On the demand side, weekly EIA data from the week of 4/22 showed a 16k barrel per day increase to 963k barrels per day.
That was still the second, to last week, lowest in 30+ weeks.
Ethanol stocks from the EIA report were down another 377k barrels to 23.965 million barrels, a 15-week low.
Weekly FAS data showed 866,755 MT of old crop corn was booked during the week that ended 4/21.
That was just below the range of expectations.
China was the top buyer from the week with 729k MT, though 735k MT were previously announced.
For new crop sales, the weekly report showed 843,440 MT were booked.
That included 802k MT of previously known business to China and Mexico.
The total 22/23 forward book was 4.2 MMT as of 4/21, up 56% yr/yr.
Corn export shipments were at 1,562,100 MT.
That was up 31% from the previous week, but unchanged from the prior 4-week average and down 19% from the same week last year.
With 19 weeks remaining, accumulated exports reached 38.132 MMT or 1.501 bbu.
To match USDA’s expected 2.85 bbu pace, exports need to average 1.8 MMT or 70.9 mbu per week.
There were 19.4 MMT or 763 mbu of corn sales on the books as of 4/21.
As for soybean, USDA reported 481,317 MT of old crop soybeans were sold during the week that ended 4/21.
That was up 5% from the previous week, but down 37% from the prior 4-week average.
However, it is still up 64% from the same week last year.
For new crop, the USDA reported 580k MT of sales.
That left total forward business at 10.74 MMT or 62% above forward sales for the current season at the same time last year.
Of that, China holds 7 MMT on the books for 22/23.
Exports of 710,900 MT were down 20% from the previous week and 10% from the prior 4-week average.
For the products, the weekly FAS data release had soymeal sales at 202,985 MT for 21/22 delivery and none for NMY.
Soymeal exports were tallied at 251.8k MT through the week, taking the MYTD total to 6987 MMT.
In soy oil, exporters sold 3,480 MT during the week of 4/21.
9,953 MT of soy oil was shipped through the week leaving the season’s total at 515,867 MT as of 4/21.
That trails last year’s pace by 7.4%.
As for wheat, USDA reported 32,324 MT of wheat was sold for export during the week that ended 4/21.
That was up 23% from the previous week, but down 65% from the prior 4-week average.
However, it was within the max 175k MT expected.
Exports of 246,000 MT were down 51% from the previous week, 35% from the prior 4-week average and 55% below the same week last year.
That left the MYTD wheat export pace at 16.896 MMT (621 mbu), or 164 mbu under USDA’s forecast (discounting wheat products) with 5+ weeks left.
For new crop wheat export business, the Export Sales report showed 124,320 MT were sold during the week that ended 4/21.
USDA has 2.265 MMT of 22/23 wheat sales on the books, which is 14% below last year’s forward sales pace.
Meantime, private exporters reported to the USDA, having sold 1,088,000 metric tons of corn for delivery to China.
Of the total, 476,000 metric tons is for delivery during the 2021/2022 marketing year and 612,000 metric tons is for delivery during the 2022/2023 marketing year.
Meantime, the weekly Commitment of Traders report indicated spec trimming their large net long position by 18,455 contracts for the week ending on Tuesday, to 360,655 contracts.
Commercial corn traders closed 158k hedges through the week, with a 23,270 contract lighter net short of now 711,917 contracts.
As for soybean, Friday’s Commitment of Traders report indicated large managed money spec funds trimming their net long position as of April 26 by 6,246 contracts of futures and options.
They were net long 173,477 contracts at the close on Tuesday.
Commercial bean traders closed 43,156 hedges, with the short covering outweighing the long coverage by 11k for a now 268,934 contract net short.
As for wheat, Weekly CFTC data showed managed money slicing 290 contracts from their net long position in the week ending 4/26, leaving their Chicago net long at 14,180 contracts on that date.
They cut 4,434 contracts from their net long in KC to 45,407 contracts.
Managed money was 18,268 contracts net long in spring wheat as of the 4/26 settle.
That was a weekly slide of 1,599 contracts by way of long liquidation.
From Canada, Canadian farmers intend to plant fewer canola acres this spring, a move that could further tighten global supplies of edible oils at a time of already reduced availability, a government report showed on Tuesday.
