US farm markets ended this week on a high note.
Corn prices closed out the week with nearly another 20 cent gain, up 3.20%.
That is a 39 ¾ cent gain over the past 2 weeks.
Soybeans added another 3.94% gains on the week.
That took the 2 week move for March to $1.00 ¼ higher!
Soybean meal joined the party this week, up $18.50/ton or 4.71%.
Soy oil climbed another 3.60%.
The wheat complex ended the week mixed, but some wheat contracts were up more than 2%.
Particularly, the winter wheats held up nicely, with KC wheat up another 9 or 1.13% and CBOT rallying by 6 ¼ or 0.81%, since last Friday.
MPLS spring wheat was the weak spot, down 15 ¾ cents or 1.68% on the week.
Particularly, corn futures were up 19.8 cents to $6.36/bu.
Soybean futures were up $0.557 at $14.70/bu.
Soymeal jumped by $18,5/smt at $411.20 smt.
Soy oil soared $2.27 cents at $65.27.
CBOT soft red winter (SRW) futures rose 63 cents to close at $7.86/bu.
KCBT hard red winter (HRW) futures gained 90 cents to end at $8.02/bu.
MGE hard red spring (HRS) futures shedded 15.70 cents to close at $9.20/bu.
Meantime, as of January 27, 2022, US corn 3YC (Gulf) was at $295/mt (up $9/mt from last week).
US soybean 2Y (Gulf) quoted at $584/mt (up $11/mt from last week).
US wheat No 2 Hard Red Winter (HRW) was valued at $387/mt (up $12/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was at $341/mt (up $1/mt from last week).
Northern Durum offers from the Great Lakes for April/May 2022 delivery are quoted at $635/MT ($17.28/bu) (down $25/t from prior week).
Meantime, USDA reported the week’s average cash corn oil price ranged from 67.1 to 69 cents/lb regionally through the week.
That compared to 62.5 – 64.4 cent average prices last week.
DDGS FOB prices were reported higher as well, with USDA seeing NOLA bids at $265/ton and PNW at $290/ton.
Last week’s FOBs were $252 and $287 respectively.
The weekly average ethanol cash prices were down.
Indeed, average prices, ranged for the week ended 1/28 between $1.86 KC to $2.06 EC compared to prior week when ranged from $1.95 to $2.11/gal.
Meanwhile gasoline futures ended the week at $2.5480, that was up from $2.4451/gal posted last week.
The weekly spot price for B100 fuel was up $0.37 cents from prior week to close at $5.55/gal during the week of 1/28.
USDA’s weekly Crush report showed the estimated processing value of soybeans was $16.91/bu on $14.12 cash beans.
That compared to $17.24/bu reported prior week on $13.63 beans.
In energy market, oil prices rose to a more than seven-year peak on Friday and recorded their sixth straight weekly gain as geopolitical turmoil exacerbated concerns over tight energy supply.
On a weekly basis, the benchmark contracts notched their longest run of gains since October.
Indeed, Brent futures rose 69 cents in the end week session, to settle at $90.03 a barrel, after hitting $91.70, the highest level since October 2014.
U.S. crude closed 21 cents higher at $86.82 per barrel, after hitting a seven-year peak of $88.84 during the session.
For the week, Brent futures gained 2.43%, while U.S. West Texas Intermediate (WTI) crude lifted 1.97%.
In the freight market, the Baltic Exchange’s dry bulk sea freight index registered its biggest daily percentage gain since September on Friday, boosted by a jump in capesize vessel rates.
The overall index, which factors in rates for capesize, panamax and supramax vessels, indeed, rose 79 points, or 6.1%, to 1,381.
However, the index is down 2% for the week, its fourth consecutive weekly decline.
Particularly the capesize index climbed 257 points, or 31.4%, to 1,075, its highest level in more than a week.
Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, rose by $2,138 to $8,918.
The panamax index eased 6 points to 1,840, its lowest since April.
