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Main Markets

United States of America
US farm markets flipped red on Friday. Corn prices fell 2.35%. Soybeans dropped 1.42%. Soymeal prices ended with 1.32% losses, and soy oil settled 0.65% lower. The wheat markets also fell, as Chicago SRW lost 1.29%, Kansas City HRW was down by 3.02%, and Minneapolis HRS shaded 1.19%. Corn and soybean prices fell, as beneficial rains came across the Midwest farm belt. Also, normal to above-normal precipitation was forecast for the central and southern Midwest in the six- to 15-day period, while the northwest corner of the region was seen remaining largely dry, according to Commodity Weather Group. Wheat prices slipped, as peak wheat harvest season is underway across the Northern Hemisphere and despite some of the production issues at play in the U.S., there is already reason to expect a larger global wheat crop this year. For the week, Sep corn contract after hitting the lowest point in 2-1/2 years at midweek, was 0.27% lower, from a week earlier. Soybeans, which had notched a four-month high on Monday, ended down 0.99% for the week. Meal was the bear of the complex, with a 2.68% drop. Bean oil extended last week’s strength, rising 1.41%. Chicago SRW wheat contract, was down 0.23% for the week. Kansas City HRW, in contrast, clawed back another 2.28% on the week. Minneapolis HRS was back up 3.76% for the week. On Monday, weekly crop progress report showed corn condition ratings were up 1% as of Sunday 2, Jul to 51% gd/ex. As for soybeans, data showed a 1% decline in US soybean ratings to 50% gd/ex. Spring wheat conditions were down 2% to 48% gd/ex. Meantime, the winter wheat harvest was running behind schedule, at 37% complete by 7/2 vs. the 46% average pace. Rains across parts of KS/OK/TX likely continued slowing progress. Condition ratings still were unch at 40% gd/ex, however. The monthly Grain Crushing data had 437.54 mbu of corn used for ethanol production in May. That was a 2.03% drop vs the previous year. That set the season’s total at 3.835 bbu, or 73% of the forecast with Q4 remaining. As for soybean, NASS reported crushers processed 189.28 mbu in May. That was a record for the month and up 4.6% from May ’22. The season’s crush reached 1.683 bbu through May, also a record, and is at 75.8% of USDA’s forecast with 3 months remaining. The Fats and Oils report also had 4.183m tons of soymeal production and 2.228b lbs of oil output for the month. Soymeal stocks, at 388.7k tons, were down 25% for the month. Soy oil stocks were shown as 2.836b lbs. Delayed data from EIA showed on Thursday that ethanol producers averaged 1.06 million barrels of output per day during the week that ended 6/30. That was a 30-week high and the 6th consecutive week >1m bpd. Ethanol stocks were 22.26 million barrels, 719k tighter wk/wk. Census data showed 6.09 MMT of corn was exported during the month of May. That was a 15.6% drop from May last year, and a 3-year low for the month. As for soybean, Census confirmed 986k MT of soybeans were shipped during May. That was a sharp drop from the 2.45 MMT exported last year. The official total was 50.476 MMT through May. That is 92% of USDA’s forecasted total. The month’s soymeal export was 1.08 MMT, for a total 9.08 MMT through May. Census confirmed 22,777 MT of soy oil was shipped. That left the full year total at 111,672 MT. The official May export total for wheat was 1.417 MMT according to Census data. That was a 4.6% increase yr/yr and left the full season total at 20.98 MMT. Finally, weekly export sales data on Friday saw corn bookings picking up in the week that ended on 6/29 to 251,700 MT. New crop bookings were the third largest this MY at 418,000 MT, which left forward sales at 3.6 MMT. That is still half the volume coming into this season. Export commitments are still just 89% complete vs. the 5-year average of 101%. As for soybean, the report showed 187.8k MT of old crop beans were sold during the week that ended 6/29. That was down from 227k MT last week and a 5-week low. Total commitments were at 52.522 MMT as of 6/29. New