Good morning Farmer Family …
US farm markets found a some tailwinds on Friday.
Corn priceses, indeed, bounced back, gaining 0.73% on the session.
Soybeans found double-digit gains as closed up 1.9%.
Meal prices were up by 0.82%.
Bean oil prices rallied 1.16% higher.
The wheat complex also rose on Friday.
Kansas City HRW closed the strongest with 1.97% gains.
Minneapolis HRS wheat prices closed with 1.53% gains for the day.
Chicago SRW closed 1.28% higher.
Prices, were underpinned on Friday by strong commodities and equities markets, as well as hopes that China’s easing of COVID-19 restrictions could boost demand.
China on Friday shortened quarantine by two days for close contacts of infected people and for inbound travellers, and removed a penalty for airlines for bringing in too many cases.
That cheered markets though experts cautioned that reopening probably remained a long way off.
That, in turn, has boost crude oil prices, lending support to soybeans, as well as the corn market for the session.
A weaker dollar, which dipped for a second trading day, after a report this week showed monthly U.S. inflation eased, has bolstered agricultural commodities.
Wheat had an additional support, thanks bargain buying, a day after the CBOT December contract dipped to a two-month low, and continued uncertainty about grain exports from Ukraine.
However, for the week, all markets posted weekly losses.
Corn prices, indeed, fell 3.38%, on the week.
Soybeans slipped 0.84%.
Soy meal fell 3.09%, while soybean oil lost just 0.26%.
Wheat saw a some weakness as well this week.
Indeed, Chicago, the biggest bear of the three markets, down 4.01%.
Kansas City HRW contracts were 1.02% lower.
Minneapolis spring wheat slipped 0.92%.
Going inside numbers, for the week corn prices closed $0.230 weaker at $6.58/bu.
Soybean prices finished the week $0.123 lower at 14.50/bu.
Soymeal tumbled $13/smt, closing at $407.40 smt.
Soy oil shedded by $0.2, to close at $76.97.
CBOT soft red winter (SRW) prices fell $0.340 to close at $8.14/bu.
KCBT hard red winter (HRW) prices lost $0.098, ending at $9.44/bu.
MGE hard red spring (HRS) prices were $0.088 weaker to close at $9.46/bu.
Crop Progress report on Monday tallied the US corn harvest at 87% complete as of last Sunday, 11% faster than the normal pace.
Soybean harvest approaching the finish line with 94% of the crop out by last Sunday.
That is 8% faster than normal.
Meantime, US winter wheat crop was 92% planted, with emergence at 73%, now 1% behind average.
Condition ratings data showed the crop at 30% gd/ex, up 2% from the prior week.
Concerns about Mexican demand for U.S. corn after government statements against biotech crops, dragged down the corn market early in the week.
On Wedsneday, EIA data showed 1.051m bpd of ethanol output during the week that ended 11/4.
That was 11k barrels per day more than the week prior.
That’s the highest weekly total since late June.
Ethanol stocks tightened by 40k barrels to 22.192 million.
The Crop Production report on Wednesday showed for corn a 0.4 bpa increase to yield at 172.3 bpa.
That was within the range of estimates.
That left production at 13.930 bbu, compared to 13.895 in October’s estimates.
The WASDE then increased feed and residual demand by 25 mbu.
Carryout was then figured to be 1.118 bbu.
On the global stage, production was only reduced by 350k MT as the U.S. and smaller countries’ increases offset a trim to EU and South Africa.
Carryout was reduced by 430k MT to 300.76 MMT.
As for soybean, USDA revised the average soybean yield 0.4 bpa higher to 50.2 bpa.
That compares to the average 51.7 bpa last year.
Production is now figured at 4.346 bbu.
On the demand side, USDA raised crush by 10 mbu.
With exports unchanged, soybean ending stocks are raised 20 million bushels to 220 million.
Globally, the WAOB trimmed production by 460k MT to 390.53 MMT mostly via a 1.5 MMT reduction in Argentina.
Brazil was left unchanged in the report at 152.
Global oilseed ending stocks are projected at 121.9 million tons, up 1.4 million.
Soybean stocks account for most of the change with an increase to China ’s stocks based on a revision to 2021/22 imports.
As for wheat, USDA made minimal revisions.
The only domestic changes were for a 7 mbu higher food use seen now to a record 977 million, and a 2 mbu seed use trim.
