GRAIN MARKET VIEW
August 28, 2023 – Market Focus
Good morning, Farmer Family …
Corn prices dropped 0.32%.
Soybeans grabbed double-digit gains, rising 1.12%.
The rest of the soy complex was also in the green, though soymeal picked up just 0.02%, while soyoil climbed 1.82% higher.
Wheat prices were mixed, as Chicago SRW fell 1.78%, while both Kansas City HRW and Minneapolis spring wheat eased 0.13%.
The Pro Farmer crop tour pegged the average US corn yield at 172 bushels/Acre, lower than USDA’s 175.1 bushels/acre. US corn production was seen slightly below 15 billion bushels (USDA 15.1 billion bushels).
The average soybean yield was seen at 49.7 bushels/acre, with production at 4.11 billion bushels (USDA 50.9 bushels/acre, production at 4.21 billion bushels).
US private exporters reported sales of 120,000 tonnes of soybeans to China during the 2023-24 marketing year.
In this context …
Corn basis bids were steady to mixed across the central U.S., after trending as much as 5 cents higher at an Indiana ethanol plant and as much as 10 cents lower at another Indiana ethanol plant.
Soybean basis bids held steady across the central U.S..
Wheat basis ended the week up or relatively unchanged in the Gulf and PNW with the exception of SW still trending down. The Great Lakes region held flat.
Commodity funds sold 500 lots of corn, 2,500 lots of wheat and bought 3,500 lots of soybeans.
For the week, corn had an up and down week, but ended on a weaker note, with September down 1.83%.
Soybeans continued their climb, as September was up 1.34%.
The product values flipped spots, as Sep soymeal was 4.68% higher and bean oil was 2.28% lower.
The wheat complex continues to slip lower.
MPLS led the bear charge this week with the front month 3.36% lower.
Chicago ended the week with September 3.26% lower.
While Kansas City was the exception with September up 0.07%.
After the sessions close, CFTC data showed large speculators increased their net short position in Chicago corn and wheat in the week to Aug. 22 while raising their long position in soybeans.
This morning, Chicago soybeans rose 1.5% to a one-month high.
Wheat and corn also rose.
Common wheat deliveries into the handling system were at 370k mt, and durum at 57.6k mt, in week 3 of this shipping season.
Canadian wheat exports for shipping week three came in at 278.4k mt, for a three-week (YTD) total of 902.6k mt.
Durum wheat exports for week three were at 35.7k mt, for a three-week (YTD) total of 102,8k mt.
Commercial stocks stood at 2.023,4k mt for common wheat, and at 254k mt for durum.
Brazil could set a new soybean production record of around 160 million metric tons in the 2023/24 cycle.
Argentina’s soybean output could almost double.
The euro reached a two-month low, against the dollar.
French farm office FranceAgriMer reported that 82% of the country’s current corn crop is rated in good-to-excellent condition through August 21. 100% of the country’s soft wheat crop has been harvested through August 21, the office said.
Germany’s grain harvest will fall after suffering from unfavourable weather, but overall harvest volumes were satisfactory, the ministry said.
Poland, Bulgaria, Hungary, Romania and Slovakia – want to extend their current ban on Ukrainian grain imports until at least the end of 2023.
Poland’s export surplus of milling wheat will be only around 3 million tons.
Polish export prices for 12.5% protein wheat were stable this week at around 1,025 zloty (229.3 euros) a ton for August/September delivery to ports.
Egypt’s supply ministry denied rumours of replacing subsidized bread with flour.
Egypt’s strategic reserves of vegetable oils are sufficient for 6.7 months of local consumption.
Ukraine’s grain exports stood at 4.2 million metric tons in the 2023/24 July-June season as of Aug. 28, of which 1.88 MMT between Aug. 1-28.
A Russian trade delegation visited the Alexandria Chamber of Commerce on Sunday to discuss ways of cooperation with Egyptian counterparts in various fields.
The export duty on sunflower oil in the Russian Federation will remain zero for the fourth month in a row.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange gained 2.11%, and 2.38% for the week.
It was another dry week for the northern half of NSW and Qld. WA and and the Eyre Peninsula also had a dry week. Southern NSW, Vic and eastern SA received patchy rains.
Leading South Korean animal feed group Nonghyup Feed Inc. (NOFI) purchased around 55,000 metric tons of animal feed wheat in a private deal on Friday without issuing an international tender.
Egypt’s state grains buyer is believed to have held direct talks with trading houses on Friday about buying wheat without issuing an international tender but no purchase was reported.
For the week, Brent declined less than 1% and WTI lost about 2%.
This morning, oil prices ticked higher after China took steps to support its flagging economy, though investors remained worried about the pace of growth as well as further U.S. interest rate hikes that could dampen fuel demand.
The main index, indeed, fell 12.7% for the week.
Wall Street recorded its first winning week since July.
The S&P 500 and Nasdaq ended higher for the week, with the Nasdaq rising about 2.3% and ending a three-week streak of losses.
The market rose in the run up to Nvidia’s second-quarter results Wednesday.
This morning Asian shares were mostly higher, as investors were relieved by the head of the Federal Reserve indicating it will “proceed carefully” on interest rates.
Japan’s benchmark Nikkei 225 added 1.8% in afternoon trading to 32,195.91. Australia’s S&P/ASX 200 gained 0.6% to 7,159.80, after data on Australian retail sales showed they rose a higher than expected 0.5%.
South Korea’s Kospi rose 0.8% to 2,538.67.
Hong Kong’s Hang Seng jumped 1.3% to 18,182.87, while the Shanghai Composite surged 1.3% to 3,104.27.
This morning, the U.S. dollar fell to 146.38 Japanese yen from 146.40 yen. The euro cost $1.0819, up from $1.0798.