Average daily earnings for panamaxes, which ferry 60,000-70,000 tonne coal or grain cargoes, fell by $58 to $16,557.
The supramax index slipped 16 points to its lowest level since February 2021 at 1,597.
In equities markets, world stocks rallied on Friday as investors turned their eyes toward corporate earnings and ignored geopolitical turmoil and Federal Reserve tightening concerns.
Indeed, MSCI’s 50-country main world index rose 1.49% but remained on the brink of its worst January since the 2008 global financial crisis after shedding roughly $7 trillion in value.
Strong earnings from tech firms including Apple, which rose nearly 7% after reporting record sales over the holiday quarter, and Microsoft which rose 2.8%, buoyed U.S. markets during the end week session.
Thus, all three major U.S. stock indexes closed higher on Friday.
The Dow Jones Industrial Average rose 1.65% and the S&P 500 gained 2.43%.
The Nasdaq Composite added 3.13%.
Particularly, the S&P 500 rose 105.34 points to 4,431.85, posting a weekly gain of 0.77%.
That is the index’s biggest daily gain since June 2020, but comes late in a week where investors had been monitoring the S&P 500 for what market watchers call a “correction”, when an index sheds more than 10% of its value from a record high.
The index, indeed, is now 7.6% below the latest record reached on Jan. 3.
The Dow gained 564.69 points closing to 34,725.47, for a weekly gain of 1.34%.
The Nasdaq rose 417.79 points to 13,770.57, that left substantially unchanged from prior week.
The dollar, meanwhile, consolidated gains and posted its biggest weekly rise in seven months as markets priced in a year ahead of aggressive hikes in U.S. interest rates.
The prospect of faster or larger U.S. interest rate hikes and possible stimulus withdrawal lifted the dollar index.
Indeed, the dollar index, which tracks the greenback versus a basket of six currencies, which had fell 0.138% to 95.636 prior week, this week increased to 97.226, gaining for the week, more then 1.6%.
On the other hand, in the 12 months through December, the PCE (personal consumption expenditure price index) increased 5.8%, but still no more than had been expected.
That was the largest advance since 1982 and followed a 5.7% year-on-year increase in November.
The pan-European STOXX 600 index, in contrast, closed down 0.99% on the day for a fourth week of losses, weighed down by worries over the situation in Russia and Ukraine.
On the weather side, drought’s footprint in the High Plains has been increasing throughout the winter, covering 83.0% of the region three months ago and covering 90.3% through January 25, per the latest updates to the U.S. Drought Monitor.
The Midwest is faring better, with drought covering 38.9% of the region.
Particularly, despite some improvement to drought over the fall and winter in the Dakotas, topsoil moisture is greater than 40% very short to short.
Across all other plains states topsoil moisture is at least one half very short or short.
Further south, exceptional drought expanded in western Oklahoma and topsoil was rated 81% very short to short and in Texas it is 64%.
In the PNW, the week was dry.
The region has experienced improvements over the water year which began October 1 however more rain is necessary to sustain drought improvements for the region.
In this context, the USDA this week said at least one quarter of winter wheat is rated very poor to poor with Kansas (31%), Wyoming (33%) and Colorado (40%) each above that mark.
Winter wheat is rated 71% very poor or poor in Texas and 43% in Oklahoma, compared to 45% and 16% respectively seen in November.
Very little rain or snow is expected to land on the Midwest or Plains between today and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA, although some scattered showers are possible in a few parts of the upper Midwest and Great Lakes region.
NOAA’s 8-to-14-day outlook predicts more seasonally dry weather encroaching into the Central Plains between February 4 and February 10, with seasonally cool weather likely for the eastern half of the United States.
In Canada, as of January 24, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $496.52 per tonne, up C$35.75/t from prior week;
– for the N2 class CWRS 13.0% – $484.85/t, up C$34.66 wow;
– for the N3 CWRS – $476.92/t, up C$35.93 from prior week.