All wheat exports were unchanged at 775 million bushels, with offsetting changes for White wheat and Durum.
Projected 2022/23 ending stocks are lowered 5 million bushels to 571 million, the lowest level since 2007/08.
The global wheat outlook for 2022/23 is for increased supplies, consumption, trade, and ending stocks.
Supplies are projected up 1.3 million tons to 1,059.0 million based on increases in beginning stocks and production.
World production is raised 1.0 million tons to 782.7 million.
Production in Australia was raised 1.5 million tons to 34.5 million.
Argentina production was lowered.
Feed and residual use was raised 0.9 million tons.
However, FSI consumption was lowered 1.5 million tons.
The global forecast for trade was increased 0.3 million tons to a record 208.7 million.
Projected global ending stocks were increased 0.3 million tons to 267.8 million.
As for prices, USDA did not adjust the average cash price for corn from $6.80 per bushel.
Ditto for the cash bean at $14.00 per bushel and cash soy oil prices at 69 cents per pound, but raised meal by $10/ton to $400 flat.
The projected 2022/23 seasonaverage farm price for wheat remained unchanged at $9.20 per bushel.
Ag commodities, thus, had been weighed down on Wedsneday by this WASDE report, which saw U.S. corn and soybean inventories bigger than previously thought, and expectations of higher wheat world supplies.
Then, on Thursday, we had a poor set of export sales data from weekly USDA report.
Weekly FAS data, indeed, had 265k MT of corn bookings for the week that ended 11/3.
That was down from the prior week, below the range of estimates and down 75% from the same week last year.
Corn export shipments were also relatively disappointing, with 259k MT.
Accumulated corn commitments were 14.73 MMT (580 mbu) as of 11/3.
That is 27% of USDA’s forecasted total for the season.
As for soybean, FAS Export Sales data showed 795k MT of soybeans were booked during the week that ended 11/3.
That was within the range of estimates, although toward the lower end of trade estimates.
Accumulated soybean commitments reached 33.1 MMT (1.216 bbu) as of 11/3.
That trails last year’s pace by just 0.4% – representing 60% of the forecast; also matching last year’s pace.
Soybean export shipments were extremely healthy, moving to 2.75 MMT.
In the products, USDA had 170k MT of soymeal bookings and 2.7k MT of bean oil sales for the week.
As for wheat, the report had 322,501 MT of wheat sold during the week that ended 11/3.
That was down slightly from the prior week’s tally, though within the range of estimates.
Wheat export shipments were also tepid at 151k MT, for a MYTD total of 8.967 MMT.
Total wheat commitments sit at 12.5 MMT (459 mbu) as of 11/3 – a historically slow pace, but on track for 59.2% of the USDA forecast.
Export shipments, meantime, are at 42.5% of the forecast through the first 23 weeks.
In this context, corn basis bids were mostly steady to firm across the central U.S. after trending 2 to 11 cents higher at four Midwestern ethanol plants and moving as much as 15 cents higher at an Illinois river terminal on Friday.
An Iowa river terminal had bucked the overall trend after dropping 5 cents.
Soybean basis bids were mostly steady across the central U.S., but did track 5 cents lower at an Iowa river terminal and 9 cents higher at an Ohio elevator.
As for wheat, this week basis was flat for all wheat classes in the Gulf while in the PNW, basis was flat for HRS and down for HRW.
Soft white prices were also down.
Wheat traders cited lower secondary rail rates as one support for flat to lower basis.
The break this week in U.S. wheat futures has slowed farmer selling but coupled with the lower U.S. dollar and softer basis, U.S. wheat prices are becoming more competitive with other wheat exporters.
In this context, as at November 10, 2022, FOB prices saw US wheat No 2 Hard Red Winter (HRW) valued at $421/mt (down $6/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was valued at $361/mt (down $14/mt from last week).
Northern Durum offers from the Great Lakes for December 2022 delivery was valued at $11.83/bu, up $0.4/bu wk/wk ($435.00/MT + $15).
As for corn, US corn 3YC (Gulf) was at $338/mt (down $18/mt from last week).
As for soybean, US soybean 2Y (Gulf) quoted at $611/mt (down $9 from last week).
USDA reported the cash price for ethanol was between 11 to 25 cents higher from prior week renging from $2.57 to $2.89/gal regionally.
