Good afternoon Farmer Family and good weekend …
US farm markets were mixed but mostly higher on Friday.
Soybeans rounded out the week with the rally, pushing August another 1.72% higher on the day and posting their biggest weekly rise in 22 years, as the contract was 14.12% higher (or $2.025/bu) for the week.
Nov contract gained 11.61% ($1.52/bu) during the week.
Meal prices were mixed on Friday, although the Aug deadline still closed 1.14% higher for the session.
For the week, meal was up 14.8%, or $63.80/ton gains in a 7 day period.
Soy oil helped to push things more higher, with another 4.19% gain during the end week session, posting so for the week a 13.7% gains.
Corn, on its part, made its biggest weekly gain in nearly five months, in spite prices moved higher by only 0.2% on Friday.
On the week, indeed, Sep was up 9.22% for the week or 52 cents per bushel, and Dec corn was up a total of 55 ¾ cents, a 9.88% move.
Despite recent rains and below-normal temperatures across parts of the U.S. Midwest, forecasts are pointing to hot and dry weather in early August, raising concerns for soybean crops during their crucial pod development, as well as for late-planted corn still pollinating.
Most of the Midwest and Plains will see at least some measurable moisture between today and Tuesday, with some areas of the Mid-South set to gather another 1” to 2” during this time, per the latest 72-hour cumulative precipitation map from NOAA.
However, the agency’s new 8-to-14-day outlook predicts a return to seasonally dry weather for the Central Plains and western Corn Belt between August 5 and August 11, with hotter-than-normal conditions prevalent across the entire central U.S.
Soybean meal, on its part, set life-of-contract highs in nearly every contract month, as crushers weighed tight old-crop supplies against ample demand.
Also, this week we saw the first flash sale in nine days, after that U.S. exporters reported to the USDA the sale of 132,000 tonnes of soybeans for delivery to unknown destinations during the 2022/2023 marketing year.
Also the wheat complex finished the week higher after two weeks of decline.
Kansas City HRW was up 6.6% for the week.
Chicago SRW was up 6.4%.
Spring wheat gained 4% for the week.
However, wheat prices slided lower on Friday, with some contracts down more then 2%, as US spring wheat saw excellent yield projections from the annual Wheat Quality Tour, and safety corridor from the Black Sea to ship Ukrainian grains was just ready.
Particularly, the WQT tour, which surveyed HRS fields this week, estimated yields at 49.1 bushels per acre (bpa) (3.3 MT/ha), the highest since 2015 and well over the 5-year average of 39.4 bpa (2.6 MT/ha).
Ukraine, on the other hand, is ready to start shipping grain from two Black Sea ports under a U.N.-brokered agreement, but no date has been set for the first shipment, Ukrainian Infrastructure Minister Oleksandr Kubrakov said.
Thus, spring wheat was the leader to the downside, as closed 2.37% lower.
Kansas City HRW was down 1.71%.
SRW contracts were down 1.13% on the day.
Going inside the numbers, during the week, corn prices, closed up $0.520 at $6.16/bu.
Soybean prices finished the week $2.035 higher at 16.37 /bu.
Soymeal soared $63.8/smt, closing at $495.30 smt.
Soy oil, gained $8.280, to close at $68.60.
CBOT soft red winter (SRW) prices rose $0.488 to close at $8.08/bu.
KCBT hard red winter (HRW) prices added $0.542, ending at $8.75/bu.
MGE hard red spring (HRS) prices lifted $0.350 to close at $9.06/bu.
Meantime, corn basis bids were largely steady across the central U.S. on Friday with one major exception after tumbling 20 cents lower at an Illinois processor.
Also soybean basis bids were steady to weak after falling 10 to 15 cents lower at two interior river terminals and dropping 10 cents at an Indiana processor.
As for wheat, basis this week was mixed in both the Gulf and Pacific Northwest (PNW).
In the Gulf, HRS basis was flat while HRW basis moved down 5 cents and SRW basis up 5 cents.
In the PNW, HRW basis was unchanged while HRS basis was down slightly.
Soft white prices were slightly up.
Recently strong export sales have left many buyers covered, reducing nearby demand on logistics and keeping basis relatively quiet week-over-week.