The report, indeed, indicated a shift to increased wheat, corn, lentil and soybean plantings.
Particularly, canola plantings are expected to fall to 20.897 million acres, down 7.04% from 2021, Statistics Canada reported.
The estimate was below the average trade guess of 22.11 million acres.
Canada is the world’s biggest exporter of canola, used in food products as well as diesel fuel and animal feed.
Thus, ICE Canada November canola futures firmed after the report, jumping $10.20 to $1,092.00 per tonne.
Meantime, StatsCan acreage intentions data shows Canadian producers are planning 3.357m acres for ‘22 soybeans.
That is up 362k acres, or 0.68%, yr/yr.
All wheat plantings could reach 25.031 million acres, up 7.17% from last year, the agency said, beating analyst expectations of 24.15 million acres.
As for for durum, planting could reach 6.224 million acres, up from 5.530 million acres a year ago.
That is an 12.55% increase from last year.
To see some acres shift to wheat makes sense, as it is a lower production cost and slightly less risk.
Plantings of oats are expected to reach 3.992 million acres, up 16.62% from a year ago and above the 3.75 million acres anticipated by analysts.
The StatsCan acreage intentions report showed 22/23 corn area is forecasted at 3.715m acres.
That was above the average 3.41m expected and up 223k acres yr/yr.
Finally, barley areas would drop from 8.295 million acres to 7.491 million acres.
Separately, StatsCan reported March canola crush at 740k MT.
That is down 22.8% from March ’21, with MYTD crush trailing last season’s pace by 17.3% through March with 5.823 MMT.
Canola oil output in March was 308k MT according to StatsCan data.
Meantime, Canadian week 37 wheat exports were dismal at just 174.1k mt for a total export volume of 8.1 million mt.
Visible supplies in port locations continue to be 1.2 million mt.
Canada needs to export an average of 342k mt of wheat per week to meet the AAFC’s unchanged export number.
Canadian week 37 durum exports were at 34k mt, down from 42.900 mt prior week.
In this context, as of April 25, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $589.28 per tonne, up C$0.20/t from prior week;
– for the N2 class CWRS 13.0% – $581.76/t, down C$0.61 wow;
– for the N3 CWRS – $589.74/t, down C$10.28 from prior week.
As of April 25, 2022, for the N1 CWAD 13% (durum wheat first class) deferred average prices for delivery in May/Jun ’22 were at C$551.16 unchanged week on week.
Meanwhile, export basis West Coast & Central SK increased from C$ 200.72 to 209.03 per tonne, as delivered FOB price Great Lakes was posted at C$ 760.19, up C$8.31 from prior week.
As of April 27, 2022, Durum wheat – CA St Lawrence (CWAD) was valued at $580.00/t, down $20/t from prior week.
As of April 29, 2022, for the N1 CWAD 13% (durum wheat first class), average street prices in REGIONAL ZONES were at C$566.76 per tonne, down C$9.68 from prior week.
(1USD=Cnd$1.2858 up from past week when was 1.2716).
From South America, as of April 28, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $450, up $11 from prior week.
Argentina corn feed was up $5/t for the week, closing at $325.
Brazilian corn feed (Paranagua) was valued at $353, down $1 from prior week.
Argentina feed barley, was unchanged to $355.
Argentina soybean was down $13 at $656.
Brazilian soybean fell $18 finishing the week at $671.
In Europe, according to the USDA attaché, EU’s total grain production for MY 2022/23 is anticipated to amount to 286 MMT, down from the 293 MMT registered the previous season.
The favorable growing conditions across the EU are not anticipated to counter the reduction expected in area planted to grains.
Indeed, despite the overall good conditions, spring rains are particularly critical to avoid a tight grain balance.
War in Ukraine has stressed the EU grains market, which has responded with increases in price, demand contraction, and a surge of intra EU trade.
Increased grain exports, indeed, are forecast for MY2021/22, while the EU seeks alternative corn sources to replace Ukraine’s supply.
In this context, a new all-time high was traded this week on Euronext’s May 2022 maturity at €427.75/t, thus exceeding the previous record dated March 7th.
The movements has been as sudden as they are erratic and reflected the position closings, before May expiry for next May 10.