crop business was shown at 592,831 MT, which left the new crop book at 3.944 MMT. As for the products, the report had soymeal sales at 181,755 MT for the week that ended 6/29 – split 149k for 22/23 and 33k for 23/24. The current marketing year sales were near the top end of estimates and left total commitments at 11.744 MMT, or 4.2% ahead of last year’s pace. Soy oil sales came in at 6,269 MT of net cancelations led by Mexico. As for wheat, the report indicated 23/24 wheat bookings bursting to 405,800 MT during the week that ended on June 29. That left the total commitments at 4.621 MMT for the or 24% below the same week last year, and is 22% of the USDA full year export projection, vs. the 30% average pace. Additionally, the USDA on Friday confirmed that Mexico purchased 180,000 metric tons of old- and new-crop U.S. corn. In this context, wheat basis ended the week mixed across classes and export regions. HRS basis was steady in the Gulf and down in the Pacific Northwest (PNW). Traders indicated the futures rally incentivized farmer participation but the holiday tempered sales. HRW was steady in the Gulf and the PNW, indicating that the basis may have finally hit bottom after several weeks of decline. SRW basis was up following several weeks of elevated futures prices, though overall prices are down from the previous week’s highs. Likewise, SW prices were down in search of demand. As a result, as for July 6, 2023, FOB prices for US wheat No 2 Hard Red Winter (HRW) were at $345/mt, up $16/mt week on week. US wheat No 2 Soft Red Winter (SRW) was valued at $256/mt, down $4/mt from prior week. Northern Durum offers from the Great Lakes, for June 2023 delivery were at $9.93/bu ($365.00/mt, UNCH), unchanged. As for corn, US corn 3YC (Gulf) was at $244/mt, down $5/mt. As for soybean, US soybean 2Y (Gulf) quoted at $585/mt, up $14/mt. USDA’s weekly National Ethanol report showed ethanol quotes were 3-21c weaker through the week to $2.26-$2.40/gal regionally. The DDGS market was mixed for the week with quotes as low as $175 and as high as $235/ton regionally. Corn oil was up between 1 and 5 cents, from 54 to 66 cents/lb. USDA reported the B100 cash price unchanged to $5.05/gal in MN and unchanged at $6.07/gal in IL for the week. After the sessions close, CFTC’s weekly CoT report had managed money closing 25k longs and adding 46k new shorts during the week that ended 7/3. That flipped their net position back to 18,209 contracts net short. Commercials took the opposite approach with fewer short hedges in place and 33k new long hedges for a net 209,491 contract net short. As for soybean, the report had soybean spec traders with an 89,142 contract net long as of 7/3. That was a 10.3k contract reduction from the week. Commercial soybean hedgers lightened up their position by 23k contracts to 147.5k net short. Managed money firms were shown 52,821 contracts net long in soymeal as of Monday. That was a 6k contract lighter net long via long liquidation. In soy oil, spec traders had added new longs for a 42k contract net long. As for wheat, the report showed the funds were adding another 1,838 contracts back to their net short in SRW through the week that ended 7/3. That left the group 54,006 contracts net short. KC wheat spec traders were shown with a 33,555 contract net long after some light short covering. CFTC data confirmed long liquidation in MGE wheat from the managed money firms. That left the group at a net long of 1,992 contracts. On this morning, Chicago corn and soybean prices ticked higher, although gains were limited due to expectations of further rains in the U.S. Midwest. Wheat prices slid for a third consecutive session to a one-week low due to ample supplies from newly harvested Russian crop. Notably, the most-active corn contract on the Chicago Board of Trade (CBOT) was up 0.1% at $4.95 a bushel as of 02:59 GMT, while soybeans was 0.3% higher at $13.21-1/2 a bushel. Wheat fell 0.6% to $6.45-3/4 a bushel. Meantime, traders are awaiting the monthly USDA WASDE report on Wednesday, with cuts to U.S. corn and soybean yield estimates possible.