Corn oil was seen 1-2.6 cents higher, renging between 77.6 to 80 cents/lb regionally.
DDGS prices renged from unchanged to -$1.66/ton, with sales from $202.67 to $291.67/ton regionally.
DDGS prices to the Export Point averaged between $242.00 to $348/ton, down $6-7/ton from prior week.
USDA quoted in IL the B100 cash price at $6.88/gal, unchanged for the week, while posted $7/gal in MN.
In energy markets, oil prices settled higher on Friday but fell week-on-week.
Brent crude futures, indeed, settled up $2.32 at $95.99 a barrel, extending a 1.1% rise from the previous session but falling 2.6% on the week.
U.S. West Texas Intermediate (WTI) crude futures settled up $2.49, or 2.9%, at $88.96 a barrel, after climbing 0.8% in the previous session but down nearly 4% on the week.
Both benchmark fell during the week due to rising U.S. oil inventories, and lingering fears over capped fuel demand in China.
China’s COVID-19 caseload soared to its highest since the lockdown in Shanghai earlier this year.
Both Beijing and Zhengzhou reported record daily cases.
But an easing in Chinese COVID mesures late in the week and a weaker U.S. dollar, supported oil prices.
Also, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman said OPEC+ will remain cautious on oil production, noting that members saw “uncertainties” in the global economy ahead of the bloc’s next meeting in December, Bloomberg News reported on Friday.
OPEC+, last month agreed to steep production cuts, and will meet again on Dec. 4 to set its policy.
Thus, late-week gains only limited the losses.
In ocean freight markets, the Baltic Exchange’s dry bulk sea freight index marked its first weekly gain in five, even as it slipped on Friday due to a fall in capesize rates.
The overall index, indeed, shed 35 points, or about 2.5%, to 1,355.
The main index gained 2.4% for the week.
Notabily, the capesize index was down 108 points, or about 6.5%, at 1,544.
It posted a weekly gain of 15%.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes of coal and steel-making ingredient iron ore, decreased $895 at $12,807.
The panamax index rose 18 points, or about 1.1%, to 1,637, snapping a four-session losing streak.
It fell 3.7% this week.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, increased $161 to $14,735.
The supramax index lost 14 points to 1,213, extending its declines for a 15th straight session.
In equity markets, US stocks rallied on Friday extending Thursday’s sharp rally, with the S&P 500 posting an 8-week high, the Dow Jones Industrials climbing to a 2-1/2 month high, and Nasdaq 100 posting a 7-week high.
Notabily, the S&P 500 rose 0.92% or 36.56 points to 3,992.93, and its 5.9% gain for the week was its third in the last four and its biggest since June.
The Dow rose 32.49, or 0.1%, to 33,747.86, and the Nasdaq climbed 209.18, or 1.88%, to 11.323.33.
Both also notched hefty gains for the week.
The tech-heavy Nasdaq Composite index rose 8.1% this week to notch its biggest weekly gain since March, and the Dow added 4.15%.
Stock indexes rose on hopes cooler U.S. inflation would lead to less aggressive interest rate hikes by the Federal Reserve.
That pushed the dollar down 1.6% on the day, posting so its biggest two-day drop in 13 years.
Gold prices rose to a near three-month high and headed to at least their best week since July 2020.
Oil prices also rose.
However, gains in the Dow Jones Industrials were limited by weakness in healthcare companies and drugmakers.
The sharp rally seen on Thursday and Friday prompted some liquidation of defensive stocks, as investors braced for the economic impact of sharply higher interest rates.
The yield on benchmark U.S. 10-year paper slipped below 4% on Thursday.
There was no trading in the cash U.S. Treasury securities market Friday, as was closed for Veteran’s Day.
Meantime, crypto exchange FTX filed for U.S. bankruptcy and founder Sam Bankman-Fried stepped down as chief executive.
Global equity markets also moved higher Friday on carry-over support from a +1.69% rally in China’s Shanghai Composite to a 7-week high after the Chinese government eased some of its pandemic travel restrictions.
The country’s blue-chip CSI 300 index rose 2.8% and the Hang Seng Index surged 7.7%.
Asian shares scaled a seven-week high, with MSCI’s broadest index of Asia-Pacific shares outside Japan set for its biggest one-day percentage jump since March 2020.
Notabily, MSCI’s all-country world index rose 1.91%, lifting it to its highest levels since mid-September.
