GRAIN MARKET VIEW
August 22, 2023 – Market Focus
Good morning, Farmer Family …
Main Markets
USA
US farm markets were mixed but mostly lower on Monday.
Corn market dropped 2.14%, closing near the lows for the day.
Soybeans, in spite gave up most of the early gain, it was still enough to close 0.53% higher.
Soymeal ended the day with 1.46% gains, while bean oil closed with 0.44% losses.
Wheat prices continued their decline, closing with double digit losses. Chicago SRW indeed settled 2.28% lower, Kansas City HRW closed down by 1.66%, and Minneapolis spring wheat were down 2.55% by the close.
Wheat prices tumbled on Ukrainian grain optimism.
Corn followed wheat lower, while soybeans inched up on hot forecasts.
Weekly Export Inspections data showed a total of 311,314 MT of wheat shipped during the week that ended on August 17.
For corn the report showed shipping for 458,256 MT.
For soybean the report indicated a total of 316,074 MT of soybeans were shipped.
Separately, via mandatory announcement, the USDA published an export sale of 111,770 MT of new crop corn to Mexico, and an export sale of 159,350 MT of soybeans to unknown destinations.
Ohio corn yield prospects and soybean pod counts are above last year and higher than the three-year average, Pro Farmer scouts said during the annual tour of top U.S. production states.
In this context …
Commodity funds were net buyers of CBOT soybean and soymeal futures contracts, and net sellers of CBOT corn, wheat and soyoil futures contracts.
After the sessions close, the weekly Crop Progress report showed the national soybean crops as 4% very poor, 9% poor, 28% fair, 49% good, 10% excellent.
NASS had 4% of the national corn crop mature, and 58% “good to excellent”; down 1 point on the week.
Spring wheat conditions were at 38% “good to excellent”, down 4 points on the week.
Winter wheat harvest advanced to 96% complete, while spring wheat harvest was 39% complete.
Harvest progress reaches 47% for durum wheat in Montana. The rating (G+E) fell to 10% from 18% previous week. In N.Dakota it dropped to 46% from 52%.
This morning, Chicago wheat prices rose, recouping some of last session’s losses with the potential decline in yields.
Soybeans and corn fell after the Pro-Farmer crop tour forecasted above-average yields in Ohio, easing concerns over supplies.
Corn market dropped 2.14%, closing near the lows for the day.
Soybeans, in spite gave up most of the early gain, it was still enough to close 0.53% higher.
Soymeal ended the day with 1.46% gains, while bean oil closed with 0.44% losses.
Wheat prices continued their decline, closing with double digit losses. Chicago SRW indeed settled 2.28% lower, Kansas City HRW closed down by 1.66%, and Minneapolis spring wheat were down 2.55% by the close.
Wheat prices tumbled on Ukrainian grain optimism.
Corn followed wheat lower, while soybeans inched up on hot forecasts.
Weekly Export Inspections data showed a total of 311,314 MT of wheat shipped during the week that ended on August 17.
For corn the report showed shipping for 458,256 MT.
For soybean the report indicated a total of 316,074 MT of soybeans were shipped.
Separately, via mandatory announcement, the USDA published an export sale of 111,770 MT of new crop corn to Mexico, and an export sale of 159,350 MT of soybeans to unknown destinations.
Ohio corn yield prospects and soybean pod counts are above last year and higher than the three-year average, Pro Farmer scouts said during the annual tour of top U.S. production states.
In this context …
Commodity funds were net buyers of CBOT soybean and soymeal futures contracts, and net sellers of CBOT corn, wheat and soyoil futures contracts.
After the sessions close, the weekly Crop Progress report showed the national soybean crops as 4% very poor, 9% poor, 28% fair, 49% good, 10% excellent.
NASS had 4% of the national corn crop mature, and 58% “good to excellent”; down 1 point on the week.
Spring wheat conditions were at 38% “good to excellent”, down 4 points on the week.
Winter wheat harvest advanced to 96% complete, while spring wheat harvest was 39% complete.
Harvest progress reaches 47% for durum wheat in Montana. The rating (G+E) fell to 10% from 18% previous week. In N.Dakota it dropped to 46% from 52%.
This morning, Chicago wheat prices rose, recouping some of last session’s losses with the potential decline in yields.
Soybeans and corn fell after the Pro-Farmer crop tour forecasted above-average yields in Ohio, easing concerns over supplies.
Canada
Agriculture and Agri-Food Canada (AAFC) cut its 2023-24 all-wheat production forecast by 2.1Mt, to 33.2Mt, cut exports by 0.8Mt to 23.8Mt, and cut ending stocks by 1.4Mt, to 3.7Mt.