In this context, as of July 28, 2022, FOB prices saw US wheat No 2 Hard Red Winter (HRW) valued at $389/mt (up $8/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was at $341/mt (up $4/mt from last week).
Northern Durum offers from the Great Lakes for September 2022 delivery are quoted at $14.15/bu up $0.27 week on week ($520.00/MT +$10).
As for corn, US corn 3YC (Gulf) was at $309/mt (up $13/mt from last week).
As for soybean, US soybean 2Y (Gulf) quoted at $646/mt (up $60/mt from last week).
The weekly Ag Energy Roundup report from USDA had the week’s average corn oil price as 63 cents/lb.
That compares to 58.5 c/lb last week.
The B100 cash price for the week was seen as $6.42/gal in IA and $6.65 in the ECB.
Last week’s quotes were $6.41 and $6.95/gal respectively.
USDA’s weekly Crush report, showed processing value of soybeans at $19.91/bu on $16.52 cash beans.
Past week showed processing value of soybeans was at $17.58/bu on $15.43 cash beans.
Meantime, CFTC’s Commitment of Traders data from Friday afternoon showed specs in corn futures and options trading trimming 4,515 contracts from their net long position as of 7/26.
That took the total position to net long 120,788 contracts by Tuesday.
Commercials cut 17,861 contracts from their net short position to -358,075, the smallest since autumn 2020.
As for soybean, CFTC’s update had spec funds 87,676 contracts net long as of July 26.
That was down another 156 contracts from the previous week and masked the big rally for the rest of the week.
As for wheat, weekly CoT data showed the managed money spec funds were getting more bearish in CBOT wheat.
For the week, they added 3,575 contracts to their net short, bringing it to 10,391 contracts.
Managed money firms were 11,041 contracts net long in KC wheat after reducing the position 827 contracts in the week that ended July 26.
In energy markets, oil prices settled up more than $2 a barrel on Friday as attention turned to next week’s OPEC+ meeting and expectations that the producer group will imminently boost supply are dimming.
Thus, Brent crude futures contract for September, which expire on Friday, jumped more than $3 a barrel during the session and then pared gains to settle at $110.01 a barrel, up $2.87, or 2.7%.
The more active October contract was up $2.14, or 2.1%, at $103.97.
U.S. West Texas Intermediate (WTI) crude futures settled at $98.62 a barrel, rising $2.20, or 2.3%, after jumping more than $5 a barrel.
Both contracts logged their second monthly losses, with Brent down about 4% for July and WTI nearly 7% lower.
Oil pared some gains after the release of data from oil services firm Baker Hughes, which showed that U.S. drillers added crude rigs for a record 23 months in a row, indicating more supply ahead.
In July, the oil rig count rose 11, while the gas count was unchanged after rising for 10 straight months.
In freight markets, the Baltic Exchange’s main sea freight index logged its worst month since January on Friday as rates across its component vessel segments saw double-digit monthly declines.
The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, indeed shed 50 points, or 2.6%, to 1,895 points, its lowest in over five months.
The main index dropped for the third straight month, down 15.4% for July.
Particularly, the capesize index lost 109 points, or nearly 5%, to a fresh three-week low of 2,081 points.
It had its worst month since January, while sliding 22.8% for the week.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down by $907 at $17,255.
The panamax index was down 14 points, or 0.7%, at a one-week low of 2,051 points.
It was down 17.5% on the month, its fourth consecutive monthly decline.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased by $118 to $18,463.
The supramax index lost 32 points to 1,971 points, falling 14.5% on the month.
In equity markets, US stocks rallied for the third consecutive session on Friday, with the S&P 500 and Dow Jones Industrials posting 7-week highs and the Nasdaq 100 posting a 2-1/2 month high.
The Dow Jones Industrial Average rose 315.5 points, or 0.97%, to 32,845.13; the S&P 500 gained 57.86 points, or 1.42%, to 4,130.29 and the Nasdaq Composite added 228.10 points, or 1.88%, to 12,390.69.
All three major indexes gained for the month and for the week.
The S&P 500 gained about 9.1% for July in its biggest monthly percentage gain since November 2020.
The index is still down 13.3% for the year.
The Nasdaq jumped about 12.3% in July in its biggest monthly gain since April 2020.
The Dow Jones Industrial Average notched a 6.7% gain for the month.
