GRAIN MARKET VIEW
August 9, 2023 – Market Focus
Good morning, Farmer Family …
Main Markets
USA
US farm markets were mixed on Tuesday.
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.
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.
Canada
Rain in the Canadian Parries last week was largely confined to the northern regions.
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.
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.
South America
Brazil
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%.
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%.
Europe
The euro returned below 1.10 against the dollar.
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.
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.
Ukraine
Ukraine’s grain exports have reached 2.76 million metric tons so far in the 2023/24 July-June season official data showed.
Russia
Russian consultancy IKAR has revised up their 2023-24 grain production forecast by 2.5Mt, to 137.0Mt (157.7Mt previous year).
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.
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.
China
China tipped into deflation, and factory-gate prices extended declines in July, as efforts to stoke recovery faltered.
Southeast Asia
Indian wheat prices surged to a six-month high, on limited supplies and robust demand ahead of the festival season.
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.
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.
Australia
Australia’s largest bulk grain exporter, CBH Group, has been cleared to resume barley shipments to China.
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.
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.
Auctions
Corn
South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 140,000 metric tons of animal feed corn.
Milling wheat
Japan issued a regular tender to purchase 95,000t of food-quality wheat from the United States and Canada that closes on Thursday.
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.
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.
Macroeconomics
Energy markets
Oil prices edged up, in spite bearish China’s crude import and export data, on higher US economic growth outlook.
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%.
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%.
Ocean freight markets
The Baltic Exchange’s main sea freight index in London inched down 3 points snapping a three-session winning streak, on weaker capesize rates.
Equity markets
On Wall Street, US stock indexes closed lower.
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.
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.
Currency trading
The dollar index gained 0.47% as US stocks slumped, boosting liquidity demand for the dollar, and the yuan slide to a 2-1/2 week low against the dollar on weaker-than-expected Chinese trade news.
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.
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.
