US farm markets were mixed, but mostly lower on Friday.
Corn prices spilled more than 1.9% lower.
Soybean prices managed modest gains, up 0.40%, with soymeal shifting 0.52% higher, while soyoil jumped 2.6% higher.
Wheat prices were slashed, as Chicago SRW lost 4.06%, while both Kansas City HRW and Minneapolis HRS dropped by 1.66%.
Currently, 50% of the soybean crop and 55% of the corn crop is in areas affected by drought.
However, some rainfall on the Midwest and Plains between Saturday and Sunday came.
Seasonally wet weather could return to the eastern Corn Belt between July 28 and August 3, though with sharply warmer-than-normal temperatures likely for the entire central U.S. .
That was enough for corn and soybean traders to engage in some more technical selling and profit-taking.
Wheat prices dropped, with traders locking in profits from a rally sparked by escalations in the Russia-Ukraine war that raised the prospects of export disruptions from the two key global suppliers, as there has certainly been a lot of panicking on global markets, but now people are looking at numbers again.
And if you look at Russia’s large crop and the good harvests in France and elsewhere in the EU, it doesn’t seem like there is going to be a wheat shortage problem,.
In this context, commodity funds sold 11,000 lots of wheat, 7,500 lots of corn and 1,000 lots of soybeans.
For the week, corn prices rose 4.04%.
Soybeans joined the bulls, up 1.39%.
New crop November was a little more aggressive, with 2.26% gains.
The products provided excellent support, with soymeal up 4.48% and bean oil closing 6.69% higher.
Mid-week gains across the wheat complex pushed things higher for the week.
Chicago SRW was the leader with 5.44% weekly gains.
Kansas City followed suit, with a 3.77% rally, and Minneapolis spring wheat the weaker, with only 0.3% gains on the week.
Weekly Crop Progress data on Monday showed corn condition ratings were up another 2% to 57% gd/ex.
Soybean ratings improved 4% to 51% gd/ex.
Spring wheat also improved 4% to 51% gd/ex.
Winter wheat harvest still running late, at 56% complete by 7/16 vs. the 69% average pace.
On Wednesday, Weekly EIA data indicated a 38,000 barrel/day jump in production to 1.07 million bpd during the week of July 14.
However, stocks were up another 508,000 barrels to 23.166 million.
On Thursday, Export Sales data showed another disappointing sales week as of 7/13, with just 236,809 MT in old corn crop bookings.
New corn crop bookings improved to 491,595 MT.
Export commitments are now 95% of the USDA forecast, compared to the 5-year average of 102%.
Actual shipments are a little better at 86% of the estimate, 3% behind the average pace.
As for soybean, the report indicated old crop bean bookings improving slightly to 127,047 MT.
New crop sales pushed to a MY high of 760,275 MT.
Commitments for old crop are 98% of the USDA forecast, compared to the 5-year average pace at 103%.
As for wheat, the report indicated wheat bookings dropping to just 170,658 MT during the week of July 13.
Export commitments are 5.195 MMT, 26% of the USDA full year export projection, vs. the 35% average pace.
In this context, corn basis bids were mostly steady across the central U.S., but did slide 5 cents lower at an Illinois river terminal.
Soybean basis bids were steady to soft after fading 5 to 30 cents lower across four Midwestern locations.
As for wheat, basis ended the week mixed across classes and export regions.
HRS basis was down in the Gulf and steady in the Pacific Northwest (PNW).
Traders indicated an increase in upcountry sales, as farmers cleared their bins for the upcoming harvest.
But export activity remains light.
HRW was steady in the Gulf and continues downward in the PNW, as Montana’s production outlook remains strong.
SRW basis was up, and SW prices increased due to the unpredictability in the Chicago market.
As a result, as of July 20, 2023, FOB prices for US wheat No 2 Hard Red Winter (HRW) were at $358/mt, up $28/mt week on week.
US wheat No 2 Soft Red Winter (SRW) was valued at $278/mt, up $31/mt from prior week.
Northern Durum offers from the Great Lakes, for August 2023 delivery were at $10.89/bu ($400.00/mt, unchanged), unch.
As for corn, US corn 3YC (Gulf) was at $242/mt, down $13/mt.
As for soybean, US soybean 2Y (Gulf) quoted at $584/mt, up $2/mt.
USDA’s weekly Ethanol report showed cash prices were quoted $2.30 to $2.50 regionally, which was mostly 10 to 20c per gallon stronger for the week.