Durum wheat production was lowered at 4.91 Mt.
Maize production forecast was raised by 0.8Mt, to 15.3Mt (14.5Mt).
Canola production was left unchanged at 18.8Mt but AAFC noted an error with 2022-23 carry in and/or production being underestimated by around 663kt which will be revised in the next report.
AAFC, noted severe drought continues across Western Canada, with the most impact in Southern Alberta and Western Saskatchewan.
Significant uncertainty remained regarding estimates of crop yield and production, AAFC said.
Durum wheat production was lowered at 4.91 Mt.
Maize production forecast was raised by 0.8Mt, to 15.3Mt (14.5Mt).
Canola production was left unchanged at 18.8Mt but AAFC noted an error with 2022-23 carry in and/or production being underestimated by around 663kt which will be revised in the next report.
AAFC, noted severe drought continues across Western Canada, with the most impact in Southern Alberta and Western Saskatchewan.
Significant uncertainty remained regarding estimates of crop yield and production, AAFC said.
South America
Brazil
Brazilian farmers had harvested 77% of the area planted for their second corn crop in the center-south region by Aug. 17, consultancy AgRural said.
AgRural also forecasted Brazil’s total corn crop to reach 135.4 million metric tons in 2022/23, with the second crop totaling 105.6 million tons.
AgRural noted that farmers in southern Brazil have already started sowing fields for their first 2023/24 corn crop, with 4.6% of the total estimated area planted complete.
COFCO, a Chinese owned company, finished construction of Brazil’s first Biodiesel pipeline. The pipeline runs from Rondonopolis MG to Port Santos, capable of sending 280m3 per hour.
Brazilian farmers had harvested 77% of the area planted for their second corn crop in the center-south region by Aug. 17, consultancy AgRural said.
AgRural also forecasted Brazil’s total corn crop to reach 135.4 million metric tons in 2022/23, with the second crop totaling 105.6 million tons.
AgRural noted that farmers in southern Brazil have already started sowing fields for their first 2023/24 corn crop, with 4.6% of the total estimated area planted complete.
COFCO, a Chinese owned company, finished construction of Brazil’s first Biodiesel pipeline. The pipeline runs from Rondonopolis MG to Port Santos, capable of sending 280m3 per hour.
Europe
European wheat prices eased as pre-weekend concerns about war disruption to Black Sea exports subsided.
The EU Commission is considering subsidizing transport of Ukrainian grain through its member states.
The European Commission’s MARS report lowered its estimates of winter crop yields for the EU27 for the third month in a row. Notably, soft wheat yield was pegged at 5.78 t/ha, durum wheat at 3.41 t/ha, barley at 4.74 t/ha, rapeseed at 3.19 t/ha.
The report also warned on a deterioration in the quality of wheat in northern Europe.
For spring crops corn yield was seen at 7.45 t/ha, and sunflower at 2.18 t/ha.
The EU Commission is considering subsidizing transport of Ukrainian grain through its member states.
The European Commission’s MARS report lowered its estimates of winter crop yields for the EU27 for the third month in a row. Notably, soft wheat yield was pegged at 5.78 t/ha, durum wheat at 3.41 t/ha, barley at 4.74 t/ha, rapeseed at 3.19 t/ha.
The report also warned on a deterioration in the quality of wheat in northern Europe.
For spring crops corn yield was seen at 7.45 t/ha, and sunflower at 2.18 t/ha.
Turkey
Turkish Foreign Minister Hakan Fidan could soon visit Moscow to discuss the Black Sea grain deal.
Ukraine
Ukraine’s Ag. Ministry reported that, as at 18 August, its 2023-24 wheat harvest has yielded 20.8Mt from 94pc of planned area, with average productivity at 4.8t/ha, barley at 5.6Mt from 94pc of area, with average productivity at 4.0t/ha. Rapeseed harvest yielded 3.9Mt, with average yields at 2.9t/ha.
Ukraine is considering using its newly-tested wartime Black Sea export corridor for grain shipments after other cargo ships follow the first successful evacuation of a vessel on the route last week.
According to the State Customs Service, in 2023/24 MY, as of August 21, Ukraine exported 3.607 mln tonnes of grains and pulses, including 1.333 mln tonnes in August.
Notably, Ukraine shipped to foreign markets: – wheat for 1.467 mln tonnes (646 thsd tonnes in August);- barley for 422 thsd tonnes (127 thsd tonnes);- rye for 0.6 thsd tonnes (0.1 thsd tonnes);- corn for 1.711 mln tonnes (558 thsd tonnes). The total export of Ukrainian flour, as of August 21, totaled 17.7 thsd tonnes (7.8 thsd tonnes in August), including 17.1 thsd tonnes of wheat flour (7.5 thsd tonnes).
