Good morning Farmer Family and good weekend …
All commodities ag have gone up in price this week on US farm markets!
Corn prices posted a nice gain on the week as jumped by 4.84%.
Soybeans took back all of the previous week’s losses, with September contract up 4.90% this week.
Product values helped lead the way to the uptrend, with meal 6.22% higher and soy oil up 6.97% for the week.
The wheat complex too, posted a round of solid gains this week, with all three markets seeing the active front months all above $8.
Particularly, Kansas City HRW wheat, led the charge to the upside, as was 4.83% higher.
Chicago SRW was up 3.90% for the week.
Minneapolis spring wheat was up 3.72% than the previous week.
A weaker dollar, with dollar index settling at the lowest reading since late June on Friday, spurred US grain prices to move higher.
A weaker dollar, indeed, usually means higher prices for commodities priced in dollars.
Additionally, this week was also marked by USDA monthly reports out on Friday, which helped to increse some anxiety.
In this context, during the end week session, the corn report which was a little bit bullish, saw corn prices to rally, posting into the close a 1.67% daily gains.
Soybean prices slided sharply plunging 40+ cents intraday, after the U.S. Agriculture Department forecasted U.S. soy farmers would glean a record harvest even larger than previously forecast.
Yet Friday’s WASDE forecast is based on U.S. crop conditions as of Aug. 1, and there has been a lot of heat and dryness out there in the last 12 days.
Thus, traders questioned the surprisingly large record-crop forecast and focused instead on August weather, spurring soybean prices to close by 0.97% higher on the day.
Soymeal was up 1.8%, while soybean oil closed 0.33% higher.
The wheat complex, in contrast, was weaker on Friday.
Chicago SRW wheat led the way to the downtrend for the winter wheats, closing down 0.59%.
Kansas City HRW contract, however, has managed to close on unchange.
Minneapolis spring wheat, meantime, was down 0.24% on the day.
Going inside the numbers, during the week, corn prices, closed up $0.295 at $6.40/bu.
Soybean prices finished the week $0.717 stronger at 15.35/bu.
Soymeal jumped $27.2/smt, closing at $464.70 smt.
Soy oil, rose $4.53, to close at $69.53.
CBOT soft red winter (SRW) prices lifted $0.303 to close at $8.06/bu.
KCBT hard red winter (HRW) prices was $0.410 higher, ending at $8.89/bu.
MGE hard red spring (HRS) prices gained $0.330 to close at $9.20/bu.
Meantime, corn basis bids were steady to weak across the central U.S., after sliding 2 to 15 cents lower at seven Midwestern locations, on Friday.
Soybean basis bids fell 15 to 30 cents lower at two interior river terminals and tumbled 45 cents lower at an Indiana processor while holding steady elsewhere across the central U.S. at the end of the week.
As for wheat, basis was mixed in both the Gulf and Pacific Northwest (PNW) this week.
In the Gulf, HRS and HRW basis was unchanged from last week while SRW rose slightly.
Out of the PNW, HRS and HRW was marginal while soft white was down.
Basis softened as harvest picks up across all wheat-growing areas.
Sluggish export demand this week has also failed to rally basis, keeping it mostly flat week-over-week.
In this context, as of Aug 11, 2022, FOB prices saw US wheat No 2 Hard Red Winter (HRW) valued at $387/mt (up $10/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was at $344/mt (up $14/mt from last week).
Northern Durum offers from the Great Lakes for September 2022 delivery was quoted at $14.15/bu, unchanged week on week ($520.00/MT).
As for corn, US corn 3YC (Gulf) was at $305/mt (up $11/mt from last week).
As for soybean, US soybean 2Y (Gulf) quoted at $627/mt (up $20/mt from last week).
The weekly Ag Energy Roundup report from USDA had the week’s average corn oil price as 68c/lb this week, compared to 62 cents last week and 64.35 – 66c/lb during the same week last year.
Ethanol cash price averaged from 2.27 to 2.48 $/gal, down compared last week, when were between 2.38 and 2.60 $/gal.
The B100 cash price for the week was seen as $6.60/gal in Iowa/Minnesota and $6.65 in IL/IN/OH.
Unchanged from last week’s quotes.
Meantime, the CFTC Commitment of Traders report showed managed money firms adding 12,141 corn contracts to their net long position in the week ending August 9.
That put them net long 142,062 contracts in the run up to Friday’s USDA reports.
As for soybean, CFTC’s update had spec funds 101,509 contracts net long as of August 9.
That was up 2,038 contracts from the previous week and their most bullish position since July 5.