Cash DDGS prices were mostly higher, but varied regionally from +/- $15 of last week from $190 to $215/ton.
The corn oil market was mostly 1 to 7 cents stronger from 59 to 67 cents/lb regionally.
USDA quoted the B100 cash price at $5.66 in MN and $5.72 in IL for the week.
After the sessions close, CFTC reported major short covering from managed money on corn contract during the week that ended 7/18.
There was also some minor long liquidation, but the short covering reduced their net short by 16k contracts to 47k contracts.
The commercials extended coverage through the week, with an additional 43k contracts and a 13k contract stronger net short of 173,849 contracts.
As for soybean, the report had managed money funds as net buyers for the week that ended 7/18.
That extended their net long by 13k contracts to 95.8k.
The commercials extended their net short by 7.8k contracts to 154k contracts.
In soymeal, the funds were 6k contracts more net long at 58,949 as of 7/18.
In bean oil the spec traders were 4.6k contracts less net long at 44,914 contracts.
As for wheat, the report showed the managed money funds were pushing the short side of SRW wheat futures.
The 3.3k new shorts left the group with a 54,418 contract net short as of 7/18.
In KC wheat, managed money was shown 12,650 contracts net long after adding 4.8k new shorts.
Spring wheat spec traders were 2,354 contracts more net long through the week at 6,587 contracts.
On this morning, Chicago wheat and corn prices rose.
Soybeans rose for the first time in three sessions.
Notably, the most-active wheat contract on the Chicago Board of Trade climbed 1.3% to $7.06-3/4 a bushel, as of 00:34 GMT, and corn rose 1.6% to $5.44-3/4 a bushel.
Soybeans added 0.8% to $14.13-1/4 a bushel.
Cargo movement in the Black Sea region is getting restricted, and buyers are worried about supplies.
The looking to pick up grain cargoes from the Black Sea area has fallen 35% past week versus the previous week due growing uncertainty over whether commercial traffic could be hit.
Another warm week has helped crops maintain the rapid rate of development seen throughout the year.
In Saskatchewan, sixty-one per cent of fall cereals are at normal stages of development for this time of year, while 35 per cent are ahead.
Fifty-five per cent of spring cereals are at normal stages of development, while 37 per cent are ahead of normal stages of development.
Oilseeds are 58 per cent are at normal stages while 33 per cent are ahead of normal stages.
Pulses have advanced slightly this week and are now 35 per cent ahead of normal stages of development for this time of year, while 61 per cent are at normal stages of development.
In Manitoba, winter cereal crops continued to dry down over last week and producers were preparing for pre-harvest herbicide applications.
Harvest could begin in ten days or less in some areas if weather is conducive to drydown.
Spring cereals ranged from the late milk to the dough stage with the exception of very late seeded crops that were ending flowering.
Overall, cereal crops remain in fair to mostly good condition.
Corn growth stage ranged from tassel emergence to early silk for the earliest seeded fields.
The crop remained in good to excellent condition and demonstrated rapid growth in the warm weather.
The spring wheat crop is rated mostly fair to good.
No change from previous week.
Meantime, as of week 50 the Canadian Grain Commission in its Grain Statistics Weekly showed producers’ deliveries of common wheat were at 389,8k mt.
That was up from 310,4k mt posted prior week.
Deliveries of durum wheat, in contrast, were weaker at 42,3k mt, compared with 59,2k mt showed in prior week.
Canada exported 408,3k mt of common wheat in week 50.
That was up from 335,7k mt of a week earlier.
Durum wheat exports, moved up from 23.0k mt to 43.3k mt.
Total Commercial Stocks of common wheat stood at 2.064,1k mt, slightly down from 2.118,7k mt in the previous week.
Total durum commercial stocks in contrast were higher, moving up from 299,4k mt a week earlier, to 309,6k mt.
Cumulative exports for common wheat were at 18.912,3k mt.
That is compared 10.704,2k mt a year ago.
Durum cumulative exports reached 4.967,9k mt vs 2.491,3 a year ago.
Canadian wheat ending stocks for both the current marketing year and 2023/24 (Aug/Jul) were revised lower by Agriculture and Agri-Food Canada’s market analysis division in its updated supply/demand estimates, released July 21, with tighter oats and pulse stocks also expected.