The Alberta Crop Report for the week ending 27 June, rated spring wheat condition at 45pc good/excellent (51pc week ago, 82pc year ago), barley at 40pc (46pc week ago, 76pc year ago) and canola at 43pc (49pc, 71pc). However, in the report was also noted that scattered rains were recorded across the province, with widespread thunderstorms. The precipitation was mostly termed beneficial for crops, but flooding concerns also were noted in parts of the North West region. Moisture levels remained sub-optimal in some dry areas of the South, Central and Peace regions, but rainfall during June has improved soil moisture levels in all regions. Meantime, as of week 48, or the week ended July 2, the Canadian Grain Commission reported producers have delivered 56.5485 million metric tons (mmt) of principal field crops into the licensed handling system, up 40.8% from the previous crop year and 6.8% higher than the five-year average. By crop, the largest increases seen versus the five-year average are reported for wheat, 15% higher than the five-year average; durum, up 18.6% from average; and oats, up 14.7% from average. Flax deliveries are down 49% from average and canola deliveries are down 1.7% from average. Two crops have stand out: durum and canola. As of week 48, indeed, producers have delivered 90% of the available durum based on current official estimates from Statistics Canada, or 4.9568 mmt. Over the past five years, producers have delivered an average of 73.6% of supplies. This signals that either producers have been aggressively delivering production this crop year, or official estimates have understated ending stocks and/or production in 2021-22. A similar situation can be seen for canola, where the 16.946 mmt delivered accounts for 92% of estimated supplies available for delivery, which compares to the five-year average of 83.5%. Going inside the number, the Grain Statistics weekly report showed producers’ deliveries of common wheat at 455,5k mt in the week 48 of this shipping season. That was down from 534,4k mt posted prior week. Deliveries of durum wheat, in contrast, were stronger at 81,2k mt, compared with 78,8k mt showed in prior week. Canada exported 396,4k mt of common wheat in week 48. That was up from 357,7k mt of a week earlier. Durum wheat exports, were also stronger, moving up from 66.7k mt to 87.6k mt. Total Commercial Stocks of common wheat stood at 2.121,1k mt, down from 2.164,8k mt in the previous week. Total durum commercial stocks in contrast were higher, moving up from 273,6k mt a week earlier, to 278,1k mt. Cumulative exports for common wheat were at 18.168,2k mt. That is compared 10.404,5k mt a year ago. Durum cumulative exports reached 4.901,6k mt vs 2.345,8 a year ago. In this context, as of July 7, the 1CWAD (Canadian durum wheat with 13,5% protein) average regional price was at C$390.63/t, up C$0.14/t. Meanwhile durum wheat price –CA St Lawrence (CWAD) was offered at US$370/t FOB, up C$10/t from a week earlier. The 1 CWRS (Canadian common wheat with 13,5% protein) average regional price was at 386.57/t, up C$17.2/t. (USD/CAD = $1.3276 up from $1.3241 the prior week).
South America
Agribusiness consultancy, AgRural, in Brazil revised upwards its safrinha production forecast up by 5Mt, to 102.9Mt, reflecting favourable weather amid the progressing harvest. StoneX have also revised upward its safrinha maize crop by 3Mt, to 105.2Mt. Brazilian national agricultural agency Conab reported that as at 3 Jul, the 2022-23 first maize crop harvest was 95pc complete, and the second (safrinha) crop threshing was 20pc complete. It said fieldwork was most advanced in Mato Grosso where continued decent productivity was reported. Season 2023-24 wheat planting was 80pc complete (71pc previous year). Despite crops being generally estimated to be in good condition, high moisture levels in Rio Grande do Sul have resulted in incidences of fungal disease. It noted pest infestation in Sao Paulo amid dry weather. Meantime, Brazil’s Anec estimates that the country’s corn exports will reach 6.34 MMT in July, which would be a 12.6% year-over-year increase, if realized. The country’s safrinha (second) corn crop is now 20% harvested, versus 9% a week ago. Anec also estimates that the country’s soybean exports will reach 9,44 MMT in July, which would be a year-over-year increase of nearly 35%, if realized. Brazilian soymeal exports are likely to hold steady from year-ago results of 2.25 million metric tons, according to Anec. In Argentina, fresh rains in the south of Argentina’s agricultural region have delayed wheat sowing in the last week, the Buenos Aires grains exchange said on Thursday. Argentina is expected to plant six million hectares of the grain for the 2023/24 season. However, as of Wednesday, farmers had planted 81.4% of the estimated area for wheat, nine percentage points behind the average pace of the past five seasons, the report noted. Rainfall is also delaying the harvest of corn from the 2022/23 season, the exchange added, which could cause a hit to the 34 million metric tons currently expected to come in. Notably, farmers have harvested 51.6% of the corn planting area, though yields were severely limited by the drought. The estimated harvest is nearly 35% lower than the previous season’s 52 million metric tons. Harvesting for the 2022/23 soybean season ended last week, the exchange added, with production more than halving from the previous cycle to 21 million metric tons due to the drought. In this context, as of July 6, price for Argentina wheat Grade 2 quality, delivered Up River was at US$340/t, down $2/t from the prior week. Price for Argentina feed corn (Up River) was at US$225/t, down $5/t w.o.w.. Price for Argentina feed barley (Up River) was at US$235/t, unchanged. Price for Argentina soybean (Up River) was at US$560/t, up $3/t. Price for Brazilian feed corn (Paranagua) was at US$218/t, up $1/t. Price for Brazilian soybean (Paranagua) was at US$515/t, down $1/t.