As for wheat, the weekly CoT data showed the managed money spec funds were getting more bearish in CBOT wheat.
For the week, they added 5,378 contracts to their net short, bringing it to 20,348 contracts.
Managed money firms were 8,023 contracts net long in KC wheat after reducing the position by 1,969 contracts in the week that ended August 9.
They were also net sellers of MPLS wheat, with the net short position up 363 contracts to 1,015 contracts.
In energy markets, oil prices plunged around 2% on Friday.
Brent crude futures, indeed, fell $1.45, or 1.5%, to settle at $98.15 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $2.25, or 2.4%, to settle at $92.09 a barrel.
Both contracts had gained more than 2% on Thursday, as top U.S. Gulf of Mexico oil producer Shell said it halted production at three deepwater platforms in the region.
Consequentially, oil prices were still on track for a weekly gain.
Brent, indeed, gained 3.4% this week while WTI rose 3.5%.
Meantime, crews informed that they were expected to replace the damaged oil pipeline piece by the end of the day on Friday, thus there were good expectations that supply disruptions in the U.S. Gulf of Mexico would be short-term.
In addition recession fears clouded the demand outlook.
The market also absorbed contrasting demand views from the OPEC and the IEA.
On Thursday OPEC cut its forecast for growth in world oil demand in 2022 by 260,000 barrels per day (bpd).
It now expects demand to rise by 3.1 million bpd this year.
The IEA, meanwhile, raised its demand growth forecast to 2.1 million bpd, citing gas-to-oil switching in power generation
The IEA also raised its outlook for Russian oil supply by 500,000 bpd for the second half of 2022 but said OPEC would struggle to boost production.
Meantime, U.S. oil rigs rose three to 601, this week.
In freight market, the Baltic Exchange’s main sea freight index fell to a fresh six-month low on Friday and posted its fourth consecutive weekly decline as rates slid across vessel segments.
The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, indeed, fell 79 points, or 5.1%, to 1,477 points. It was down 5.3% on the week.
Particularly, the capesize index lost 224 points, or 14.6%, to a six-month low of 1,314 points.
The index fell 6.9% for the week, its fourth straight drop.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down $1,859 at $10,898.
The panamax index was down for the 14th straight session, shedding 20 points, or 1%, to 1,907 points, its lowest in more than three weeks.
It fell 3.1% for the week in its third consecutive decline.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $178 to $17,161.
The supramax index rose for the first time since July 22, adding two points to 1,593 points.
However, it shed 6.3% for the week, its third weekly drop.
In equity markets, Wall Street capped a choppy week of trading with a broad stock market rally on Friday.
The S&P 500 notched its fourth consecutive weekly gain, closing 1.7% higher, for a 3.3% weekly gain.
The Dow Jones Industrial Average rose 1.3% on Friday, and 2.92% for the week.
The Nasdaq and Russell 2000 index of smaller companies both closed 2.1% higher.
The Nasdaq gained 3.8% for the week.
Particularly, the S&P 500 rose 72.88 points to 4,280.15, while the Dow gained 424.38 points to 33,761.05.
The Nasdaq added 267.27 points to 13,047.19.
The Russell 2000 also made strong gains closing 41.36 points higher to 2,016.62 in a sign that investors are confident about the economy.
Technology stocks drove much the rally.
The cooler-than-expected inflation readings have bolstered hopes among investors that inflation may be close to a peak and that the Federal Reserve could less aggressively hike interest rates.
U.S. July import prices fell -1.4% m/m and eased to +8.8% y/y from June’s +10.7%.
U.S. July import prices ex-petroleum fell -0.7% m/m, adding to June’s revised -0.5% m/m drop.
The yield on the 10-year Treasury fell to 2.84% from 2.88% late Thursday.
It remains below the two-year yield.
The University of Michigan reported that its preliminary-Aug U.S. consumer sentiment index rose by +3.6 points to a 3-month high of 55.1, which was stronger than market expectations of +1.0 point to 52.5.
The U.S. House of Representatives returned from its recess on Friday to pass the Inflation Reduction Act, which passed the Senate this past Sunday.
The bill contains $430 billion of spending on climate and healthcare, and also cuts the U.S. budget deficit.
However, remain worries about inflation, high gasoline prices, rising interest rates, and a weakening labor market if the economy continues to slide.
In currency trading, the dollar index on Friday rose by +0.53% to 105.550 and recovered mildly from Wednesday’s 5-week low.
Still, the dollar closed -0.9% lower on the week.
