GRAIN MARKET VIEW
August 9, 2023 – Market Focus
Good morning, Farmer Family …
Corn prices moved 0.73% higher, after posting losses in nine of the previous 10 sessions.
Soybeans rose 0.39%, after sinking on Monday to its lowest level since June 30.
Soymeal and soyoil prices lost 0.21% and 0.16% respectively.
Chicago SRW eased 0.19% lower, while Kansas City HRW picked up 0.10%, and Minneapolis spring wheat grabbed 0.79% gains.
Soybean and corn prices edged higher, recovering from early weakness as investors covered short positions ahead of a key U.S. government crop outlook on Friday, with analyst estimates tipping the US corn yield to decline to 175.5 bushels per acre, down from USDA’s 177.5 bpa July estimate, and soybean yields also expected to be lowered to 51.3 bpa, down from 52.0 bpa in July.
Chicago wheat prices dipped, on concerns about weak demand for U.S. supplies, while analysts expect USDA to raise wheat output by 3.6 mbu on average.
Spring wheat prices tracked moderately higher as crop quality ratings continued to spill lower.
Uncertainties over the Black Sea, coupled with firm prices in India, are providing some support for the US soft wheat market.
Corn basis bids were steady to firm, after rising 15 cents higher at a Nebraska processor and improving 1 to 2 cents at two other Midwestern locations.
Soybean basis bids held steady across the central U.S..
Commodity funds were net buyers of CBOT corn, soybean, soymeal and soyoil futures contracts, and net sellers of wheat futures.
This morning, Chicago corn and soybeans gained more ground, with investors covering short positions ahead of a key U.S. government crop outlook, although forecasts of cool and wet weather curbed gains.
Wheat slid as dismal demand for U.S. supplies kept a lid on prices.
Wheat harvest began in the central region of Manitoba, with some initial yields in the 35-40 bushels per acre range.
Canadian wheat exports in the final week of the shipping season were large at 506.5k mt for a season total of 19.7 million mt.
Durum exports were at 90.2k mt for a season total of 5.1 million mt.
Brazil’s Conab reported that as at 5 August the 2022-23 first maize harvest was virtually complete and second (safrinha) harvest was 64pc complete.
Brazil corn crop exceeds expectations.
The 2023-24 wheat harvest was 3pc complete.
Brazil’s Anec estimates corn shipments at 9.8 MMT for August.
Anec estimates that the country’s soybean exports will reach 8.8 MMT in August, while soymeal exports will reach 2.2 million metric tons this month.
Brazil’s Safras&Mercado reported 76% of the 22/23 soybean crop has been sold, while sales for 23/24 delivery were marked at 14%.
Volatility is the name of this wheat market as prices on Euronext’s December contract touched a low of €245/t, and by the end of the session had closed at €253.50/t, near the session high.
There were less movements in corn and rapeseed markets.
EU soft wheat exports during the 2023/24 marketing year have reached 2.92 MMT through August 6, which is trending 16% below last year’s pace so far.
EU barley exports is down 58% over the same period.
Durum imports at 114,577t are noticeably higher a year ago so far (+1085%), but still lower from 232,090t imported at the same period in 2021 season.
Corn imports had a year-over-year decline of 33% so far.
Soybean imports are down 20% from year-ago volumes so far.
EU soymeal imports are trending 16% lower year-over-year.
EU rapeseed imports are 66% lower than a year earlier.
Palm oil imports are 7% lower than a year earlier.
Incorrect: [“Starting November, Russia will switch to payments in rubles when exporting agricultural products.”]
Correct: “Starting November, a govt decree established a trade mechanism that allows opening special bank accounts by authorized banks to foreign buyers from friendly countries, with a simplified procedure, to support export transactions of Russian grain and other ag products with settlements in ₽₽₽ through Russian Commodity Exchanges”.
Weekly Russian grain exports decreased for the first time in six months.
India set to cut wheat import duty 15%, allow shipments into southern ports.
Malaysian palm oil prices ticked up after two straight sessions of sharp losses.
According to ABS data Australia exported 329kt of canola in June, down 35pc from May.
Local markets continued to firm yesterday, with the lower AUD assisting new crop bids.
Egypt’s state grains buyer GASC, bought 235,000 metric tons of Russian wheat in an international tender. The lowest free-on-board offer presented was at $262 per metric ton.
Brent crude futures indeed gained 83 cents to settle at $86.17 a barrel. U.S. West Texas Intermediate crude rose 98 cents to $82.92.
Both contracts had fallen by $2 earlier in the session.
However, oil prices eased on Wednesday as concerns over slow demand from China grew after bearish trade and inflation data.
Thus, Brent crude futures fell 21 cents, or 0.2%, to $85.96 a barrel by 06:15 GMT.
U.S. West Texas Intermediate (WTI) crude was at $82.71 a barrel, down 21 cents, or 0.2%.
Moody’s Investors Service cut ratings for ten small and midsize U.S. banks and adopted a “negative” outlook for 11 other lenders.
Concern about the global economy increased after news that China’s exports and imports in July fell more than expected.
Thus, the S&P 500 fell 19.06, or 0.4%, to 4,499.38. It was the fifth loss in the last six days for the index.
The Dow Jones Industrial Average fell 158.64, or 0.4%, to 35,314.49.
The Nasdaq composite lost 110.07, or 0.8%, to 13,884.32.
This morning, Asian stock markets mostly fell.
Notably, Japan’s benchmark Nikkei 225 lost 0.5% to 32,232.60.
Australia’s S&P/ASX 200 edged up 0.3% to 7,329.10.
South Korea’s Kospi added 1.3% to 2,606.84.
Hong Kong’s Hang Seng dropped 0.3% to 19,134.00, while the Shanghai Composite shed 0.4% to 3,247.91.
The EUR/USD fell by -0.39%, and the USD/JPY rose by +0.62%.
This morning, the U.S. dollar fell to 143.13 Japanese yen from 143.36 yen.
The euro cost $1.0979, up from $1.0960.