As of January 24, 2022, for the N1 CWAD 13% (durum wheat first class) deferred average prices for delivery in March ’22 were at C$707.69 down C$30 per tonne week on week.
Spot export basis West Coast & Central SK soared from C$ 120.08 to 132.28 per tonne, as delivered FOB price Great Lakes was at C$ 839.97, up from C$ 827.72 per tonne posted prior week.
That was C$12.25 higher from the prior week.
Meanwhile, as of January 26, 2022, durum wheat (CWAD) FOB price delivered in St. Lawrence, was valued at C$872.69 per tonne, up C$15.05 from prior week.
As of January 28, 2022, for the N1 CWAD 13% (durum wheat first class), average street prices in REGIONAL ZONES were at C$698.08 per tonne, down C$8.46 from prior week.
(1USD=Cnd$1.2740).
In South America, as of January 27, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $306, up $5 from prior week.
Argentina corn feed was down $1/t for the week, closing at $275.
Brazilian corn feed (Paranagua) was at $295, up $5 from prior week.
Argentina feed barley, was up $10 on week, posting at $300.
Argentina soybean was down $3 at $605.
Brazilian soybean rose $13 finishing the week at $567.
In Europe, Euronext rose again on Friday in a market still marked by the Ukrainian crisis.
The scenario of a Russian invasion remains judged as not very credible by many observers, but the failure of the last negotiations between the US and Russia has catalyzed many fears.
The likely disruption of trade flows in the Black Sea thus continues to drive up grain prices.
Thus, the wheat contract gained 6.25 euros for the week to close at 278.75 euros per tonne, soaring for a second week in a row, by 2.29%.
Corn prices rose 9.75 euros for the week, to close at 257.25 euros per tonne, lifting by 394% for the week.
In rapeseed, volatility continued also on this week.
Indeed, February futures after had seen a continues “bungee jumping”, finally closed this week at 755.5€/t, down €1.5/t to sett a 0.2% losses week on week.
March-22 UK feed wheat futures, gained £2.1 from prior week, closing at £219.05/t.
Meantime, as of January 27, 2022, FOB prices in US dollar for French wheat with 11.5% protein and February delivery, were at $317/mt, down $2/t from prior week.
French durum wheat, FOB Port la Nouvelle was not quoted for the second consecutive week.
French durum wheat – basis La Pallice, was at $518.15 /mt, down $9.35 from prior week.
Spanish durum wheat Sevilla (DepSilo), was at $607.29/mt, down $5.29 from prior week.
Italian durum wheat Bologna (Delivered to first customer), was valued this week at $605.06 per tonne down $10.44 from past week.
German wheat (Depsilo) with 12.5 pro was at $313.12/mt, down $12.45 from last week.
Baltic wheat (Delivery First) was at $293.06/mt, down $10.96.
Corn delivered Bordeaux Spot – July 2021 basis was at $287.49 per tonne, up $5.02 from prior week.
FOB Rhin Spot – July 2021 basis was at $295.29 per tonne, up $2.61 week on week.
Feed barley delivered Rouen – July 2021 basis was at 286.37 $/t, down $1.76.
Malting barley FOB Creil Spot – July 2021 basis was at $390 per tonne, down $32/t from prior week.
Rapessed FOB Moselle Spot – Flat – 2021 harvest was at 777.78$/ton, down $26.51 compared to prior week.
Standard sunseed delivered St Nazaire Spot – Flat – 2021 harvest was down 12.56$ from prior week at $696.44 per tonne.
European FOB prices, in US dollar, suffered this week by the strength of the dollar which posted its biggest weekly rise in seven months.
From the Black Sea basin, Russian wheat export prices fell past week.
A weaker rouble against the dollar, due fears related to a stand-off between Moscow and the West over Ukraine, plumbted domestic market.
Thus, according to the IKAR, Russian wheat with 12.5% protein content loading from Black Sea ports for supply in February stood at $326 a tonne free on board (FOB), down $2 from the previous week.
