This week was marked by the release of the USDA’s December WASDE report which, while making changes from nonexistent to insignificant, was still enough to inspire further clearance in wheat and some new soybean purchases.
Some bargain buying, however, got involved in the grain game after the USDA report sent Chicago wheat futures to a one-month low, limiting the week’s losses with a weekend rebound.
Lack of any revisions to US corn forecasts left corn markets stalling without any new information to support further price movement.
Highlights of the WASDE report include:
As for corn, this month’s 2021/22 U.S. corn supply and use outlook is unchanged from last month.
The projected season-average farm corn price remains at $5.45 per bushel.
Global corn outlook is for greater production, increased trade, and larger ending stocks relative to last month.
As for soybean, US supply and use projections for 2021/22 are unchanged from last month.
Although soybean crush is unchanged, soybean oil production is raised on a higher extraction rate.
The U.S. season-average soybean and soybean oil price forecasts for 2021/22 are unchanged at $12.10 per bushel and 65.0 cents per pound, respectively.
The soybean meal price forecast is increased $5.00 to $330.00 per short ton.
The 2021/22 global oilseed supply and demand forecasts include lower production and lower ending stocks compared to last month.
As for wheat the outlook for 2021/22 U.S. wheat this month is for slightly lower supplies, unchanged domestic use, reduced exports, and higher ending stocks.
Their average cash wheat price estimate for the year was increased 15 cents to $7.05.
The global wheat outlook for 2021/22 is for higher supplies, greater consumption, increased trade, and higher ending stocks.
In this context, US farm markets ended the week mixed, with corn prices up around 1,3% for the week, offsetting most of the previous week’s losses.
Soybeans eked out a 0,04% increase for the week.
Soybean meal was again the backbone of the rally, up 2.29% for the week.
Soybean oil was down a sharp 6.17%.
Wheat prices were down 2.3% in the CBT and 2,28% in KC markets this week.
Minneapolis spring wheat was up around 0,1%.
Particularly, CBOT corn March futures were up 6 cents to $5.90/bu.
CBOT soybean January futures gained 0,5 cents at $12.68/bu.
CBOT March soft red winter (SRW) futures lost 18.5 cents to close at $7.85/bu.
KCBT March hard red winter (HRW) futures were down 18.8 cents to end at $8.06/bu.
MGE March hard red spring (HRS) futures gained 1 cents to close at $10.22/bu.
Meantime, as of December 09, 2021, US corn 3YC (Gulf) was at $269/mt (up $5/mt from last week).
US soybean 2Y (Gulf) quoted at $504/mt (up $8/mt from last week)
US wheat No 2 Hard Red Winter (HRW) was valued at $369/mt (down $13/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was at $339/mt (down $9/mt from last week).
Northern Durum offers from the Great Lakes for April/May 2022 delivery are quoted at $18.10/bu ($665.00/MT).
Wheat basis was mixed this week in both the Gulf and Pacific Northwest (PNW).
Gulf basis, except for HRS, was down despite persistent issues with rail freight challenging both domestic and export logistic.
In the PNW, nearby basis increased slightly except for soft white, which saw a significant reduction following export sales this week.
Meantime, USDA reported the weekly average cash price for corn oil from 53 to 57 cents/lb by region.
Those averages are compared to 56-57.28 c/lb last week.
Spot ethanol prices were also weaker, back down to $2.77-$3.23/gal by region compared with $3.07-$3.40/gal last week.
Gasoline futures are still below that at $2.14/gal.
The DDGS FOB prices were mostly higher through the week, with NOLA bids from $238, up from $220-237 last week.
PNW FOB prices are $295/ton.
USDA’s cash price for B100 for the week was $4.91/gal, which is down 8 cents from last week’s cash market.
On macro markets, oil prices rose slightly on Friday and posted their biggest weekly gain since late August.
In fact, Brent futures settled up 73 cents, or 1%, at $75.15 a barrel on Friday, after falling 1.9% on Thursday.
WTI rose 73 cents, or 1%, to $71.67 after sliding 2% in a volatile session the previous day.
Both Brent and U.S. West Texas Intermediate (WTI) crude benchmarks each posted gains of about 8% this week, their first weekly gain in seven, even after a brief bout of profit-taking.
Meantime, the Baltic Exchange’s dry bulk sea freight index fell on Friday, tracking larger capesize and panamax vessel segments.
The overall index (Baltic Dry Index – BDI), which factors in rates for capesize, panamax and supramax vessels, shed 71 points, or 2.1% to 3,272.
It had scaled its highest in over a month on Wednesday.
However, the main index gained 3.2% this week, registering its fourth weekly gain in five.
The capesize index was down 162 points, or 3.3%, to 4,827.
It rose 5.1% for the week.
Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, decreased by $1,344 to $40,035.