Notably, wheat ending stocks (excluded durum) for 2022/23 were lowered to 3.540 million tonnes by AAFC, from an estimated 3.980 million tonnes in June.
The new crop wheat carryout was cut by 700,000 tonnes, to 5.100 million.
Wheat production for 2023/24 was pegged at 35.331 million tonnes, down from 35.751 in June but still well above the 33.824 million tonnes grown in 2022/23.
Durum ending stocks for 2022/23 were lowered to 0.290 mmt.
The new crop durum carryout was cut by 0.300 mmt to 0.500 million.
Durum production for 2023/24 was pegged at 5.695 mmt, down from 5.821 in June, but still above the 5.443 mmt grown in 2022/23.
The oats carryout for 2023/24 was another notable adjustment, dropping to only 450,000 tonnes, from an estimated 1.000 million in June and the current marketing year target of 1.250 million tonnes. Total Canadian oats production was forecast at only 2.816 million tonnes in 2023/24, an 800,000 tonne drop from the June estimate and below the 5.226 million tonnes grown in 2022/23.
Canola production for 2023/24 was raised to 18.800 million tonnes, from 18.400 million in June.
However, ending stocks were left unchanged at the relatively tight levels of 650,000 tonnes for the current crop year and 600,000 tonnes in 2023/24.
New crop production estimate for both peas and lentils were lowered from the June report as AAFC factored in Statistics Canada’s latest acreage estimates to 2.900 million and 2.100 million tonnes respectively.
Pea ending stocks for 2023/24 are now forecast at 225,000 tonnes, from 375,000 in June and 400,000 the previous year.
Lentil ending stocks are forecast at 125,000 tonnes, which would be down from the 200,000 tonnes projected in June but still up from the 100,000-tonne carryout anticipated for the current marketing year.
Meantime, as of July 21, but before the AAFC release, the 1CWAD (Canadian durum wheat with 13,5% protein) average regional price was at C$439.67/t, up C$37.61/t.
Durum wheat price –CA St Lawrence (CWAD) was offered at US$380/t FOB, unchanged from a week earlier.
The 1 CWRS (Canadian common wheat with 13,5% protein) average regional price was at 394.86/t, down C$4.52/t.
(USD/CAD = $1.3223 up from $1.3214 the prior week).
Brazilian wheat farmers are expected to produce 3% more of the commodity than in the previous season, StoneX said on Wednesday, driven by a larger planted area and in spite of an expected fall in production in top supplier Rio Grande do Sul.
In the 2023/2024 cycle, wheat farmers will harvest an estimated 11.457 million metric tons as the area sowed grew by almost 7% nationwide from the previous cycle, StoneX said in a revised forecast.
On the other hand, Brazilian farmers could plant 44.47 MHa of soybeans in the 2023/24 season, according to the Patria Agronegocios consultancy.
That would be an increase of around 0.5% above the prior season’s plantings.
The group’s initial production estimate is for 155.8 MMT, a yearly increase of around 1.6%.
Brazil’s Abiove increased its estimates for the country’s current soybean crop to 156.49 MMT in what is increasingly looking like a record-breaking crop.
Brazil’s Anec estimates that the country’s corn exports will reach 6.8 MMT in July, which would be a year-over-year increase of nearly 21%, if realized.
As for soybean, Anec estimates that the country’s soybean exports will reach 8.8 MMT in July, which would be a monthly increase of nearly 26%, if realized.
Anec also expects to see Brazilian soymeal exports reach 2.584 million metric tons this month.
Abiove increased its outlook for Brazil’s 2022/23 soybean exports, with a new estimate of 97.51MMT.
Soymeal exports are expected to reach 22 million metric tons.
AgroConsult raised the estimates of Brazil’s 22/23 second corn crop from 102.4Mt to 107.2Mt, which is seen 16pc higher than the previous year.
In Argentina, rains that have slaked Argentina’s drought-hit farmlands have allowed soil moisture to recover and 71% of the area planned for wheat harvesting has now been planted under fair water conditions, the Buenos Aires Grains Exchange said on Thursday.
According to the Buenos Aires Grain Exchange, for the week ending 19 July, maize harvest was 67pc complete (76pc 5-year avg), with yields so far mostly below average, but similar to previous expectations. Sorghum harvest was 75pc complete (75pc previous year), with harvest results close to expectations, forecast production maintained at 2.5Mt (3.5Mt previous year). 2023-24 wheat planting at 92pc complete (97pc previous year, 96pc five-year avg), with conditions rated 90pc fair/excellent (88pc previous week, 75pc previous year).