Particularly, the EUR/USD on Friday fell by -0.54% to 1.0261.
The euro failed to get much traction from the bullish news that Eurozone June industrial production rose by +0.7% m/m and +2.4% y/y, which was stronger than expectations of +0.2% m/m and +1.2% y/y, and added to May’s increase of +0.8% m/m.
Meantime, the USD/JPY on Friday rose +0.34% to 133.46.
In Canada, as of August 08, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $458.83 per tonne, down C$1.77/t from prior week;
– for the N2 class CWRS 13.0% – $453.05/t, down C$0.46 wow;
– for the N3 CWRS – $456.94/t, down C$1.3 from prior week.
As of August 08, 2022, for the N1 CWAD 13% (durum wheat first class) average street price were at C$434.68, jumping by C$26.09 week on week.
Export basis West Coast & Central SK, however, moved sharply down from C$ 260.55 to 233.95 a tonne.
Thus, delivered FOB price Great Lakes was posted at C$668.63.
That was just C$0.52 lower from prior week.
Meantime, per latest data from European Commission, as of August 10, 2022, Durum wheat – CA St Lawrence (CWAD) was offerd at C$638.7/t, down C$28.88 from a week earlier.
As of August 12, 2022, for the N1 CWAD 13% (durum wheat first class), average street price in REGIONAL ZONES were at C$438.96 per tonne, down C$0.98 from prior week.
(1USD=Cnd$1.2774, down from 1.2838 a week earlier).
From South America, as of August 11, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $410, unchanged from prior week.
Argentina corn feed was up $6/t for the week, closing at $280.
Brazilian corn feed (Paranagua) was valued at $293, up $9 from prior week.
Argentina feed barley, was up $5 for the week to $345.
Argentina soybean was up $4 at $611.
Brazilian soybean gained $3 finishing the week at $624.
In Europe, September wheat price, on Euronext closed the week at €338.75 per tonne, down €3.75/t from past week.
November corn price, was €9.25/t higher for the week, closing at 336.5 euros per ton.
Rapeseed Nov contract closed at €656.25/t, up €3/t for the week.
Nov-22 UK wheat feed contract, closed at £271.35/t, up £3.35/t week on week.
Meantime, as of August 11, 2022, FOB prices in US dollar for French wheat with 11.5% protein and Sep/Oct delivery, were at $355/mt, up $1 from prior week.
German wheat, Deposilo Hamburg, was valued at $365.29/t; past week was not quoted.
Baltic wheat, delivery first Vilnius, quoted $320.14, down $12.81 from prior week.
French durum wheat – delivered La Pallice Spot – July 2022 basis, was at $451.48/mt, up $3.48 from prior week.
Spanish durum wheat Sevilla (Depo Silo), was valued this week at $497.66 per tonne, down $1.26 wow.
Italian durum wheat Bologna (Delivered to first customer), was valued this week at $518.18 per tonne, up $9.08/t week on week.
Corn, delivered Bordeaux Spot – July 2022 basis, was at $361.19 per tonne, up $23.15/t from past week.
Corn FOB Rhin Spot – July 2022 basis, was up $10.78 to $341.69/t.
Feed barley delivered Rouen was at 302.7$/t, down $2.76 per tonne.
Malting barley FOB Creil Spot – July 2022 basis was at $377.6 per tonne, down $9.32/t from prior week.
Rapessed FOB Moselle – 2022 harvest was at 677.23$/ton, up $17.43 compared to prior week.
Standard sunseed FOB Bordeaux – 2022 harvest was up 21.24$ from prior week at $774.7 per tonne
(Eur/USD = 1.0261 vs last week 1.0182).
From the Black Sea basin, Russian wheat export prices fell past week.
Particularly, Russian prices for wheat with 12.5% protein content and for supply from Black Sea ports, fell by $3 to $355 a tonne free on board (FOB) at the end of last week.
In the domestic market too, prices for food wheat fell in the southern part of the country.
While prices for low-quality wheat, fell sharply as supply rises sharply.
Meantime, on Friday Russia has set out its grain export taxes for Aug 17 – 23.
According to the agriculture ministry the export duty will decrease for all products wheat, barley and corn.
Particularly, for wheat will move to 5,018.1 roubles/tonne, from 5,219.6 roubles/tonne of a week earlier.
For barley, will be 3,034.0 roubles/tonne, down from 3,504.9 roubles/tonne the prior week.
For corn, the tax will move down to 3,705.8 roubles/tonne, from 3,802.8 roubles/tonne the previus period.