The panamax index decreased 77 points, or 2.5%, to its lowest in over a week at 3,068.
It posted a 1.9% weekly decline.
Average daily earnings for panamaxes, which ferry 60,000-70,000 tonne coal or grain cargoes, fell $696 to $27,610.
On equities markets, US stock indexes on Friday finished moderately higher, with the S&P 500 posting a 2-1/2 week high and the Dow Jones Industrials climbing to a 3-week high.
Inflation concerns eased and pushed stocks higher after Friday’s data showed U.S. Nov consumer price data met expectations.
Also, strength in technology stocks supported the overall market after Broadcom and Oracle reported better-than-expected quarterly earnings.
Finally, stocks found support after the University of Michigan reported stronger than expected U.S consumer sentiment.
In this context, the S&P 500 rose 1%, enough to recoup its losses from a day earlier.
The benchmark index closed higher four of the last five days, finishing 3.6% higher for the week.
The Dow Jones Industrial Average rose 0.6% on Friday and 3,86% for the week.
The Nasdaq composite gained 0.7% on Friday and 3,39% for the week.
Both recovered from declines early in the week.
Smaller-company stocks lagged the broader market, leaving the Russell 2000 index 0.4% lower on Friday, but had weekly gains by 2,39%.
Particularly, the S&P 500 rose 163,65 points week on week to 4,712.02, a new high.
It set its previous record high on Nov. 18.
The Dow gained 1.337,56 points for the week closing at 35,970.99.
The tech-heavy Nasdaq rose 512.97 points for the week to 15,630.60.
The Russell 2000 rose 51.65 points for the week to close at 2,211.81.
In Canada, as of December 6, 2021 Canadian wheat prices for FOB delivery West Coast were in Cdn$/mt:
- for the N1 class CWRS with 13.5% protein at $540.6, down $5.56 per tonne;
- for the N2 class CWRS 13.0% – $527.46, down $9.32/t;
- for the N3 CWRS – $470.21, down $14.49;
- for the N1 CWAD FOB Great Lakes – $868.15, up $6.21 per tonne, as durum street prices in Rosetown, continued to quote at $716.88, unchanged from past week, while export basis rose again at CAD $151.28, from $145.07/mt of previus week.
- in St. Lawrence durum wheat prices fell by Cnd 4.09/mt to ~C$871.09/mt week on week.
(1USD=Cnd$1.2713).
From South America, as of December 09, 2021 – Argentina Wheat Grade 2 export price, (Up River) was at $320, up $2 from last week.
Argentina corn feed was up $2 for the week, closing at $255.
Brazilian corn feed (Paranagua) was at $271, up $5 from past week.
Argentina barley feed, was unchanged week on week, posting at $302.
Argentina soybean was up $4 at $548.
Brazilian soybean rose $6 finishing the week at $512.
In Europe, Matif March wheat futures fell by 6.50 euros from last week, closing at €283.5/t.
Matif corn January futures were up 2 euros to close the week at €247/t.
Matif rapeseed February futures, jumped 35.50 euros, ending the week at €718.25/t.
Jan-21 UK feed wheat futures fell £3.4 from past week, closing at £224.35/t.
Meantime, as of December 09, FOB prices in US dollar for French wheat with 11.5% protein and Dec. delivery, were at $ 330/mt, down $9/mt from last week.
French durum wheat, as of December 8, FOB Port la Nouvelle quoted at $544.
French durum wheat, feed use as of December 9 – basis La Pallice, quoted $519.43/mt, up $39.23 from prior week.
Spanish durum wheat Sevilla (DepSilo), continued to not quote this week.
Italian durum wheat Bologna (Delivered to first customer), valued at $596.22/mt, down $6.01/mt from last week.
German wheat (Depsilo) with 12.5 pro closed at $336.50, down $12.64/mt from last week.
Baltic wheat (Delivery First) was valued at $267.62/mt, down $32.92/mt.
Corn delivered Bordeaux Spot – July 2021 basis was at $280.04 per tonne, down $0.17 from last week.
FOB Rhin Spot – July 2021 basis was at $282.3 per tonne, up $0.96 week on week.
Feed barley delivered Rouen – July 2021 basis was at 281.17$/t, down $15.98.
Malting barley FOB Creil Spot – July 2021 basis was at $406.51 per tonne, down 0.25$ from past week.
Rapessed FOB Moselle Spot – Flat – 2021 harvest was at 802.86$/ton, up $31.14 compared to prior week.
Standard sunseed delivered St Nazaire Spot – Flat – 2021 harvest was up $5.22 from last week at $705.75 per tonne.
(EUR/USD=> US$1.1292).
From the Black Sea basin, Russian wheat fell last week after rising for six weeks.
Indeed, according to IKAR, Russian wheat with 12.5% protein loading from Black Sea ports for supply in December was $337 a tonne free on board (FOB) at the end of last week, down $3 from the previous week.