In Europe grain and oilseed prices drifted lower on Friday due a stronger euro and harvest pressure, awaiting fresh news on Black Sea shipping corridor. Notably, Paris wheat eased 0.43% at 232 euros ($254.46) a metric ton. Wheat markets being unsettled mid-week by Moscow and Kyiv accusing each other of planning to attack the Zaporizhzhia nuclear power plant. The European Commission cut the EU common wheat production forecast by 2.7Mt, to 128.9Mt (125.7Mt previous year), durum by 0.2Mt, to 7.2Mt (7.1Mt), barley by 2.4Mt, to 49.7Mt (51.5Mt), maize by 0.4Mt, to 63.7Mt (52.1Mt), rapeseed by 0.3Mt, to 19.9Mt (19.5Mt). Sunflowerseed production was forecast higher by 0.2Mt, to 10.8Mt (9.2Mt). However, low prices for Russian and also Romanian wheat have been a bearish factor. The presidents of Ukraine and Turkey discussed on Friday the potential extension of the Black Sea grain deal. Erdogan said on Saturday he was pressing Russia to extend the grain deal, currently due to expire on July 17, by at least three months and announced a visit by Putin in August. The Kremlin said over the weekend there was no phone call scheduled and that there was no certainty about the two leaders meeting. Expected negotiations between Russian President Vladimir Putin and Turkey’s President Tayyip Erdogan remain the only hope to extend the Black Sea grain deal that is set to expire next week, Russia’s RIA news agency reported this morning. Demand, however, has been generally light, and should picking up after the Eid holidays in the Middle East and North Africa. Thus, cheap offers of Russian and Romanian wheat depressed export prospects for western EU wheat, even with uncertainty about Ukrainian sales. In 2022/23 export season, soft wheat exports from the European Union in the 2022/23 season that ended on June 30 reached 31.1 million metric tons, up 12% from the previous year, European Commission data showed on Tuesday. EU 2022/23 barley exports totalled 6.4 million tons, against 7.12 million in 2021/22, while EU 2022/23 maize imports stood at 25.8 million tons, up from 16.42 million. European Union soybean imports in the 2022/23 season that ended on June 30 reached 13.02 million metric tons. That compared with 14.54 million tons in the previous 2021/22 season. EU rapeseed imports in 2022/23 reached 7.35 million tons, compared with 5.52 million in 2021/22. Soymeal imports 2022/23 totalled 15.77 million tons against 16.52 million the prior season, while palm oil imports stood at 3.99 million tons versus 4.92 million in 2020/21. In France, harvesting will accelerate with hot weather, while farmers had harvested 10% of this year’s soft wheat crop by July 3, farm office FranceAgriMer said on Friday. That was up just 1% from the prior week. Grain handler Soufflet Agriculture said that it had seen good early wheat yields and quality, though rapeseed yields were disappointing following bumper levels last year. The condition of soft wheat in the week to July 3 was unchanged from the previous week with 81% of crops rated to be in good or excellent condition, farm office FranceAgriMer said on Friday. This year’s French soft wheat harvest is expected to show a yield 5% above the 10-year average, helped by good sowing conditions and regular rains in early spring, crop institute Arvalis and grain industry group Intercereales said on Thursday. The 2023 soft wheat yield would reach 7.5 metric tons per hectare (t/ha), up 4.5% from 7.2 t/ha last year, they said in a joint statement. Arvalis and Intercereales did not give a production forecast but their projected yield multiplied by the farm ministry’s area estimate of 4.77 million hectares would give a soft wheat crop of about 35.8 million tons. The projected protein content – a key quality requirement – in the French soft wheat crop would reach 11.4%, in line with last year and the 10-year average. On the other hand, the European Union’s maize crop is on track to rebound from last year’s disastrous harvest, although 2023 prospects have been hit by lower sowings and dry spring weather. Notably, Strategie Grains last month cut its maize crop estimate by 900,000 metric tons to 61.2 million metric tons and it plans to reduce it further to take account of the dry weather forecasts. Romania could regain its position as the largest maize producer in the EU, with Romanian consultancy AGRIColumn pegging the maize crop there at 14 million metric tons, although its founder Cezar Gheorghe said he would downsize it. The French farm ministry last month cut its grain maize sowing estimate to 1.23 million hectares, nearly 9% lower than last year’s level and 15% below the five-year average. In Germany, DBV expects Germany’s grain maize crop to fall 20% on the year to 3.58 million metric tons. In Poland, the picture was looking better, with analysts forecasting Poland’s maize crop at 7.1 million metric tons, down 8% from a record crop harvested in 2022, as farmers planted smaller acreage to corn than last year. In this context, in Germany, standard 12% protein wheat for September delivery in Hamburg was offered for sale at a premium of about 0.5 euros under the Euronext December contract, with buyers seeking about 1.5 euros under. In Poland, prices rose slightly on slow farmers’ sales and uncertainty about size and quality of the new crop. Notably, exporters’ purchase prices for 12.5% protein wheat rose 5 zloty this week to around 1,015 zloty (227 euros) a metric ton for July/August delivery to ports.