May rapeseed contract expired on Friday evening and this maturity will go down in history as the first to have crossed the 1,000 €/t mark, on 23 March and another historic high of €1,094/t on 22 April.
Meantime, the European Commission lowered its forecast for the 2022/23 European Union wheat harvest on Friday, but maintained its projection for record EU exports as war disrupts supply from Ukraine.
In monthly cereal supply and demand estimates, indeed, the Commission cut its outlook for usable production of common wheat, or soft wheat, in the 2022/23 season to 130.1 million tonnes from 131.3 million tonnes previously.
It kept its forecast for EU soft wheat exports in 2022/23 at 40 million tonnes, which would be an all-time high for the bloc.
Also, the Commission increased its projection of EU soft wheat stocks by the end of 2022/23, to 12.6 million tonnes from 12.2 million a month ago, reflecting an upward revision to expected supply this season.
For 2021/22, soft wheat ending stocks were raised to 14.8 million tonnes from 13.2 million previously as forecast exports were cut by 1 million tonnes and expected imports increased by 0.5 million tonnes.
Meantime, an estimated 91% of the French soft wheat crop was in good or excellent condition in the week to April 25, unchanged from 91% the previous week and above a year-earlier score of 81%, farm office FranceAgriMer said on Friday.
Ditto for durum wheat, rated to 83% in good or excellent condition.
Winter barley and spring barley were at 87% and 91% in good or excellent condition respectively, substantially unchanged from prior week.
Some 60% of the expected grain maize area had been planted, compared with 32% progress the previous week and 69% seen a year ago, the office said in its weekly cereal crop report.
In this context, May wheat price on Euronext fell 6.25 euros per tonne from prior week, to close at 400.75 euros.
September contract closed the week at €380/t up €13.25 from past week.
June corn price was 18.5 euros stronger for the week, closing at 349.25 euros per ton.
Rapeseed May 2022 contract expired on Friday at €991/t, while the August deadline, tumbled €21/t for the week, to close €860.25/t.
May-22 UK feed wheat futures, rose £7.5 from prior week, closing at £329.5 /t.
Meantime, as of April 28, 2022, FOB prices in US dollar for French wheat with 11.5% protein and May delivery, were at $437/mt, down $11 from prior week.
German wheat Deposilo Hamburg, was at $442.8/t, down $8.39/t from prior week.
Baltic wheat, delivery first Vilnius, was at $379.55/t, down $14.43/t from prior week.
French durum wheat – basis La Pallice, was at $442.80/mt, up $0.256 from prior week.
Italian durum wheat Bologna (Delivered to first customer), was valued this week at $554.56 per tonne down $15.35 from past week.
Corn, delivered Bordeaux port was at $360.57 per tonne, down $2.11/t from past week.
Corn FOB Rhin Spot – July 2021 basis was down $6.5 to $363.73.
Feed barley FOB Rouen was at 384.82$/t, down $39.38 per tonne.
Malting barley FOB Creil Spot – July 2021 basis was at $454.35 per tonne, down $5.4/t from prior week.
Rapessed FOB Moselle – 2021 harvest was at 1091.2$/ton, down $68.1 compared to prior week.
Standard sunseed FOB Bordeaux – 2021 harvest was down 37.19$ from prior week at $1053 per tonne.
(Eur/USD = 1.0543 vs last week 1.0794).
From the Black Sea basin, private firm SovEcon estimates the corn area 200k HA higher to 4.4m HA in Ukraine.
Also, SovEcon estimates Ukraine’s wheat crop 500k MT lighter to 23.1 MMT, citing the ongoing conflict.
Meantime, according to Ukraine’s deputy agriculture minister, Russian forces would have stolen “several hundred thousand tonnes” of grain in the areas of Ukraine they occupy.
Around 1.5 million tonnes of grain are stored in occupied territory and could be stolen by Russian forces he said.
The Kremlin, however, denied Ukraine’s allegations, saying it did not know where the information was coming from.
The agriculture ministry said on Friday that six regions in Ukraine had completed their early spring grain sowing despite the war.
The ministry gave no 2022 grain harvest forecast, while analysts see output at 41.4 million tonnes this year compared with 86 million tonnes in 2021.