Smaller company stocks also gained ground.
The Russell 2000 rose 12.20 points, or 0.7%, to 1,885.23.
It ended July with a 10.4% gain.
Stocks rallied Friday after better-than-expected quarterly earnings results from the big tech companies of Amazon.com and Apple boosted market sentiment.
Amazon.com rose +10.4% after reporting stronger than expected Q2 net sales and forecasting better-than-expected Q3 net sales.
Apple rose +3.3% after reporting better-than-expected Q3 revenue.
Most S&P 500 sectors ended higher, with energy rising 4.5%, the most of any S&P sector.
Chevron Corp rose 8.9% and Exxon Mobil shares jumped 4.6% after the companies reported record quarterly revenues.
Stocks have also rallied this week on investor speculation that the Federal Reserve may not need to be as aggressive with interest rate hikes as some had feared.
Positive comments Friday from Atlanta Fed President Bostic, indeed, gave stocks a boost when he said the U.S. economy was “a ways” from entering a recession.
Q2 earnings season has been supportive thus far for equities, with 75% of the S&P 500 companies reporting earnings beating expectations.
That has bolstered speculation that corporate America can withstand rising inflation, aggressive Fed tightening, and slowing growth.
On the negative side for stocks was the more than -8% plunge in Intel after it reported weaker-than-expected Q2 adjusted EPS and cut guidance on its full-year earnings.
Also, Friday’s U.S. economic data raised inflation concerns.
The U.S. June core PCE deflator rose +0.6% m/m and +4.8% y/y, stronger than expectations of +0.5% m/m and +4.7% y/y.
The U.S. Q2 employment cost index eased to +1.3% from +1.4% in Q1, still stronger than expectations of +1.2%.
U.S. June personal spending rose +1.1% m/m, slightly stronger than expectations of +1.0% m/m.
U.S. personal income rose +0.6% m/m, stronger than expectations of +0.5% m/m.
The U.S. July MNI Chicago PMI fell -3.9 to a nearly 2-year low of 52.1, weaker than expectations of 55.0.
The University of Michigan U.S. July consumer sentiment was revised upward by 0.4 to 51.5, stronger than expectations of no change at 51.1.
Friday was a mixed day in the bond market.
The two-year Treasury yield, which tends to move with expectations for the Fed, rose to 2.89% from 2.87% late Thursday.
The 10-year yield, which influences mortgage rates, fell to 2.62% from 2.67%.
In currency trading, the dollar index on Friday fell by -0.5% to 105.707 and dropped to a 3-1/2 week low, as strength in stocks Friday curbed liquidity demand for the dollar.
The dollar Friday initially moved higher as T-note yields rose temporarily on inflation concerns after the U.S. Q2 employment cost index and the June core PCE deflator rose more than expected.
However, T-note yields on Friday gave up early gains and turned lower, which weighed on the dollar.
As we said, the 10-year T-note yield, indeed, fell to a 3-1/2 month low of 2.616%.
Thus, EUR/USD on Friday rose by +0.17% to 1.0226, recovering from early losses and posted moderate gains.
The euro also found support Friday on comments from ECB Vice President Guindos, who said the ECB was “watching” the exchange rate of the euro.
EUR/USD also rose, after Eurozone Q2 GDP rose +0.7% q/q and +4.0% y/y, stronger than expectations of +0.2% q/q and +3.4% y/y.
EUR/USD on Friday initially moved lower on concern record inflation pressures in the Eurozone will force the ECB to aggressively tighten monetary policy that pushes the economy into recession after Eurozone July CPI rose a record +8.9% y/y, stronger than expectations of +8.7% y/y.
Eurozone July core CPI also rose a record +4.0% y/y, stronger than expectations of +3.9% y/y.
USD/JPY on Friday fell by -0.68% to 133.21 and posted a 6-week low, as a decline in the US 10-year T-note yield supported gains in the yen.
Also, strength in Japanese industrial activity was bullish for the yen after Friday’s data showed Japan June industrial production rose a record +8.9% m/m, stronger than expectations of +4.2% m/m..
Meantime, the Japan July consumer confidence index fell -1.9 to a 1-1/2 year low of 30.2, weaker than expectations of 31.5.