According to SovEcon, wheat export price was down $3 to $340 a tonne.
Barley fell by $1 to $304 a tonne.
Meantime, domestic 3rd class wheat, European part of Russia, excludes delivery, was valued at 15,375 roubles +75 rbls ($208) (Sovecon).
Price of sunflower seed were at 37,175 rbls/t +1,525 rbls from last week (Sovecon).
Sunflower oil domestic price was down -1,000 rbls at 87,000 rbls/t (Sovecon).
Export price for sunflower oil was at $1,360/t -$50 (Sovecon).
Export price for sunflower oil was down -$35 at $1,365/t (IKAR).
Soybeans were down 1.000 rbls at 48,000 rbls/t (Sovecon).
White sugar, Russia’s south, was at $645.4/t +$2 (IKAR).
($1 = 73.7411 roubles)
Meantime, Russian Agriculture Ministry has amended export duties for wheat, barley and corn for the period Dec. 15-21, 2021.
As for wheat the export duty continue to increase from 84.9 USD/t the prior week, to 91 USD/t for the referred period.
The indicative price moved up from 321.3 USD/t to 330.1 USD/t.
As for corn, the export duty lifted from 54.30 USD/t at 54.40 USD/t.
The indicative price also increased moderatly from 262.7 USD/t to 262.7.
At the same time, tariff for barley will increase to 78.7 USD/t from 75.1 USD/t prior week.
The indicative price moved up from 292.3 USD/t to 297.5 USD/t.
From Australia, Southern grain values have softened in the past week as good-quality grain from the fast-moving Victorian harvest hits the market.
In the north, the market has steadied as harvest undergoes a patchy restart after recent rain, and truckloads are delivered to cover near-term requirements as the market juggles flood-related road closures.
Falls in NSW have been the lightest and patchiest seen for weeks, and while some growers continue to be impacted by storms and showers, many have gotten back into harvest and/or carting grain in the past week.
In this context, indicative delivered prices in Australian dollars per tonne last week were:
Barley Downs: (Nearby) $305 steady – $305 up $5 Jan;
SFW wheat Downs: (Nearby) $328 down $2 – $328 up $3 Jan;
Sorghum Downs: (Nearby) $350 up $20 – $330 up $25 Mar;
Barley Melbourne: (Nearby) $320 down $15 – $315 down $10 Jan;
ASW wheat Melbourne: (Nearby) $412 up $2- $415 steady Jan.
SFW wheat Melbourne: (Nearby) N.Q. – $352 Jan.
(AUD/USD=> US$0.7149).
On the international trade scenario, Saudi Arabia’s, SAGO bought 689,000 tonnes of hard wheat 12.5% in its tender at an average price of $ $365.14 cost and freight (C&F) a tonne.
The arrival period is July 2022.
Bangladesh received lowest price offer assessed at $404.11 a tonne CIF LO from Bagadiya Brothers in its tender to import 50,000 tonnes wheat.
Aston offered $432.00, Agrocorp $430.38 and GTCS $425.00 all per tonne CIF liner out.
Jordan’s state grains buyer purchased 60,000 tonnes of hard milling wheat to be sourced from optional origins in a tender which closed on Thursday.
It was bought at an estimated $341.00 a tonne c&f for shipment in the first half of July 2022.
It was believed to have been bought from trading house The Andersons which previously had not been reported as participating in the tender
Traders said these offers were also submitted in the tender: CHS offered $359.90, Cargill $389.85 and Agro-Chirnogi $351.00, all per tonne c&f.
Cerealcom Dolj also took part but its price was not disclosed.
A new wheat tender is expected to be issued closing on Dec. 16 seeking June, July and August shipment.
Also, Jordan’s state grain buyer has purchased about 60,000 tonnes of animal feed barley to be sourced from optional origins in an international tender which closed on Wednesday.
The barley was believed to have been bought at an estimated $303.70 a tonne c&f for shipment in the first half of July 2022.
Seller was believed to be trading house Agro-Chirnogi.
Six other companies participated in the tender: CHS offered $323.38, Cargill $308.75, Viterra $318.00, Ameropa $335.00 and ETG $323.38 all dollars a tonne c&f.
Cerealcom Dolj also took part but its offer price was not revealed.
A new barley tender is expected to be issued closing on Dec. 15 for 2022 shipment in June, July and August.
Watching next week market, we get one more week of “normal” before the holidays kick in.
We start with USDA Export Inspections on Monday morning. December grain and hog futures expire on Tuesday.
The Fed (FOMC) meets Tuesday and Wednesday, with ‘tightening’ language expected.
Wednesday we will see the EIA report on weekly ethanol production and stocks.
The NOPA crush report is also expected.
Thursday morning we will see the weekly Export Sales report from USDA.
Author: Sandro F. Puglisi