Farmers in most Ukrainian regions have threshed the first million metric tons (1.1 short tons)of the 2023 grain harvest, the agriculture ministry said on Thursday. The agriculture ministry said the harvest so far included 85,800 tons of barley, 172,000 tons of wheat and 45,800 tons of peas. Farmers have harvested 308,200 hectares of various grains and the yield averaged 3.32 tons per hectare. Meantime, Ukraine’s grain exports for the new 2023/24 season stood at 497,000 metric tons as of July 7, Agriculture Ministry data showed on Friday. The volume included 273,000 tons of corn, 177,000 tons of wheat and 46,000 tons of barley.
The Russian Grain Union has tipped 2023-24 grain production at 130-140Mt, down from around 158Mt in 2022-23, with exports (Jul/Jun) seen at around 55Mt (57Mt previous year). Russia plans to export up to 55 million metric tons of grain in the agricultural year that began this month, Agriculture Minister Dmitry Patrushev said on Friday. Patrushev said wheat made up 47 million metric tons of 2022/23’s grain exports. On this wake, Sovecon too increased its forecast of wheat exports from Russia in 2023/24 MY by 1.5 mln tonnes, to 47.2 mln tonnes. Wheat export in July 2023 will amount to 3.6-3.9 mln tonnes, against 2.5 mln tonnes a year ago and 2.8 mln tonnes on average. The forecast for the export of Russian corn in 2023/24 MY was also increased – from 4.3 mln tonnes to 4.5 mln tonnes. The barley export estimate remained at 5.2 mln tonnes. Sovecon see now total grain export in general up – from 57.2 mln tonnes to 58.9 mln tonnes. As for grain exports in 2022/23 MY, wheat export was increased by 2.2 mln tonnes, to 46.6 mln tonnes, for barley and corn – by 0.2 mln tonnes each, to 4.3 mln tonnes and 5.4 mln tonnes, respectively. The estimate of grain exports, in general, was raised from 55.7 mln tonnes to 58.3 mln tonnes. Also, carry-over stocks for the new season are at record highs, overall supply even with new crop cuts will decline marginally, infrastructure continues to expand, and shipments at the start of the new season are likely to be strong. Meantime, bid prices for Russian wheat with a 12.5% protein content in deep-sea ports have increased by 1`800 RUR/t since the beginning of June, to 15`000 RUR/t (165-168 USD/t), the highest indicator since June 2022. The growth of wheat prices was facilitated by the market situation, the reduction of export duties, the collaps of Russian ruble, and higher competition between exporters. The volume of concluded contracts for the sale of wheat by the end of June increased by 1.2 mln tonnes to 2.3 mln tonnes.
According to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture, China is expected to produce slightly more corn in 2023-24 due to improved yields and mostly favourable weather. Production is estimated at 280 million tonnes, up from 277.2 million tonnes in 2022-23. Total corn consumption in 2023-24 is forecast at 305 million tonnes, 1 million tonnes higher than the USDA’s June estimates due to higher food, seed, and industrial (FSI) utilization, the FAS said. Corn consumption in feed is forecast to increase slightly following a significant drop in 2021. Due to soaring prices, corn used in feed rations dropped from 80% to less than 40%. However, corn imports in 2023-24 are estimated at 20 million tonnes, 2 million tonnes higher than the April estimate, as China continues to feed more corn and build reserves. Wheat production in 2023-24 is expected to increase slightly to 140 million tonnes from the previous year on higher planted area, the FAS said. Imports of close to 14 million tonnes in 2022-23 are expected to exceed for the first time the 9.636 million tonne tariff rate quota from China’s World Trade Organization accession commitment. More than 40% of the imported wheat is from Australia, the FAS said. Imports for 2023-24 are expected to remain above the historical average as China’s temporary wheat reserve is projected to drop 12% year-on-year. “Most of the imported wheat is of higher quality and destined for flour production, and only a small percentage goes to feed mills,” the FAS said, noting that current prices are favourable for imports.