Japanese Jun retail sales unexpectedly fell -1.4% m/m, weaker than expectations of +0.2% m/m and the biggest decline in 14 months.
From Canada, spring wheat ratings with the rains last week should have improved.
The crops look pretty good and at least average yields should be assumed.
The July AAFC balance sheets for wheat project much-improved production, and better exports, but also again increasing ending stocks.
Canadian grain production is set for a significant rebound this season on the back of a sharp improvement in weather conditions across most of the Prairies, according to Agriculture and Agri-Food Canada’s (AAFC) latest Outlook for Principal Field Crops.
According to the AAFC report, the total area seeded to grain crops has remained relatively static at 31.45 million hectares compared to 31.53Mha last year.
But a massive jump in the average yield will see total grain and oilseed output jump by more than 34pc year-on-year to 87.3 million tonnes (Mt).
Canadian farmers have substantially increased the area sown to wheat at the expense of coarse grains, oilseeds and pulses in the 2022/23 season.
The total wheat area has increased by 9pc to 10.35Mha compared to last year, 1.5pc higher than the original seeding intentions released back in April.
The area planted to spring wheat makes up almost three-quarters of the total wheat area at 7.37Mha.
Next in line is durum wheat with 2.43Mha, and winter wheat has a minor slice of the pie at 477,000 hectares.
The most common wheat class in Canada is Canadian Western Red Spring wheat which is planted into approximately 78pc of the total wheat area (excluding durum).
Assuming 98pc of the planted area is harvested, and we see a return to near average yield of 3.33t/ha, AAFC is pegging the Canadian wheat crop at 33.72Mt, an increase of 55.7pc on the 2021/22 crop.
If that estimate proves correct at the conclusion of harvest, it would be the third biggest Canadian wheat crop on record behind 2013 with 37.59Mt and 2020 with 35.18Mt.
Canada is one of the world’s major wheat exporters.
AAFC anticipates shipments will return to normal levels in the 2022/23 marketing year.
The current estimate of 22.4Mt, including 4.4Mt of durum, is more than 51pc higher season-on-season.
This seems conservative given port capacity, the strong global demand and much higher carry-out stocks.
However, Canadian export prices are high at the moment due to production uncertainty, the extremely tight old crop balance sheet and escalating domestic transport costs.
Barley production is also set to increase year-on-year, but AAFC calls the planted area down more than 15pc to 2.85Mha.
This is the lowest area planted to barley in the last four years.
Using normal abandonment of around 10pc and a slightly above average yield of 3.49t/ha, production is forecast to increase to 9.06Mt in 2022/23.
This is 30pc higher than the 6.95Mt produced last harvest and is 2pc higher than the five-year average.
With the increase in supply, AAFC forecasts Canadian barley exports to increase from 2.59Mt in the 2021/22 marketing year to 3.05Mt in 2022/23.
Canada is the world’s biggest canola producer, and production is expected to jump substantially after a horror harvest in 2021.
While the seeded area is estimated to be 4.7pc lower at 8.67Mha, yields are forecast to jump from 1.4t/ha last year to 2.14t/ha in this year’s harvest.
Assuming abandonment of less than 1pc and a five-year average yield of 2.14t/ha, AAFC is forecasting production to rebound from 12.6Mt last year to 18.4Mt this year.
That would be the seventh highest canola crop on record, with the six higher years all occurring since 2013.
With the higher output comes a recovery in the export program, and shipments are projected to jump almost 75pc to 9Mt.
In this context, as of July 25, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $464.86 per tonne, down C$24.08/t from prior week;
– for the N2 class CWRS 13.0% – $457.76/t, down C$21.67 wow;
– for the N3 CWRS – $455.87/t, down C$19.29 from prior week.
As of July 25, 2022, for the N1 CWAD 13% (durum wheat first class) deferred average street prices for delivery in Sep ’22 were at C$399.77 down C$41.16 week on week.
Export basis West Coast & Central SK skyroketed moved up from C$ 218.59 to 256.60 a tonne.
However, delivered FOB price Great Lakes was posted at C$656.38, down C$3.14 from prior week.
Per latest data from European Commission, as of July 27, 2022, Durum wheat – CA St Lawrence (CWAD) was offerd at C$735/t, down from $742.67/t a week earlier.