Meantime, the consultancy APK-Inform said 2022/23 grain exports could total 33.2 million tonnes versus 45.5 million expected for the 2021/22 season that ends in June.
Ukraine’s grain exports have reached 45.709 million tonnes so far in the 2021/22 July-June season, the agriculture ministry said on Friday as it resumed publishing grain export data.
The ministry said the volume included 763,000 tonnes exported in April but gave no comparative figures.
Senior agriculture officials said this month that Ukraine exported up 300,000 tonnes of grain in March.
The ministry said the 2021/22 export volumes included 18.5 million tonnes of wheat, 21.1 million tonnes of corn and 5.7 million tonnes of barley.
April’s exports included 115,000 tonnes of wheat, 622,000 tonnes of corn and 25,000 tonnes of barley.
The ministry did not clarify how grain was delivered.
Agriculture and transport officials have said Ukraine aims to boost export capacity at Danube river ports, which would allow grain to be shipped to Romanian Black Sea ports.
On this wake, a cargo carrying more than 71,000 tonnes of Ukrainian corn finished loading in the Romanian Black Sea port of Constanta on Thursday, the first since the war started, port operator Comvex’s manager said.
In Russia, as of April 25, 2022, Russian wheat export prices with 12.5% protein content for supply in May from Black Sea ports were up $10 from prior week quoting at $380 free on board (FOB), the IKAR agriculture consultancy said, adding that the price range was wide.
Sovecon, said Russia exported 590,000 tonnes of grains last week, citing data from ports, compared with 630,000 tonnes a week earlier.
As we know, Russia’s customs service has suspended publication of import-export data to avoid “speculation”.
Sovecon estimates that the country’s wheat exports for April will slide 4.5% lower month-over-month to 2,1 MMT.
That would still be nearly triple year-ago results of 800.000 t, however.
Meantime, wheat prices in the domestic market fell amid weakening demand from consumers and exporters as well rising supply from farmers.
Particularly, Domestic 3rd class wheat, European part of Russia, excluded delivery was at 16,275 rbls/t, ($217.84) -200 rbls (Sovecon);
Prices of sunflower seeds were at 41,325 rbls/t, -900 rbls (Sovecon);
Prices of domestic sunflower oil were at 118,350 rbls/t, unchanged (Sovecon);
Price of export sunflower oil was at $1,850/t, +$50(IKAR);
Price of export sunflower oil was at $1,900-2,000/t, unchanged (Sovecon);
Price of soybean was at 52,300 rbls/t, -1,600 rbls (Sovecon);
White sugar prices, Russia’s south, were at $858.7/t +$40.6 (IKAR).
($1 = 74.7120 roubles).
Meantime, spring grains were planted on 1.8 million hectares as of April 19, Sovecon said, that was unchanged from a year earlier.
On Friday, the Russian Ag. Min has amended the export tax for wheat, barley and corn for the week of May 06-12, 2022.
Particularly, the export duty will be $120.1 on wheat, $73.5 on barley and $58.3 on corn.
Indicative prices will be $371.6 for wheat, $290.0 for barley and $268.4 for corn.
That is compared, with prior week (April 27 – May 05) when the tax was $119.1 for wheat, $73.3 for barley and $54.9 for corn, while indicative price were $370.2 for wheat, $289.8 for barley and $263.5 for corn.
From the Middle East, Iraq expects wheat production to reach 2.5-3 million tonnes this season, which will be sufficient for supply to the end of year 2022, the deputy agriculture minister said on Friday.
The ministries of agriculture and water resources will reduce the acreage that will be planted with rice for this season due to water scarcity that Iraq is suffering from, the official added.
From the Middle Kingdom, China will release 500k MT of imported soybeans from state reserves on May 6.
Meantime, China’s sow herd fell 3.3% lower month-over-month to 41.85 million head.
That’s also down 3.1% from a year ago.
The decline is largely attributed to poor hog margins.
From South East Asia, India is experiencing the hottest April in a century following the hottest March in 122 years according to ADMIS.
Reports from India suggest the hot weather is withering the countries wheat crop and has the potential to curb Indian wheat exports which are up 232% in 2021/22.
According to The Hindu, an Indian newspaper, the largest wheat producing state, Punjab, has harvested 20% less wheat this year compared to last.