As for indicative price, for wheat will be 367.3 $/tonne, for barley 301.7 $/tonne, and for corn 317.6 $/tonne.
That is compared with 369.4 $/tonne for wheat, 310.6 $/tonne for barley, and 317.6 $/tonne for corn of a week earlier.
In Ukraine, the bid prices of rapeseed have been growing since late July, according to APK-Inform.
Particularly, prices of rapeseed increased by 100-1200 UAH/t over the reporting period and totaled 14500-16000 USH/t CPT in Ukrainian ports of the Danube.
The bid prices of barley for delivery by alternative routes also increased slightly on the Ukrainian export market last week.
Particularly, prices of barley increased to 140-165 USD/t CPT-port in the Danube ports, 190-205 EUR/t in port of Giurgiuleşti, 285-295 EUR/t CIF Constanta.
The bid prices of barley for delivery in August-September remained at 210-230 EUR/t DAP Romania, they reached 250-290 EUR/t for delivery to Romanian cities.
In contrast, bid prices of Ukrainian wheat for delivery to some European countries decreased last week.
Particularly, the bid prices of 12.5% and feed wheat remained mainly stable at 290-300 and 270-280 EUR/t DAP Bulgaria, and they decreased to 270-285 and 255-265 EUR/t DAP Romania.
The bid prices of 2-grade and 3-grade wheat totaled 290-310 and 270-290 EUR/t in Hungarian cities, they decreased to 325-340 and 315-330 EUR/t in Lithuanian cities.
The purchasing prices of corn also decreased slightly after some stabilization in the Ukrainian ports of the Danube.
Particularly, the bid prices of corn decreased by5-10 USD/t to 155-180 USD/t CPT-port in Reni and Izmail.
The offer prices on FOB market totaled 220-230 USD/t for delivery in August-September.
The offer prices of corn totaled 310-320 EUR/t FOB Constanta.
The bid prices of Ukrainian corn for delivery by land routes, in contrast, increased for some destinations last week on the export market, despite high domestic stocks and coming harvesting of new-crop corn.
Particularly, the bid prices of corn increased to 215-235 EUR/t DAP Hungary and Romania.
They remained stable at 195-210 EUR/t DAP Poland amid heavy logistical problems.
Taking into account cost of delivery to cities of Poland and Slovakia, the prices reached 240-255 EUR/t, to cities of Romania – 250-270 EUR/t, to cities of Hungary and Bulgaria – 255-280 EUR/t.
In Australia, indicative delivered prices in Australian dollars per tonne this week were:
Barley Downs: $390, unchanged from Aug 4;
SFW wheat Downs: $410, unchanged from Aug 4;
Sorghum Downs: $360, up $10 from Aug 4;
Barley Melbourne: $388, down $2 from Aug 4;
ASW wheat Melbourne: $428, up $10 from Aug 4.
SFW wheat Melbourne: $420, up $12 from Aug 4.
Meantime, consumers are generally seen as well covered until the new crop, and buy is expected to be minimal in the closing weeks of winter.
Thus, growers started offering new crops.
Particularly, this week prompts were:
Barley Downs: $375;
SFW wheat Downs: $402;
Sorghum Downs: $330;
Barley Melbourne: $390;
ASW wheat Melbourne: $410;
SFW wheat Melbourne: nq.
(AUD/USD=> US$0.7121 vs. US$0.6913 past week).
2022/2023 U.S. ENDING STOCKS
Corn 2022/23 U.S. ending stocks are projected at 1.388 billion bushels vs. the trade estimate of 1.383 billion bushels.
USDA’s estimate in July was much higher at 1.470 billion bushels.
For soybeans, the U.S. ending stocks were 245 million bushels vs. the trade’s expectation of 227 million bushels.
USDA’s July estimate was 230 million bushels.
The U.S. wheat ending stocks are now at 610 million bushels vs. the trade’s expectation of 651 million.
That is a big step down from July’s estimate of 639 million bushels.
2021/2022 U.S. ENDING STOCKS
Corn, 2021/2022 ending stocks are projected at 1.530 billion bushels vs. the trade estimate of 1.518 billion bushels.
The July USDA estimate was at 1.510 billion bushels.
For soybeans, the U.S. ending stocks were at 225 million bushels vs. a trade estimate of 228 million bushels.
In July, the USDA’s estimate was 215 million bushels.
The U.S. wheat ending stocks were at 660 million bushels.
That matched the trade’s expectation and reflecting no change from the July estimate.
2022/2023 WORLD ENDING STOCKS
The world’s corn ending stocks were pegged at 306.7 mmt.