Kazakhstan
To date, Kazakhstan harvested 2.8 mln tonnes of grains with an average yield of 1.15 t/ha.
Ukraine is considering using its newly-tested wartime Black Sea export corridor for grain shipments after other cargo ships follow the first successful evacuation of a vessel on the route last week.
According to the State Customs Service, in 2023/24 MY, as of August 21, Ukraine exported 3.607 mln tonnes of grains and pulses, including 1.333 mln tonnes in August.
Notably, Ukraine shipped to foreign markets: – wheat for 1.467 mln tonnes (646 thsd tonnes in August);- barley for 422 thsd tonnes (127 thsd tonnes);- rye for 0.6 thsd tonnes (0.1 thsd tonnes);- corn for 1.711 mln tonnes (558 thsd tonnes). The total export of Ukrainian flour, as of August 21, totaled 17.7 thsd tonnes (7.8 thsd tonnes in August), including 17.1 thsd tonnes of wheat flour (7.5 thsd tonnes).
Kazakhstan
To date, Kazakhstan harvested 2.8 mln tonnes of grains with an average yield of 1.15 t/ha.
China
China’s northeastern grain producing region is bracing for another deluge of heavy rain that could inundate corn and soybeans and further impact crop growth.
South-East Asia
Malaysian palm oil prices ended at more than a three-week high.
Exports of Malaysian palm oil products for Aug. 1-20 rose between 9.8% and 17.4% from the same period a month earlier, according to some cargo surveyors.
Exports of Malaysian palm oil products for Aug. 1-20 rose between 9.8% and 17.4% from the same period a month earlier, according to some cargo surveyors.
Australia
Aussie local markets continued to firm.
Current crop ASW1 in Kwinana zone traded up to $390/t FIS, APW1 in Melbourne port zone traded at $390/t on Clear Grain Exchange for small volumes and new crop wheat markets were largely unchanged from the end of last week.
SA barley firmed over the course of the day on current crop with BAR1 track, trading around $326-330/t levels and canola saw another day with gains of up to $5-10/t on new and current crop.
Pulse demand also remains strong in Victoria zones with buyers on the hunt again.
Current crop ASW1 in Kwinana zone traded up to $390/t FIS, APW1 in Melbourne port zone traded at $390/t on Clear Grain Exchange for small volumes and new crop wheat markets were largely unchanged from the end of last week.
SA barley firmed over the course of the day on current crop with BAR1 track, trading around $326-330/t levels and canola saw another day with gains of up to $5-10/t on new and current crop.
Pulse demand also remains strong in Victoria zones with buyers on the hunt again.
Auctions
Wheat
The Taiwan Flour Millers’ Association has issued an international tender to purchase an estimated 104,000 metric tons of grade 1 milling wheat to be sourced from the United States. The deadline for submission of price offers in the tender is Friday, Aug. 25.
Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) is seeking wheat in an international purchasing tender. The deadline for offers is Aug. 22. Offers should be submitted on a free-on-board (FOB) basis, for at sight payment using funding from the ITFC, GASC said on Monday. Shipment will be from Oct. 5-20 and/or Oct. 25-Nov. 10 and/or Nov 15-30.
Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) is seeking wheat in an international purchasing tender. The deadline for offers is Aug. 22. Offers should be submitted on a free-on-board (FOB) basis, for at sight payment using funding from the ITFC, GASC said on Monday. Shipment will be from Oct. 5-20 and/or Oct. 25-Nov. 10 and/or Nov 15-30.
Soymeal
Iran is on the market for 120k MT of soymeal, via tender.
Macroeconomics
Energy markets
Oil prices settled lower as hopes for Chinese demand faded.
This morning oil prices extended losses as the market waited to see if Iraqi oil exports resume.
This morning oil prices extended losses as the market waited to see if Iraqi oil exports resume.
Ocean freight markets
The Baltic Exchange’s main sea freight index in London fell for a second straight session weighed down by a dip in capesize vessel rates.
Equity markets
On Wall Street, US stock indexes settled mostly higher on a rally led by chip stocks and the technology sector.
This morning Asian stocks followed Wall Street higher, as traders waited for signs of interest rate plans from this week’s Federal Reserve conference.
Currency trading
The dollar index fell as mostly higher equity prices curbed liquidity demand for the dollar, but losses were limited after the 10-year US T-note yield climbed to a nearly 16-year high.
This morning, the dollar declined to 145.94 yen from Monday’s 146.11 yen. The euro rose to $1.0915 from $1.0899.