Wheat yields are also estimated to have fallen 10% according to the newspaper.
However, for the first season in over a decade, Indian farmers are selling their new wheat crop to private traders instead of the state stockpiler, as a global wheat price rally gives India’s suppliers a rare profitable export window.
Before the nearly 50% surge in global wheat prices, India struggled to export the grain due to annual increases in the MSP to placate the politically powerful farm lobby that made Indian wheat more expensive than world prices.
But a rare confluence of high international prices, consecutive record crops, a weaker rupee against the dollar and improved internal logistics have made shipments from India attractive.
“This is a golden opportunity for India to export its surpluses”.
For Indian authorities, brisk demand from private grain handlers at prices above the MSP of 20,150 rupees ($262.88) a tonne means FCI’s wheat purchases are expected to fall drastically for the first time in decades.
Lower state purchases in turn mean big budget savings.
Last year, India spent 856 billion rupees ($11.2 billion) buying a record 43.34 million tonnes of wheat from farmers, filling state granaries to the brim and boosting national debt.
This year’s FCI purchases could fall below 30 million tonnes, trade and government officials said, meaning less government capital will be tied up buying and storing crops.
Indian traders have signed wheat export deals at between $330 and $335 a tonne free on board.
This is nearly $50 a tonne cheaper than rival suppliers as the rally in global prices and large surplus stocks at home have made it easier for Indian suppliers to offer a discount, but still well above local prices.
Following a flurry of export deals signed in February and March, India’s wheat shipments touched a record 7.85 million tonnes in the fiscal year to March – up 275% from the previous year.
Exports could jump to 12 million tonnes in the 2022-23 fiscal year, making it a serious player in global markets.
India’s exports have also been helped by a sharp jump in crop quality.
For the first time, top global wheat importer Egypt has purchased the grain from India, which sources say has helped India establish a reputation as a top tier supplier.
Alongside improved farm practises and greater mechanisation, better seeds have transformed India’s wheat market from mainly low-quality feed varieties to one abundant in superior grades such as Durum, Lokwan and Sharbati used in pizza, pasta and premium bakery products.
Newer varieties have helped farmers get higher yields with better protein content.
Thus, Indian wheat with 12% to 13% protein is pretty common now and that compares favourably with APW’s (Australia Premium White) 11.5% to 12% protein.
The government has forecast this year’s wheat output at a record 111.32 million tonnes, but may revise that estimate if the recent hot spell saps crops still trickling into wholesale grain markets.
($1 = 76.65 rupees).
In the edible oil market, Indonesia’s palm oil export ban has stalled around 290,000 metric tons that was initially bound for India.
“We don’t know when Indonesia will lift the ban and stuck shipments will be delivered,” according to one Indian buyer. India is the world’s No. 1 palm oil importer, with monthly purchases of around 700,000 MT.
Indonesia typically supplies around half of that total.
Indonesia should be able to tackle its cooking oil shortage in the next few weeks and lift an export ban on palm oil and its refined products in May, an industry body said on Thursday.
From Australia, USDA’s Foreign Agricultural Service (FAS) expects, Australia to produce 29.0 MMT of wheat in 2022/23, 20% less than 2021/22.
The area planted is expected to decline 4% and wheat yields are expected to be smaller.
Wheat exports are expected to decline 29%.
Meantime, indicative delivered prices in Australian dollars per tonne were:
Barley Downs: $380 up $10 from Apr 21;
SFW wheat Downs: $415, up $13 from Apr 21;
Sorghum Downs: $340, down $5 from Apr 21;
Barley Melbourne: $420, up $10 from Apr 21;
ASW wheat Melbourne: $420 up $5 from Apr 21.
SFW wheat Melbourne: $410 unchanged from Apr 21.
(AUD/USD=> US$0.7063 vs. US$0.7237 past week).
Prices for feed wheat and barley in the northern market have increased in the past week to what some are calling the top of the curve.
In the south, barley has closed the gap on ASW wheat, and is meeting renewed export demand from the Middle East.
The barley surge is pushing consumer interest more towards SFW wheat, which is priced most attractively at NSW sites a long way from port.
Recent rain has growers across Australia planting winter crops, and trade sources say grower interest in selling cereals has fallen away substantially as a result.