As of July 29, 2022, for the N1 CWAD 13% (durum wheat first class), average street prices in REGIONAL ZONES were at C$443.66 per tonne, down C$15.18 from prior week.
(1USD=Cnd$1.2794 down from 1.2916 a week earlier).
Meantime, Canadian weekly exports for common wheat were poor again for week 50 at 166,4k mt, for a year-to-date total of 10.7 MMT, compared to 19 MMT last year.
As for durum, durum exports for week 50 were at only 40,1k mt, for a year-to-date total of 2.5 MMT, compared to 5.9 MMT last year-to-date.
From South America, Argentina’s government is looking at creating a separate peso-U.S. dollar exchange rate for the country’s agricultural sector in a bid to incentivize farmer sales.
Local media reported that sales are lagging behind last year’s levels.
A total of 20.4 million mt of the newly harvested soybean crop have been sold as of July 13, which is around 48% of the production for the season, and it is nearly five percentage points behind the farmer sales done at same time last year.
Meantime, the Buenos Aires Grain Exchange reports that the moisture condition of Argentine wheat has improved since last week thanks to rains across an area that accounts for 40pc of plantings.
An estimated 35pc of plants have a poor/dry moisture condition versus 44pc last week.
The rain, however, could delay the final stage of corn harvesting for the 2021/2022 season, which has advanced to about 74% of the area destined for commercial corn production.
Corn output for the cycle is seen at 49 million tonnes.
According to the USDA attaché, Argentina wheat exports for marketing year (MY) 2022-2023 are forecast at 12.35 million tons, 1.15 million tons lower than USDA’s official number as a result of lower production.
The wheat and barley crops are suffering very dry weather.
Barley exports in MY 2022-2023 are forecast at 3.7 million tons, the same as in MY 2021-2022.
Corn exports in MY 2022-2023 are forecast at 38.8 million tons, 2.2 million tons lower than USDA as Post forecasts a lower production at 53 million tons.
Sorghum exports for MY 2022-2023 are forecast at 1.65 million tons, 850,000 tons lower than USDA as China’s demand has recently cooled down.
AgRural reported Brazilian 2nd corn crop harvest as 62% complete.
That compares to 53% last week and the 39% last season.
They figure the output at 87.3 MMT for the 2nd crop
Conab’s last figure was 88.4 MMT.
IMEA reported Mato Grosso’s safrinha harvest reached 94% on Friday, up 9 points for the week and running 12 ahead of LY and 21 ahead of the 5-year average.
Meantime, Brazil shipped approximately 950 K MT of corn the third week of July, 60% more than the 597 K shipped in the same period in 2021.
Brazil’s soybean exports the 3rd week of July plunged nearly 1 MMT from a week earlier to 1.2 MMT from a week earlier and the total was 300 K less than in the year ago week.
Soybean meal shipments jumped 262 K/85% to 572 and topped the 429 K exported in the same week in 2021.
Safras and Mercado estimated the 22/23 Brazilian soy export at 91.5 MMT, compared to old crop’s 77.2 MMT projection.
That does come via a 18% production boost yr/yr with their 22/23 output figured at 154.53 MMT.
The Brazilian government confirmed that China has opened its market to soybean meal produced in the South American country, adding that shipments would begin after the removal of some bureaucratic hurdles.
In this context, as of July 28, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $410, down $10 from prior week.
Argentina corn feed was up $15/t for the week, closing at $278.
Brazilian corn feed (Paranagua) was valued at $283, up $23 from prior week.
Argentina feed barley, was unchanged for the week to $340.
Argentina soybean was up $64 at $628.
Brazilian soybean gained $60 finishing the week at $630.
In Europe, MARS, the European Union’s (E.U.) crop monitoring service, on Monday, cut yield forecasts for E.U. grains.
MARS adjusted its forecast for average E.U. soft wheat to 5.74 MT/ha, down from 5.76 MT/ha and 4.9% below last year.
Forecasts for corn crops were down on last month at 7.25 t/ha, now down nearly 8% on June estimates.
The situation is similar in sunflower where the estimated yield is 2.18 t/ha against 2.37 t/ha last month.