South East Asia
Malaysian palm oil futures fell 2% on Friday as traders awaited key palm oil board data, although the market is on course for a second weekly gain. Notably, the benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed down 78 ringgit, or 1.99%, to 3,833 ringgit ($821.47) a metric. For the week, palm gained 1.16%. The Malaysian Palm Oil Board is scheduled to release June supply-and-demand data later on Monday. Analysts forecast end-June inventories to rise 10.5% from the month before to 1.86 million metric tons due to slow exports and nearly flat output.
Australia exported 3,326,244 tonnes of wheat and durum in May, up 9 percent from the 3,046,128t shipped in April, according to the latest data from the Australian Bureau of Statistics. In containerised markets, China on 102,767t followed by The Philippines on 39,803t and Taiwan on 32,142t were the three largest buyers. In bulk markets, China on 691,664t was the biggest market, followed by Vietnam on 410,621t and Indonesia on 390,658t. According to some analysts, Australia has exported 19.5 million tonnes (Mt) of wheat since the October 1 start of the current marketing year. This compares with 15.6Mt shipped over the corresponding 2021-22 period. And likly they are well on our way to a record export program estimated at over 30Mt by the end of September 2023. Meantime wheat and barley prices have firmed in the south but traded steady to softer in the north as consumers, traders and growers process the impact of ongoing dry conditions in north-west New South Wales, and bouncing global markets. Going against expectations held by some, the July 1 start of the new financial year has not shaken significant volumes out of growers’ hands. However, another week of showers across much of south-eastern Australia has lifted grower interest in selling current-crop barley held as a drought hedge by mixed farmers especially. Thus, local markets were slightly softer going into the weekend. Trades followed the offshore theme with recent rains helping to shore up production risk. Port Kembla wheat drew a $15/t premium compared to ASX at $385/t. The much-anticipated tax selling rush has been somewhat of a blip on the radar. The current crop shorts still exist in a combination of trade and consumer. The 8-day forecast is looking a little drier which is a welcome relief for those in the southern growing region.
FAO Food Price Index – July Update
The benchmark index of international food commodity prices declined again in June, led by price decreases for all major cereals and most types of vegetable oils, according to the Food and Agriculture Organization of the United Nations (FAO). The FAO Food Price Index, which tracks monthly changes in the international prices of commonly-traded food commodities, averaged 122.3 points in June, down 1.4 percent from May and 23.4 percent from its peak in March 2022. Notably, the FAO Cereal Price Index declined 2.1 percent from May. International coarse grain quotations in June decreased by 3.4 percent, driven mostly by increased maize supplies from ongoing harvests in Argentina and Brazil and improved output prospects in key producing areas of the United States of America. International wheat prices dropped by 1.3 percent, as harvests began in the Northern Hemisphere, influenced by ample supplies and a lower export tax in the Russian Federation, along with improved conditions in the U.S. International rice prices declined by 1.2 percent amid subdued demand for non-Indica varieties and efforts by Pakistan to attract export sales. The FAO Vegetable Oil Price Index declined by 2.4 percent from May, as lower world prices of palm and sunflower oils more than offset increases in quotations for soy and rapeseed oil, influenced by weather conditions in major growing regions. The FAO Dairy Price Index declined by 0.8 percent in June, led by lower international cheese prices, even as world butter prices rose, driven by active demand for spot supplies, mainly from the Middle East. The FAO Sugar Price Index declined by 3.2 percent, its first drop after four consecutive monthly increases. The FAO Meat Price Index was virtually unchanged in June.
FAO Cereal Supply and Demand – July Update
World cereal production is predicted to hit a record high in 2023/24, according to a separate Cereal Supply and Demand brief, also released by FAO. Notably, FAO raised its 2023 global cereal production forecast to 2 819 million tonnes, indicating a 1.1 percent increase from the previous year. The higher forecast almost entirely reflects better prospects for global wheat production, now pegged at 783.3 million tonnes, buoyed by improved outlooks in several countries, including Canada, Kazakhstan and Türkiye. However, global wheat production is still seen falling below last season’s output by 2.3 percent, Global coarse grain output for the year is now forecast to grow by 2.9 percent from 2022 to 1 512 million tonnes. Likewise, world rice production in 2023/24 is expected to rise by 1.2 percent above the 2022/23 reduced level, to 523.7 million tonnes. World cereal utilization in the season ahead is expected to expand by 0.9 percent to 2 805 million tonnes, led by expected increased use of coarse grains, especially of maize for animal feed. FAO raised its forecast for world cereal stocks by the close of 2023/24 seasons to 878 million tonnes, some 2.3 percent higher from the previous season. At this level, the global cereal stocks-to-use ratio would remain unchanged at 30.6 percent, “indicating comfortable supply prospects in the new season.”