The MSCI emerging markets index jumped 5.19%, in its biggest single-day surge since March.
In currency trading, the dollar index on Friday fell by -1.67%, adding to Thursday’s -1.7% plunge, on negative carry-over from Thursday’s weaker-than-expected U.S. Oct CPI report.
The dollar extended its losses Friday after the University of Michigan U.S. Nov consumer sentiment index fell more than expected to a 4-month low.
EUR/USD on Friday rose by +1.44%, ralling sharply for a second day.
Also, a jump in European government bond yields strengthened the euro’s interest rate differentials as the 10-year German bund yield Friday rose +15.0 bp to 2.160% after the European Commission raised its 2022 and 2023 Eurozone CPI forecasts.
Specifically, the EU Commission raised its Eurozone 2022 GDP forecast to +3.2% from a July forecast of +2.6% and raised its Eurozone 2022 CPI forecast to +8.5% from +7.6%.
Also, the EU Commission cut its Eurozone 2023 GDP forecast to +0.3% from a July forecast of +1.4% and raised its Eurozone 2023 CPI forecast to +6.1% from a July forecast of +4.0%.
USD/JPY on Friday fell by -1.74%, ralling sharply for a second day and posted a 2-1/4 month high against the dollar.
An easing of Japan’s producer price pressures was more supportive for the yen after Japan Oct PPI eased to +9.1% y/y from+10.2% y/y in Sep.
Going back to analyzing the other Ag markets …
From Canada, Canadian Pacific (CP) said it broke its all-time monthly record for shipping Canadian grain and grain products in October, moving 3.14 MMT, 100,000 MT more than the previous record set in October 2020.
The company said it had moved 6.9 MMT of grain and grain products in the first 13 weeks of the 2022/23 crop year.
A CP executive said significant investment in new and upgraded grain-handling capacity, and high-capacity hopper cars have expanded the railroad’s capacity.
Meantime, producers’ deliveries of common wheat in week 14 of the shipping season, were at 428,9k mt.
That was slightly lower from 441,4k posted a week erlier.
Deliveries of durum wheat, in contrast, jumped to 147,7k mt from 96.7k mt a week earlier.
Meantime, Canada exported 488.8k mt of common wheat in week 14 of the shipping season.
That was up from 424.4k mt posted a week earlier.
Durum wheat exports, also were higher at 179.2k mt, up from 101.5k mt a week earlier.
Consequentially, total Commercial Stocks of common wheat stood at 2.654,0k mt, down from 2.833,2k mt a week earlier.
Durum total commercial stocks were also weaker at 777,9k mt, sligthly down from 782,6k mt posted the prior week.
Cumulative exports for common wheat are now at 5.116,8k mt, up from 3.422k mt year ago to date.
As for durum wheat, cumulative exports reached 1.002,7k mt, supassing the 928,5k mt year ago to date.
Cash bids for durum wheat continued to be higher this week.
Indeed, looking at the average regional price of C$499.56/mt as of Nov 11, that is C$1.03/mt higher than the prior week.
Going inside the numbers of the week, as at November 7, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $523.75 per tonne, down C$9.47/t from prior week;
– for the N2 class CWRS 13.0% – $517.51/t, down C$9.36 wow;
– for the N3 CWRS – $542.08/t, down C$8.18 from prior week.
As at November 7, 2022, for the N1 CWAD 13% (durum wheat first class) average street price were at C$496.04, unchanged week on week.
Meanwhile the export basis West Coast & Central SK, moved down from C$76.77 to 70.32 a tonne.
Thus, delivered FOB price Great Lakes was posted at C$566.36 (US$ 419.65/t -$0.85 wk/wk).
That represent a C$6.45/t decline from prior week.
Per latest data from European Commission, as at November 9, 2022, Durum wheat – FOB CA St Lawrence (CWAD) was offerd at C$622.2/t, down C$8.46/t week on week.
As at November 11, 2022, for the N1 CWAD 13% (durum wheat first class), average street price in REGIONAL ZONES was at C$499.56 per tonne, up C$1.03 from prior week.
(1USD=Cnd$1.3251 down from 1.3478 a week earlier).
From South America, as at November 10, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $411, down $2/t from prior week.
Argentina corn feed was down $7/t for the week, closing at $300.
Brazilian corn feed (Paranagua) was valued at $292, was down $7/t from prior week.