That was below the trade’s expectation of 309.8 mmt and below USDA’s July estimate of 312.9 mmt.
For soybeans, the world ending stocks were estimated at 101.4 mmt. vs. the trade’s expectation of 99.2 mmt. and 99.6 mmt last month.
For wheat, world ending stocks were at 267.3 mmt, slightly below the trade’s expectation of 267.8 mmt and the July estimate of 267.5 mmt.
2021/2022 WORLD ENDING STOCKS
For 2021/2022 USDA pegged the world’s corn ending stocks at 311.8 mmt. vs. the trade’s expectation of 313.3 mmt. and the USDA’s July estimate of 312.3 mmt.
For soybeans, they are estimated at 89.7 mmt. vs. the trade’s expectation of 88.9 mmt. and the USDA’s July estimate of 88.7 mmt.
For wheat, the USDA pegged world ending stocks at 276.4 mmt. vs. the trade’s expectation of 280.1 mmt. and the USDA’s previous estimate of 280.1 mmt.
2021/2022 WORLD CROP PRODUCTION
The USDA pegged the 2021 Brazilian soybean production at 126.0 mmt, reflecting no change from USDA’s estimate the last two months of 126.0 mmt.
For corn, Brazil’s output is seen at 116.0 mmt., reflecting no change from the last two months of 116.0 mmt.
For Argentina’s soybean output, the USDA pegged its crop at 44.0 mmt, reflecting no change from USDA’s July estimate of 44.0 mmt.
Argentina’s 2021/2022 corn crop is pegged at 53.0 mmt, reflecting no change from the USDA’s two previous estimates of 53.0 mmt.
WASDE – August 12
Production is revised higher, up 62 percent over last year.
Particularly, USDA estimates Canada wheat production for marketing year (MY) 2022/23 at 35.0 million metric tons (mmt), up 1.0 mmt or 3 percent from last month, 62 percent above last year and 15 percent above the 5-year average.
Harvested area is estimated at 10.0 million hectares, unchanged
from last month, but up 8 percent from last year, and 5 percent above the 5-year average.
Yield is estimated at 3.50 metric tons per hectare (t/ha), up 3 percent from last month and 49 percent above last year.
FAS visits to fields in Saskatchewan and Alberta in late July revealed well-established spring and durum wheat crops in good to excellent condition.
Discussions with farmers and industry analysts indicated general optimism regarding the crop, despite early season challenges that had delayed both planting and progress in some areas.
Spring wheat was observed at early ripening stages, as improved rainfall during June and July in western Saskatchewan and southern Alberta, and warm temperatures had rapidly advanced crops.
The bulk of Canada’s wheat crop is spring wheat, accounting for approximately 75 percent of the total wheat crop.
It is grown primarily in the Prairie Provinces.
In addition to field observations and interviews, satellite-derived Normalized Difference Vegetation Index (NDVI) analysis of spring wheat also indicates rapid advancement and above-average crop conditions similar to those in MY 2020/21, when overall wheat yield rose above 3.50 t/ha.
Durum and winter wheat account for 16 and 9 percent of the remainder of Canada’s total wheat crop, respectively; provincial reporting suggests above-average yields for those crops are also expected.
Watching next week’s market, next week’s schedule starts off with the weekly Export Inspections report on Monday in the afternoon, along with the monthly NOPA.
Crop Progress data will be updated that overnight showing condition/progress changes for this week.
Skip ahead to Wednesday and EIA will release ethanol numbers for stocks and production.
Thursday is the weekly Export Sales release from FAS.
Friday marks the monthly release of the Cattle on Feed report from NASS.
As a reminder, next week, our “Daily Market Reports” and “Weekly Reports” will not be issued, due to the Mid-August holidays.
We will publish only the “Daily Market Wire” during the period between August, 16-19.
Also, it should to note despite the 15 August public holiday in most of Europe, Euronext will be open on Monday.
The publication of ours reports will resume regularly starting from August 22 and until September 3, 2022.
As of September 5th, indeed, the publication of our market reports will be delayed or incomplete.
Anyone wishing to read our complete reports in real time can continue to do so by making a voluntary donation to:
Sicilian Wheat Bank – La Banca del Grano S.p.A.
on the following IBAN: IT51N0200816800000105835939
That’s all, thank you in advance and Happy Assumption feast to everyone ..!
Author: Sandro F. Puglisi
Our childhood, our teenage years have gone forever.
Safe travel you Beautiful Mind!
Farewell dear Maestro Piero Angela!