Milling wheat
Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 115,717 metric tons of food-quality wheat from United States and Canada in a regular tender that closed on Thursday.
Tunisia’s state grains agency is believed to have purchased about 100,000 tonnes of soft wheat in international tenders on Wednesday.
The grain was optional origin, but the majority of the soft wheat was expected to be sourced from Russia.
The purchase have been done in four 25,000-metric ton consignments.
Viterra was said to have sold 25,000 metric tons at an estimated $259.86 a ton c&f, and Grainflower sold 75,000 metric tons all at $260.00 a metric ton c&f.
The shipment was sought between July 20 and Aug. 25, depending on origin selected for supply.
Durum wheat
Tunisia’s state grains agency is believed to have purchased about 100,000 tonnes of durum wheat in international tenders on Wednesday.
The grains are optional origin.
The purchase have been done in four 25,000-metric ton consignments.
Viterra sold one 25,000-metric ton consignment at $418.33 a metric ton c&f.
Casillo sold one consignment at $419.68 a metric ton c&f and another at $425.89 a metric ton c&f.
Amber sold one consignment at $426.00 a metric ton c&f.
The shipment was sought between July 25 and Sept. 5, depending on origin selected for supply.
Algeria’s state grains agency OAIC is believed to have purchased durum wheat in an international tender that closed on Tuesday.
The tonnage bought was unclear but initial estimates were around or above 200,000 metric tons.
Estimated prices were at about $385 to $387 a metric ton c&f for larger Panamax shipments and about $390 to $400 a ton c&f for smaller handymax shipments.
The grain was technically optional origin but durum from Mexico was a substantial part of the purchase, though the purchase also included Canadian durum.
Shipment was sought in four periods: Aug. 1-15, Aug. 16-31, Sept. 1-15 and Sept. 16-30.


Energy Markets
Oil prices climbed about 3% to a nine-week high on Friday. Notably, Brent futures rose $1.95, or 2.6%, to settle at $78.47 a barrel, while U.S. West Texas Intermediate crude (WTI) rose $2.06, or 2.9%, to settle at $73.86. That was the highest close for Brent since May 1 and WTI since May 24. Both benchmarks ended up about 5% for the week. The rally over the last week has backed by fresh cuts from Saudi Arabia and Russia bringing total reductions by OPEC+ to around 5 million barrels per day (bpd), or about 5% of global oil demand. Oil analytics firm Vortexa said there are currently 10.5 million barrels of Saudi crude in floating storage off the Egyptian Red Sea port of Ain Sukhna, down by almost half from mid-June. U.S. oil rigs fell by five to 540 last week, the lowest since April 2022, according to a Baker Hughes report on Friday. In Norway, Equinor ASA paused production at its Oseberg East oil field in the North Sea due to staffing shortages. In Mexico, six people were injured after a fire broke out on Friday morning at an offshore platform run by state oil company Pemex in the Gulf of Mexico. Also supporting crude prices, the U.S. dollar which fell to a two-week low. Meantime, money managers raised their net long U.S. crude futures and options positions in the week to July 3, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. On this morning, oil prices dipped in Asian trade, as investors tread cautiously ahead of fresh economic data from top consumers the United States and China this week. Brent crude futures indeed fell 55 cents, or 0.7%, to $77.92 a barrel by 06:30 GMT, and U.S. West Texas Intermediate crude was at $73.31 a barrel, also down 55 cents, or 0.7%.
Ocean Freight Markets
The Baltic Exchange’s main sea freight index rose on Friday, but clocked a second consecutive weekly decline on the back of weaker demand in the larger vessel segments. The overall index, indeed, gained 16 points, or 1.6%, to 1,009. However, the main index fell by 7.5% for the week. Notably, the capesize index gained 43 points, or 2.9%, to 1,522, but shed 10.7% this week, also a second straight weekly retreat. Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, increased $360 to $12,625. The panamax index rose 13 points, or 1.3%, to 984. But the index dropped 4.5% for the week, a third straight weekly decline. Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, increased $116 to $8,852. Among smaller vessels, the supramax index fell 4 points, or 0.55% to 724.