MARS reduced yield forecasts due to hot and dry weather across the continent but especially in large parts of Spain, southern France, central and northern Italy, central Germany, northern Romania, eastern Hungary, and western and southern Ukraine.
Also, this week Agritel reduced soft wheat production in France at 33.4 MMT, down 5.6% compared to last year.
Per latest data from farm office FranceAgriMer showed on Friday,
France’s corn crop condition deteriorated sharply for a second consecutive week, as an estimated 68% of the grain maize crop was in good or excellent condition in the week to July 25, down from 75% the previous week, 83% in the week to July 11 and 84% in the week to July 4.
This week’s rating compares to a year-earlier score of 90%.
More dry and hot weather is forecast in the coming weeks in key European maize growing regions, including France, and is expected to cause further damage to crops already stressed by a dry spring and sweltering temperatures earlier this month.
The condition of spring barley, which was 92% harvested by July 25, further deteriorated to 48% from 50% a week earlier.
In soft wheat, French farmers had harvested 95% of this year’s crop by Monday, compared with 84% a week earlier.
An estimated 63% of soft wheat was in good or excellent condition, unchanged from the previous week.
The winter barley and durum harvests were both over, well ahead of last year.
Meantime, Hungary has harvested 3.9 million tonnes of autumn wheat and 1.4 million tonnes of barley.
The harvest season ended earlier than usual due to this year’s heat and drought.
The total amount of wheat harvested in Hungary was about 25% less than the average yield in the past five years.
This year’s barley yields also lagged behind the 1.7 million tonnes harvested in 2021.
Hungary harvested 450,000 tonnes of rapeseed, also well below about 722,000 tonnes last year.
The damage to the grains crop comes at a time when the country is struggling with food inflation running at 22% in annul terms in June.
In this context, September’s wheat prices, on Euronext closed the week at €343 per tonne, up €17.25/t from past week.
August corn price, was €29.25/t higher for the week, closing at 352.25 euros per ton.
Rapeseed for August deadline jumped to €675.75/t, gaining €42.25/t for the week, while Nov contract closed at €689.75/t, up €52.25/t for the week.
Nov-22 UK wheat feed contract, closed at £270/t, up £14.5/t week on week.
Meantime, as of July 28, 2022, FOB prices in US dollar for French wheat with 11.5% protein and Sep delivery, were at $357/mt, down $13 from prior week.
German wheat Deposilo Hamburg, was at $347.68/t, down $13.86/t from prior week.
Baltic wheat, delivery first Vilnius, quoted $394.72. Past week was not quoted.
French durum wheat – basis La Pallice, was at $455.06/mt, up $5.69 from prior week.
Spanish durum wheat Sevilla (Depo Silo), was valued this week at $511.3 per tonne, down $9.56 wow.
Italian durum wheat Bologna (Delivered to first customer), was valued this week at $506.19 per tonne, down $4.46/t week on week.
Corn, delivered Bordeaux port was at $352.8 per tonne, up $22.92/t from past week.
Corn FOB Rhin Spot – July 2021 basis was up $11.67 to $340.53/t.
Feed barley FOB Rouen was at 306.78$/t, down $5.74 per tonne.
Malting barley FOB Creil Spot – July 2022 basis was at $376.32 per tonne, down $7.68/t from prior week.
Rapessed FOB Moselle – 2022 harvest was at 693.32$/ton, up $55.01 compared to prior week.
Standard sunseed FOB Bordeaux – 2022 harvest was up 52.17$ from prior week at $864.1 per tonne
(Eur/USD = 1.0226 vs last week 1.0213).
From Ukraine, the grain community this week has been “sceptical about the prospects for shipments”, Ukragroconsult analysts said.
Still, this week “the first caravan of ships, blocked in Ukrainian ports for five months, has been formed”.
Ukraine is ready to start shipping grain from two Black Sea ports under a U.N.-brokered agreement but no date has been set for the first shipment, Ukrainian Infrastructure Minister Oleksandr Kubrakov said on Friday.
In the southern port of Odesa 17 vessels trapped by five-month, were already loaded with grain, and another was now being loaded.
It is being reported, indeed, that a 27,000 metric tonnes vessel was reportedly able to complete loading at the port of Chornomorsk, likely with maize, and could set sail shortly.
Ukraine’s president visited a Ukrainian port Friday and said the country is ready to start exporting grain.