According to SovEcon, wheat prices were down $1 at $331 per tonne.
Meanwhile, price of barley remained stable at $295 a tonne.
Other Russian data provided by Sovecon and IKAR have seen:
– Domestic 3rd class wheat, European part of Russia, excluded delivery at 14,975 -100 rbls roubles/t ($190.9) (Sovecon);
– Sunflower seeds at 36,200 rbls/t +825 rbls (Sovecon);
– Domestic sunflower oil at 86,500 rbls/t +500 rbls (Sovecon);
– Export sunflower oil at $1,375/t +$25 (Sovecon);
– Export sunflower oil at $1,355/t +$10 (IKAR);
– Soybeans at 43,900 rbls/t +200 rbls (Sovecon);
– White sugar, Russia’s south at $652.8/t -$16.4 (IKAR).
($1 = 78.0065 roubles).
Meantime, the Russian agriculture ministry on Friday has amended the export tax for wheat, barley and corn for the week of February 02-08, 2022.
Particularly, the tax will be $93.9 on wheat, $74.6 on barley and $49.2 on corn.
Indicative price will be $334.2 for wheat, $291.7 for barley and $255.3 for corn.
That is compared, with prior week (Jan 26-Feb 01) when the tax was $95.8 for wheat, $74.40 for barley and $50.6 for corn, while indicative price were $336.9 for wheat, $291.3 for barley and $257.4 for corn.
In Ukraine, as of January 26, 2022, wheat prices were at $312/t, down $4 from prior week.
Corn price was at $285 per tonne, up $5/t week on week.
Barley was valued at 298 $/t, up $3 from last week.
From Australia, the weight of a big crop on the cusp of harvest has put pressure on sorghum prices this week, while wheat and barley markets have been mostly steady.
Most growers are now back from their summer break, and good rain has fallen in the past week over some parts of south-eastern Australia to inspire confidence in an early and strong start to planting of the 2022-23 winter crop.
It means grower interest in selling stored or warehoused grain has picked up, and a strengthening in global values has enabled prices to hold ground.
The national Australia Day public holiday has shortened the working week, and consumers appear keen to make a modest advance on their February-March coverage.
Particularly, indicative delivered prices in Australian dollars per tonne were:
Barley Downs: (Nearby) $290, steady from Jan 20;
SFW wheat Downs: (Nearby) $305, steady from Jan 20;
Sorghum Downs: (Nearby) $295, down $10 from Jan 20;
Barley Melbourne: (Nearby) $315, steady from Jan 20;
ASW wheat Melbourne: (Nearby) $380 down $5 from Jan 20.
SFW wheat Melbourne: (Nearby) $345 steady from Jan 20.
(AUD/USD=> US$0.7031).
On international trade scene, Turkey TMO provisionally buys 6,000 tonnes sunflower oil at $1,410.90 a tonne c&f from trading house Yayla.
Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), bought 420,000 tonnes of wheat in an international tender it said on Friday.
The purchase comprised 60,000 tonnes of Ukrainian wheat offered by Nibulon at US$/MT 326 FOB or US$346.89 MT C&F;
60,000 tonnes of Russian wheat offered by Grain Export at US$/MT 329.65 FOB or US$350 MT C&F;
60,000 tonnes of Romanian wheat offered by Ameropa at US$ 329.65 FOB or US$349.40 C&F.
The shipment is for March 5-15.
Also, 60,000 tonnes of Ukrainian wheat offered by Nibulon at US$ 326 FOB or US$346.89 C&F;
60,000 tonnes of Romanian wheat offered by CHS at US$ 329.65 FOB or US$349.40 C&F; 60,000 tonnes of Ukrainian wheat offered by Inerco at US$ 328.77 FOB or US$350 C&F; 60,000 tonnes of Russian wheat offered by Grain export at US$ 329.20 FOB or US$349.55 C&F.
The shipment is for March 16-26, GASC said.