This, coupled with the Australian dollar dropping to US71 cents, down from 74c one week ago, has firmed prices for all quoted wheat and barley markets bar SFW wheat delivered Melbourne, unchanged since last Thursday.
On international trade scene, Turkey’s state grain board TMO has bought about 270,000 tonnes of wheat in an international import tender that closed on Friday.
The deal brought Turkey’s total wheat purchases on Friday to 480,000 tonnes, along with about 210,000 tonnes of wheat bought in a separate tender also on Friday seeking supplies already in warehouses in Turkey.
The lowest price paid in the import tender was $404.80 a tonne c&f for 25,000 tonnes, traders said.
While the lowest price was said to be $409.00 a tonne for the tender ex-warehouse.
All the wheat bought was 12.5% protein content, they said.
Traders reported these provisional purchases in the import tender, with port of unloading, tonnes sold, seller and price in dollars a tonne c&f:
Delivered Iskenderun, 25,000t offered by Dakka at $412.00;
Delivered Iskenderun, 25,000t offered by Grainstar at $413.90;
Delivered Mersin, 50,000t, offered by Crossagro at $412.61;
Delivered Izmir, 25,000 offered by Erser at $410.00;
Delivered Bandırma, 25,000t, offered by Tiryaki at $406.90;
Delivered Tekirdag, 25,000t offered by Grainstar $406.90
Delivered Derince, 25,000t offered by Dakka at $411.90;
Delivered Derince, 25,000t offered by Tiryaki at $411.80;
Delivered Samsun, 25,000t, offered by Bek Tarım at $404.80;
Delivered Trabzon, 10,000t offered by Bek Tarım at $411.90;
Delivered Trabzon 10,000t, offered by Erser at $411.80.
Traders also reported these provisional purchases in the warehouse tender, showing port of delivery, tonnes sold, seller, protein content and price in dollars per tonne ex-warehouse in Turkey:
Samsun 5,000 Uyanikerler 12.5% $409.00;
Samsun 15,000 Bek Tarım 13.5% $418.70;
Samsun 25,000 Tiryaki 12.5% $414.60;
Samsun 5,000 Ulusoy 13.5% $418.70;
Iskenderun 10,000 Erser 13.5% $428.70;
Iskenderun 25,000 Grainstar 12.5% $424.90;
Iskenderun 15,000 Altinates 12.5% $429.90;
Mersin 5,000 Viterra 13.5% $431.10;
Mersin 20,000 Tiryaki 12.5% $427.70;
Izmir 25,000 Grainstar 12.5% $416.80;
Bandırma 5,000 Seta 12.5% $416.00;
Bandırma 5,000 Erser 13.5% $422.20;
Bandırma 10,000 Erser 12.5% $418.20;
Bandırma 5,000 Bek Tarım 13.5% $422.30;
Tekirdag 10,000 Erser 12.5% $416.00;
Tekirdag 5,000 Promaks 12.5% $419.00;
Tekirdag 10,000 Bek Tarım 12.5% $419.50;
Trabzon 5,000 Bek Tarım 13.5% $429.70;
Trabzon 5,000 Bek Tarım 12.5% $428.10.
Jordan had 2 participants in its barley tender this week:
Viterra and Bunge – same agent one envelope.
MIT cancelled its tender to be issued again for May 10, 2022.
Envelope not opened.
Algeria’s state grains agency OAIC is believed to have purchased between 230,000 to 250,000 tonnes of durum wheat in a tender which closed on Tuesday.
Mexico expected to be a main origin.
Traders initially estimated prices at around $570 a tonne c&f for shipment in large panama bulk carriers and about $590 a tonne for shipment in smaller handysized vessels.
Shipment was sought in three periods between May 16-31, June 1-15 and June 16-30.
Watching next week market, the first week of May begins with the Export Inspections report on Monday morning.
Weekly Crop Progress data will be out in the afternoon, with monthly domestic use data released as well via the Grain Crushing, Fats & Oils, and Cotton Systems report.
The Fed will meet on Tuesday and Wednesday.
On Wednesday, EIA will release ethanol production and stocks data, with Census trade data also published.
Thursday morning, FAS will release weekly Export Sales data.
Friday rounds out the week with May cotton futures expiration.