Shipments were expected to begin this week, but none of the vessels carrying 580,000 MT of grain have sailed yet.
Indeed, its seems vessels are having a hard time recruiting crews to
sail the vessels.
Lloyd’s of London insurer Ascot and broker Marsh launched some marine cargo and war insurance for grain and food products moving from Ukrainian Black Sea ports.
However, those insurance premiums are also adding to the overall cost of shipping Ukrainian wheat from the Black Sea.
Ukrainian farmers have threshed 11.8 million tonnes of grain of the 2022 grain harvest so far, Ukrainian grain traders union UGA said on Thursday.
The union said in a statement that the volume included 8 million tonnes of wheat with an average yield of 3.52 tonnes per hectare and 3.5 million tonnes of barley with a yield of 3.26 tonnes per hectare.
UGA said farmers also harvested 1.7 million tonnes of rapeseed with the yield of 2.52 tonnes per hectare.
As for Russia, SovEcon raised their wheat shipment outlook for Russia by 300k MT to a record 42.9 MMT for 22/23.
Their production estimate was up another 1.7 MMT to 90.9 MMT, yesterday has been reported for error 80.9 MMT.
Meantime, according to APK-Inform, the prices of wheat continued decreasing in Ukrainian ports of the Danube last week.
In the ports of Reni an Izmail, the bid prices of 2-grade and 3-grade wheat decreased by 3-15 USD/t to 170-192 and 160-190 USD/t СPT-port, the bid prices of feed wheat declined by 30-35 USD/t to 125-150 USD/t CPT-port.
The bid prices of corn were mainly stable with slight prevailing of downward trend.
Indeed, the bid prices of corn decreased slightly to 160-190 USD/t (sometimes to 135 USD/t) in ports of Reni and Izmail.
The bid prices in hryvnia terms were quite stable at 5000-6000 UAH/t CPT-port.
From Russia, SovEcon raised their wheat shipment outlook for Russia by 300k MT to a record 42.9 MMT for 22/23.
Their production estimate was up another 1.7 MMT to 90.9 MMT.
Meantime, the country exported 540,000 tonnes of grain last week, compared with 500,000 tonnes the previous week, according to the port data.
In this context, Russian wheat export prices fell last week.
Particularly, according to the IKAR, Russian prices for wheat with 12.5% protein content and for supply from Black Sea ports fell by $5 to $355 a tonne free on board (FOB) at the end of last week.
According to Sovecon, wheat prices for imminent supply were at $350-355 per tonne vs $355-360 a week before.
Price for domestic 3rd class wheat, European part of Russia, excluded delivery was at 13,025 rbls/t ($225.54) -250 rbls (Sovecon);
Price for sunflower seeds was at 25,600 rbls/t -650 rbls (Sovecon); Price for domestic sunflower oil was at 73,175 rbls/t -825 rbls (Sovecon);
Price for domestic soybeans was at 34,400 rbls/t -525 rbls (Sovecon); Export price for sunflower oil was at $1,380/t -$20 (Sovecon);
Export price for sunflower oil was at $1,250/t -$60 (IKAR);
Price for white sugar, Russia’s south was at $1,080/t -$9.9 (IKAR).
($1 = 57.7500 roubles).
On Friday Russia has set out its grain export taxes for Aug 3 – 9.
According to the agriculture ministry the export duty will increase for all products wheat, barley and corn.
Particularly, for wheat will decrease to 4,626.8 roubles/tonne, from 4,951.7 roubles/tonne of a week earlier.
For barley, will move down to 2,945 roubles/tonne, from 3,002.6 roubles/tonne the prior week.
For corn, the tax will up to 3,311.4 roubles/tonne, from 2,923.4 roubles/tonne the previus period.
As for indicative price, for wheat will be 371.9 $/tonne, for barley 311.2 $/tonne, and for corn 320.2 $/tonne.
That is compared with 388.2 $/tonne for wheat, 321.0 $/tonne for barley, and 319.0 $/tonne for corn of a week earlier.
Consumer prices in Russia declined 0.08% in the week to July 22 after sliding 0.17% a week earlier, data showed on Wednesday.
That, vindicated the central bank’s decision to cut interest rates more sharply than expected last week.