Argentina feed barley, was up $30 for the week to $360.
Argentina soybean was down $7 at $600.
Brazilian soybean was up $4, finishing the week at $617.
Argentina’s wheat exports this season will not quite reach half of last season’s shipments, the Rosario Grains Exchange (BCR) said on Friday, with only 7 million tonnes of exports expected after months of dry weather halved the 2022/2023 harvest.
During the previous 2021/2022 crop, the South American agricultural powerhouse exported 14.5 million tonnes of wheat.
The wheat crop gathered between November and January is seen totaling just 11.8 million tonnes, according to the BCR, down by half compared to 23 million tonnes produced in the previous crop.
If the production forecast proves correct, it would mark the smallest wheat crop in seven years.
The separate Buenos Aires Grains exchange on Thursday lowered its 2022/2023 wheat harvest estimate to 12.4 million tonnes from 14 million tonnes previously.
The BCR estimated that $2.22 billion in export revenues would be lost this season due to lower wheat exports.
The weaker harvest is straining Argentina’s ability to meet domestic demand as well as already agreed exports.
Last week, the government gave exporters license to push back by 360 days some wheat shipments scheduled for between December and February due to worries about shortages.
According to official data, exporters have already made sworn declarations to ship 8.85 million tonnes of wheat in the 2022/2023 season.
Brazil’s Safras & Mercado, meantime, now estimates Brazilian’s 2022/23 soybean production will reach a record-breaking 154.5 MMT.
That’s nearly 2% higher than the group’s prior projection.
In Europe, wheat prices were little changed on Friday, but hit seven-week lows on Thursday.
Particularly, December wheat prices on Euronext closed the week at 327.5 euros a tonne, down €11.75/t for the week.
December’s European Durum Wheat, settled at €513/t, down €0.5/t for the week.
March corn price, was down €13.5/t for the week, closing at 320 euros per ton.
Rapeseed Feb contract closed at €631.5/t, down €29.5/t for the week.
Nov-22 UK wheat feed contract, closed at £260.25/t, down £7/t week on week, while Jan 23 closed at £264.15.
Meantime, as of November 10, 2022, FOB prices in US dollar for French wheat with 11.5% protein and Oct delivery, were at $340/mt, up $3 from prior week.
German wheat, Deposilo Hamburg, was valued at $363.43/t, up $28.84 from prior week.
Baltic wheat, delivery first Vilnius, past week was at $337.54, up $18.88 from prior week.
Spanish durum wheat Sevilla (Depo Silo), N.Q. this week, past week was valued at $497.9/t.
French durum wheat – delivered La Pallice Spot – July 2022 basis, this week was valued at $481.46/mt, up $18.41 from prior week.
French durum wheat – FOB Port la Nouvelle, this week was n.q..
Italian durum wheat Bologna (Delivered to first customer), was valued $510.45/t, up $19.52 from prior week.
Corn, delivered Bordeaux Spot – July 2022 basis, was at $337.54 per tonne, down $6/t from past week.
Corn FOB Rhin Spot – July 2022 basis, was down $6.32 to $329.26/t.
Feed barley delivered Rouen was at 311.66 $/t, up $7.94 per tonne.
Malting barley FOB Creil Spot – July 2022 basis was at $381.03 per tonne, up $12.57/t from prior week.
Rapessed FOB Moselle – 2022 harvest was at 659.55$/ton, up $2.32 compared to prior week.
Standard sunseed FOB Bordeaux – 2022 harvest was up 24.13$ from prior week at $761.02 per tonne.
(Eur/USD = 1.0354 vs last week 0.9958).
From Russia, the Kremlin said on Friday that work was underway to address a number of Russian concerns regarding the Black Sea grain initiative, which is due to expire on Nov. 19.
There is a “reciprocal understanding” about Russia’s calls for the West to remove “obstacles” to its own fertilisers and grain exports, while negotiations and contacts are continuing, Dmitry Peskov said.
Russia’s agricultural exports have not been explicitly targeted by Western sanctions, but Moscow says blocks on Russia’s payments, logistics and insurance industries were a “barrier” to Russia being able to export its own grains and fertilisers.
Meantime, the Russian agriculture ministry revised the export tax for wheat, corn and barley.
Particularly, as of Nov. 16, the export duty on wheat will decrease to 2,922.1 from 3,012.0 rubles per ton a week earlier.