Equity Markets
US stock indexes ended lower on Friday in a seesaw session, as investors digested a U.S. jobs report that showed weaker-than-expected growth and awaited more economic data and corporate earnings in the weeks ahead. Notably, U.S. Jun nonfarm payrolls rose +209,000, weaker than expectations of +230,000 and the smallest increase in 2-1/2 years. Also, May nonfarm payrolls were revised lower to +306,000 from the initially reported +339,000. The Jun unemployment rate fell -0.1 to 3.6%, right on expectations. U.S. Jun average hourly earnings rose +0.4% m/m and +4.4% y/y, stronger than expectations of +0.3% m/m and +4.2% y/y. That could keep the Federal Reserve on the course it’s been hinting at recently: perhaps two more increases this year before the Fed holds rates at a high level to ensure inflation returns to its 2% target. The wide assumption on Wall Street is the Fed will hike rates at its next meeting in three weeks. As a result, Treasury yields were mixed following the much anticipated jobs data. The 10-year Treasury yield rose to 4.05% from 4.03% late Thursday. It helps set rates for mortgages and other important loans. The two-year yield, which moves more on expectations for the Fed, fell to 4.94% from 5.00%. Meantime, the S&P 500 lost 12.64 points, or 0.3%, to 4,398.95, though slightly more stocks within the index rose than fell. The Dow Jones Industrial Average gave up 187.38, or 0.6%, to 33,734.88, and the Nasdaq composite edged down by 18.33, or 0.1%, to 13,660.72. For the week, the S&P 500 fell about 1.2%, the Dow slid roughly 2% and the Nasdaq dropped 0.9%. Limiting losses, stocks in the energy industry were stronger as the price of oil rallied. Oilfield services provider Schlumberger jumped 8.6%, Halliburton climbed 7.8% and Marathon Oil rose 4.3%. The higher crude prices also helped stocks of solar companies, with First Solar shares gaining 3.3%. On this morning, Asian shares got the week off to a slow start, with mixed trading as China reported wholesale prices fell in June, amid other signs the economy is slowing. Benchmarks rose in Hong Kong, Shanghai and Mumbai but fell in Tokyo and Sydney. The decline in producer prices by 5.4% in June from a 4.6% drop in May suggests a further weakening of demand in many industries. China’s economy has slowed faster than hoped. However, markets in China tend to react positively to signs of weakness in anticipation of possible stimulus measures that might make more money available for investing in shares. Thus, Hong Kong’s Hang Seng gained 0.5% to 18,460.02 and the Shanghai Composite index edged 0.2% higher to 3,203.13. Tokyo’s Nikkei 225 slipped 0.6% to 32,189.73, while the Kospi in Seoul shed 0.2% to 2,520.70. Australia’s S&P/ASX 200 declined 0.5% to 7,004.00. India’s Sensex edged 0.2% higher, while the SET in Bangkok also advanced 0.2%. As expected, U.S. Treasury Secretary Janet Yellen wrapped up a fence-mending visit to Beijing with no major agreements or breakthroughs in strained ties. But Yellen said relations were on a “surer footing,” and the two sides would continue to talk despite disputes over many issues including access to advanced technologies, Chinese territorial ambitions and allegations of human rights abuses.
Currency Markets
The dollar index fell by -0.89% and posted a 2-week low, on weaker-than-expected U.S. Jun nonfarm payrolls report, and signs of wage pressures in Japan, which may prompt the BOJ to adjust its easy policy stance soon. Notably, the EUR/USD rose +0.73% and posted a 1-1/2 week high, also moving higher on hawkish comments from ECB President Lagarde. However, gains for the euro were limited after German May industrial production fell -0.2% m/m, weaker than expectations of no change. As for the USD/JPY in fell -1.35%, with the yen rallying to a 2-week high against the dollar, despite Friday’s Japanese economic news was mixed for the yen. On the positive side, the May leading index CI unexpectedly rose +1.4 to a 6-month high of 109.5, stronger than expectations of a decline to 97.6. Also, May labor cash earnings rose +2.5% y/y, stronger than expectations of +1.2% y/y and the largest increase in 5 months. On the negative side, May household spending fell -4.0% y/y, weaker than expectations of -2.5% y/y. On this morning, the U.S. dollar rose to 142.42 Japanese yen from 142.17 yen. The euro slipped to $1.0951 from $1.0967.
Watching this week’s market …
On Monday, we get the Weekly Export Inspections report in the afternoon and Crop Progress report overnight, after the sessions close.
The weekly EIA showing ethanol production and stocks will be out on Wednesday.
Wednesday is also USDA Crop Production and WASDE report day, with the report release in the afternoon.
Thursday will be the release of the weekly Export Sales report.

That’s all, thank you.
We wish you a nice day.

Author: Sandro F. Puglisi

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