The rouble’s strengthening and a drop in consumer demand have helped Russia rein in inflation, which soared to 20-year highs in annual terms.
The economy ministry said annual consumer inflation slowed to 15.30% as of July 22, down from 15.39% a week earlier.
The ministry said food products have continued to make a key contribution into slower inflation.
So far this year, consumer prices have risen 11.32% compared with a 4.51% increase in the same period of 2021, data from the Federal Statistics Service Rosstat showed.
The central bank, which targets annual inflation at 4%, slashed its key interest rate by 1.5 percentage points to 8% last week in a bigger-than-expected cut and said it would study the need for more cuts as inflation slows if economic contraction continues for longer than previously thought.
From Australia, local markets have been quiet this week with feed wheat, barley and sorghum prices remaining unchanged through northern markets, while southern wheat values have been off $15-20/t in thin trade.
The Blue Mountains rail line reopened this week allowing a backlog of containers carrying agricultural and other commodities to move from central New South Wales to Port Botany.
The line has been open for 12 hours a day since Monday, and will be open around the clock from Saturday.
Australia’s inflation rate hit 6.1pc in the June quarter, the fastest annual pace since 2001 as consumers paid more for everything from fuel to food.
Transport costs alone increased 13.1pc as the price of fuel rose to record levels for the fourth quarter in a row.
The cost of new houses also rose 9pc from a year earlier.
“Annual trimmed mean inflation was the highest since the series commenced in 2003 and annual goods inflation was the highest since 1987, as the impacts of supply disruptions, rising shipping costs and other global and domestic inflationary factors flowed through the economy,” said Michelle Marquardt, head of prices statistics at the ABS.
In this context, indicative delivered prices in Australian dollars per tonne this week were:
Barley Downs: $390 unchanged from July 21;
SFW wheat Downs: $410, down $5 from July 21;
Sorghum Downs: $345, up $5 from July 21;
Barley Melbourne: $390, unchanged from July 21;
ASW wheat Melbourne: $420 down $20 from July 21.
SFW wheat Melbourne: $410 down $15 from July 21.
(AUD/USD=> US$0.6987 vs. US$0.6924 past week).
Other main news
A protest by Brazilian federal revenue service auditors is delaying clearance of documents needed to receive payments for exports, according to a local trade group representing global grain traders.
The issue has been affecting exporters since the beginning of the year, at the height of Brazil’s soybean exporting season in January.
The auditors have been protesting since December 2021, demanding more staff be hired as well as a pay raise and bonuses linked to performance, according to Unafisco, the auditors’ union.
The Economy Ministry declined to comment on the protest, which has slowed paperwork without stopping export activity completely.
Companies are resorting to costly alternatives to have the paperwork in order to receive payments and “the scenario is shaping up to be much worse” for the corn export season.
Egypt is considering sending inspectors to Ukrainian ports to inspect cargos headed to Egypt.
A Turkish grains trading company is denying allegations that flour and barley in a ship docked in Lebanon was stolen from Ukraine.
A company official said Lebanese customs were supplied with documentation showing the grain was sourced from Russia but declined to share these documents.
Kazakhstan estimates its wheat crop at 13-13.5 MMT this season, up 15% compared to last year if realized according to Agriculture Minister Yerbol Karashukeyev.
The minister added that domestic consumption is forecast at 6.0 MMT, leaving the remaining wheat for export.
China plans to auction off another 500.000t of its state imported soybean reserves on August 5.
The country has offered a series of similarly sized auctions since this spring to increase local supplies and ease the pressure of high prices.
South Korea purchased 40.000t of milling wheat, sourced from Canada, in an international tender that closed yesterday.
The grain is for shipment between mid-October and mid-November.
Watching next week’s market, the first week of August starts with the weekly Export Inspections report on Monday afternoon.
Later in the day we will have the weekly Crop Progress report, along with the monthly Grain Crushing, Fats & Oils, and Cotton Systems report.
The weekly EIA ethanol numbers will be out on Wednesday.
Thursday will have the weekly Export Sales report from USDA, as well as the monthly export data from Census.
Friday marks the last trading day for August Live Cattle options.
That’s all, thank you.
To all of you, we wish you a good weekend and … Good Harvest 2022!
Author: Sandro F. Puglisi