The duty on barley, in contrast, will increase to 2,686.7 rubles from 2,495.6 rubles per ton a week earlier.
For corn, in contrast, will down to 447.5 rubles from 1,114.3rubles a week earlier.
This new duty rates will be in effect through November 22, inclusive.
The duties were calculated based on indicative prices: $312.3 per ton for wheat ($314 a week earlier), $288.5 for barley ($283.7), $236.4 for corn ($251.6).
Meantime, Russia plans to set its export tax for all types of fertilisers at 23.5% when the price is more than $450 a tonne, the Interfax news agency quoted Trade Minister Denis Manturov as saying on Friday.
Russia is a major producer of potash, phosphate and nitrogen fertilisers, with output of more than 50 million tonnes a year, equating to 13% of global production.
Phosagro PHOR.MM, Uralchem, Uralkali, Acron AKRN.MM and Eurochem are the biggest players.
Officials have prepared a draft of the government decree that would set the export tax at this level, Manturov was quoted as saying by Interfax.
From the Middle Kingdom, wheat prices in China jumped to a record high despite the summer’s bumper harvest as wheat farmers wait for still higher prices while pandemic control has hindered logistics, resulting in a limited supply.
After summer, the price of one jin or half a kilogram of wheat rose by CNY0.2 to a new high of CNY1.65 (up by US 3 cents to US 20 cents) in most regions from previous years.
Demand tends to pick up at this time of year as flour mills usually acquire more wheat as temperatures drop, but many Chinese farmers remained relatively reluctant to sell wheat as they expect to receive a higher price later.
Moreover, supply is lower than demand since farmers are now busy with autumn harvest and planting while Covid-19 restrictions affect regional logistics.
Feed processors have had to seek alternatives to corn in the past two years amid skyrocketing corn prices, and a large amount of wheat has been used for fodder.
The consequences of the Russia-Ukraine conflict have also affected price expectations in the Chinese market to some extent in the short term.
Still, international price swings are not likely to have a significant impact on the domestic wheat market, Lin Guofa, research director at Bric’s agriproduct bulk trade platform, told Yicai Global.
Since 2000, there have been three global rounds of wheat price surges, but none of them had such a big effect on China, Lin added.
Imports are only a drop in the bucket compared to domestic output.
Last year, China imported 9.7 million tons of wheat, accounting for 7 percent of the domestic total, according to customs data.
Meantime, China will again auction off another 500k mt of its state reserves of imported soybeans on November 25.
China has offered a series of similarly sized auctions throughout 2022 as it attempts to boost local supplies and quell high prices.
From South East Asia, soaring wheat prices in India could prompt price-cooling measures such as the release of state reserves into the open market, meanwhile operators hoping an easing the 40% tax on imports.
Local wheat prices jumped to a record 26,500 rupees ($324.18) a tonne on Thursday, up nearly 27% since the May ban on exports.
Demand is robust, but supplies are dwindling, thus, prices are rising and will remain firm until the new-season crop starts next year.
Consequentially, the country could consider offloading state stocks in the market for bulk consumers such as flour and biscuit makers to reduce prices.
However, New Delhi could not release massive stocks so far owing to low inventories.
This year’s production has been around 95 million tonnes, far lower than the government’s projection of 106.84 million tonnes.
At the start of October wheat stocks in state warehouses totalled 22.7 million tonnes, down from 46.9 million tonnes a year earlier, after 2022 domestic wheat purchases fell 57%.
Thus, the government could also drop the 40% wheat import tax.
($1 = 81.74 rupees).
From Australia, prices for white grains in the north have softened this week as harvest sputters along in Queensland amid some patchy rain and widespread boggy conditions.
In the south, prompt wheat has rallied as the latest rain event further delays harvest progress and shorts fight it out to secure what limited grain can be found in the prompt market.
Flooding in parts of New South Wales and Victoria is thwarting the movement of grain, and a front now moving east across the states looks to further delay the start of the cereal harvest.
However, some crops on light and sloping country are being harvested in NSW, but windrowing of canola where possible remains the focus.
Meantime, indicative delivered prices in Australian dollars per tonne for old crops past week were:
Barley Downs: $375, down $35 from Nov 3;
SFW wheat Downs: $395, down $17 from Nov 3;
Sorghum Downs: $425, up $3 from Nov 3;
Barley Melbourne: $390, down $20 from Nov 3;
ASW wheat Melbourne: $460, down $8 from Nov 3;
SFW wheat Melbourne: $430, down $30 from Nov 3.