An importer group in the Philippines bought around 50,000 tonnes of animal feed wheat to be sourced from Australia in an international tender.
The wheat was purchased at about $338 to $340 a tonne c&f for June shipment.
South Korean importers Feed Leaders Committee (FLC) and Feed Buyers Group (FBG) on Thursday jointly bought about 60,000 tonnes of soymeal expected to be sourced from South America in a private deal without issuing an international tender.
The purchase was made at an estimated $544.99 a tonne c&f including surcharge for additional port unloading.
Seller was believed to be trading house Cofco.
The soymeal was for arrival in South Korea around May 17 with shipment from South America between March 19 and April 7.
The purchase was made after Korean importer NOFI also bought 60,000 tonnes of soymeal expected to be sourced from South America on Thursday.
It was all purchased at an estimated $548.50 a tonne c&f plus a surcharge of about $2.10 a tonne for additional port unloading.
Seller was believed to be trading house Cargill.
It was bought for arrival in South Korea around May 3.
Shipment period from South America was believed to be between Feb. 14 and March 25, slightly different than the original tender terms.
Algeria’s state grains agency OAIC has purchased milling wheat in an international tender on Wednesday which seeks shipment to two ports only.
Initial estimates of the purchase were about 60,000 to 80,000 tonnes.
As just two ports were designated for imports, Mostaganem and Tenes, only a relatively small volume was expected to be purchased.
The purchase is expected to be sourced from the Black Sea region.
Initial price estimates were around $375 a tonne c&f.
The wheat was sought for shipment in three periods from the main supply regions including Europe: Feb. 16-28, March 1-15 and March 16-31.
If sourced from South America or Australia, shipment is one month earlier.
Algeria does not release results of its tenders and reports are based on trade estimates.
South Korean animal feedmaker Nonghyup Feed Inc. (NOFI) is believed to have purchased around 193,000 tonnes of animal feed corn in a tender on Wednesday.
The corn was bought in three consignments in a combination of outright prices and premiums over Chicago futures.
The first consignment of 62,000 tonnes for arrival around April 20 was believed to have been bought from trading house ADM at the outright price of $338.95 a tonne c&f and at a premium of 245 U.S. cents over the Chicago May corn contract CK2 plus a $1.50 a tonne surcharge for additional port unloading.
Shipment is between March 18 and April 6 if sourced from the U.S. Pacific Northwest coast; between Feb. 26 and March 17 from the U.S. Gulf or Black Sea/east Europe; Feb. 16-March 7 from South America; or March 3-22 from South Africa.
The second consignment of 65,000 tonnes for arrival around April 30 was said to have been bought from Cofco at $336.77 a tonne c&f and at a premium of 241.44 U.S. cents over the Chicago May corn contract CK2 plus $1.80 a tonne for additional port unloading.
Shipment for the second consignment if from the U.S. Pacific Northwest coast is between March 28 and April 16; from the U.S. Gulf or Black Sea/east Europe between March 8-27; from South America Feb. 26-March 17; or from South Africa March 13-April 1.
The third consignment of 66,000 tonnes for arrival around May 10 was believed to have been bought from Olam at $336.80 a tonne c&f and at a premium of 238 U.S. cents over the Chicago May contract CK2 plus $1.50 a tonne for additional port unloading.
The third consignment involved shipment from the U.S. Pacific Northwest coast between April 7-26, from the U.S. Gulf or Black Sea/east Europe between March 18 and April 6, from South America March 8-27, or from South Africa March 23-April 11.
Watching next week market, markets will have quite a bit of data to chew through next week.
Per the normal weekly schedule, the Export Inspections data will be released on Monday morning.
That afternoon, cattle traders will have the semi-annual Cattle Inventory report to dissect.
Grain traders will get the monthly Grain Crushing and Fats & Oils report on Tuesday afternoon.
Weekly EIA data will be released on Wednesday morning.
The weekly Export Sales report is expected on Thursday.
Author: Sandro F. Puglisi