As for new crops, past week indicative prices for delivery in Jan-Feb were:
Barley Downs: $380, down $10 from Nov 3;
SFW wheat Downs: $398, down $17 from Nov 3;
Sorghum Downs: $420, up $32 from Nov 3;
Barley Melbourne: $370, down $20 from Nov 3;
ASW wheat Melbourne: $450 down $10 from Nov 3;
SFW wheat Melbourne: $425, down $5 from Nov 3.
(AUD/USD=> US$0.6707 vs. US$0.6464 prior week).
On the international trade scene, Tunisia purchased 100k mt of soft wheat (at an avg price of $379.54/t C&F), 100k mt of durum wheat (at an avg price of $531.94/t C&F) and 50k mt of animal feed barley (avg price of $346.42/t C&F), from optional origins.
The grain is for shipment between December 5 and January 25.
South Korea purchased 54k mt of animal feed wheat, likely sourced from optional origin.
The grain is for shipment between March 15 and April 15.
The Philippines likely passed on all offers to purchase 60k mt of animal feed wheat from optional origins.
Prices were regarded as too high.
The grain would have been for shipment between November and March.
South Korea purchased 68k mt of animal feed corn from optional origins (excluding eastern Europe).
The grain is for arrival in late February.
Egypt’s state grains buyer, the General Authority for Supply Commodities, is believed to have bought 280,000 tonnes of Russian wheat via direct purchases, at $362.5/t.
Grain Flower sold 2x 40,000 t , with consignement in the first half of December.
Grain Flower sold 2x 40,000 t, with consignement in the second half of December.
Aston sold 60,000 t, with consignement in the second half of December.
Viterra sold 60,000 t, with consignement in the second half of December.
The purchases comes a few days after GASC cancelled its first international wheat tender since July on Monday, citing high prices.
The lowest C&F offer at the tender was $369.95 per tonne for 40,000 tonnes of Russian wheat, with traders adding that GASC was negotiating for a price of $360 per tonne.
Watching next week’s market, we start out with the US Export Inspections report on Monday afternoon.
The Crop Progress report will out overnigth after the sessions close. Monday is also expiration day for November soybean futures.
On Tuesday, NOPA will release their monthly crush report for October.
Skip ahead to Wednesday, with the EIA weekly ethanol production and stocks report.
On Thursday, weekly Export Sales data will be published, with November feeder cattle futures and options also expiring.
Finally, to round out the week on Friday, NASS will release their monthly Cattle on Feed report.
FOOD IMPORT COSTS RISE TO RECORD IN 2022
Food imports costs across the world are on course to hit a near $2 trillion record in 2022, piling pressure on the globe’s poorest countries who likely shipped in considerably less volumes of food, the U.N. Food Agency said on Friday.
World food prices soared to record levels in March.
The increase is disproportionately affecting economically vulnerable countries, and is expected to continue doing so next year even as the overall agricultural supply situation is set to improve a bit.
The world’s food import bill is projected to reach $1.94 trillion this year, up 10% year-on-year and higher than previously expected, the FAO said.
It noted that low income countries’ food import volumes are seen shrinking 10% as their food import bill for the year remains almost unchanged, pointing to growing accessibility issues.
In terms of agricultural inputs like fertilisers, which require a lot of energy to produce, the FAO said global import costs are set to rise nearly 50% this year to $424 billion, forcing some countries to buy and use less.
This will inevitably lead to lower productivity, lower domestic food availability and “negative repercussions for global agricultural output and food security” in 2023, it said.
Looking to the 2022/23 season, the agency sees wheat production jumping 0.6% year-on-year to hit a record 784 million tonnes, but notes increases are expected mostly in China and Russia, leaving inventories down 8% in the rest of the world.
Production of coarse grains like corn, barley and sorghum is meanwhile seen falling 2.8% in the season.
On the plus side, however, the FAO said oilseeds output is seen rebounding 4.2% to hit an all time high, sugar output is seen rising 2.6%, while rice output is expected to remain at overall average levels thanks to resilient plantings in Asia and recovering output in Africa.
That’s all, thank you.
We wish you a good day and a good weekend.
Author: Sandro F. Puglisi