Meantime, USDA attaché, estimated MY 2022/2023 soybean production at 21.25 million metric tons (MMT), 3.75 MMT below the official USDA estimate on lower than expected yields.
Soybean sales have been driven primarily by government programs offering exchange rate incentives and farmers are holding remaining soybean in anticipation of similar future programs.
Precipitation levels have improved in recent months across much of the growing region.
In this context, as of July 20, price for Argentina wheat Grade 2 quality, delivered Up River was at US$342/t, up $10/t from the prior week.
Price for Argentina feed corn (Up River) was at US$231/t, up $8/t w.o.w..
Price for Argentina feed barley (Up River) was at US$225/t, down $10/t.
Price for Argentina soybean (Up River) was at US$556/t, up $8/t.
Price for Brazilian feed corn (Paranagua) was at US$229/t, down $1/t.
Price for Brazilian soybean (Paranagua) was at US$527/t, up $6/t.
In Europe, grain and oilseed markets plunged, on signs that the Black Sea grain export corridor may not be completely finished.
Russian attacks on Ukrainian grains infrastructure seemed not as serious as initially feared.
Russian Deputy Foreign Minister Sergei Vershinin said on Friday a new grain deal between Russia and Turkey might be possible if Moscow’s demands were met.
Also, traders stressed that there was no urgent need to replace lost supplies as exports through Ukraine’s safe shipping channel were anyway running at a very low level, while demand from importing countries languish.
Thus, traders booked profits made during the week.
September milling wheat, indeed, closed 3.2% lower at 247.50 euros ($275.20) a tonne.
However, it posted a weekly gain of 6.7%, the highest weekly rise since August last year.
Germany’s winter barley harvest is approaching its end in favourable mainly dry weather with the crop size larger than expected, the association of German farmers DBV said on Friday.
In France, the soft wheat harvest was 58% done and the winter barley one was virtually over, with crop ratings stable since last week.
Durum wheat harvesting was 89% complete, versus 65% a week earlier, while 68% of the spring barley crop had been cut, up from 35% the previous week.
French farm office FranceAgriMer also estimated that 82% of the country’s corn crop was rated in good-to-excellent condition through July 17, which was steady from a week earlier and moderately better than year-ago results of 75%.
Egypt is to sign a $100 million renewable loan facility with the Abu Dhabi Fund for Development (ADFD) to fund its grains purchases, Supply Minister Ali Moselhy said.
Abu Dhabi-based agribusiness firm Al Dahra will be one of the first suppliers of the grain through the deal, but Moselhy said that the funding could be used for other purchases.
The loan will be facilitated through ADFD’s Abu Dhabi Exports Office (ADEX).
Tunisia’s grain harvest declined this year by 60% to 250,000 tonnes due to drought, the Agriculture Ministry said on Friday.
The decline in the grain crop would deepen Tunisia’s financial difficulties as it tries to clinch an international rescue package.
Some 99% of this season’s crop is durum wheat, the Agriculture Ministry official Salwa Ben Hdid told reporters.
Meantime, African development bank AFDB has lent Tunisia 87 million euros to finance grain supply and support grain storage infrastructure, the economy ministry said on Wednesday.
According to the USDA attaché in Algeri, given the unfavorable outlook due to ongoing drought and heat, production forecast in the current marketing year was revised down to 2.7 million tonnes for wheat and 1.02 tonnes for barley.
In 2022-23, the North African nation is estimated to have produced 3.3 million tonnes of wheat and 1.4 million tonnes of barley.
The attaché is projecting wheat imports at 8.7 million tonnes and barley imports at 700,000 tonnes in 2023-24.
According to the USDA attaché, the country is currently harvesting its second largest corn crop in history and a fourth consecutive bumper crop.
This creates a bearish outlook on local corn prices and will limit an expansion in the area to be planted with corn in marketing year (MY) 2023/24.
Additionally, the attaché foresees that the positive trend in soybean plantings will continue, also limiting possible expansion of corn area.
However, South Africa should maintain its status as a net exporter of corn under normal climatic conditions.
The attaché estimates South Africa could export around 2.5 million metric tons (MMT) of corn in MY 2023/24, while exports in MY 2022/23 are expected to reach 4 MMT.
In MY 2021/22, South Africa exported 3.7 MMT of corn, keeping exports on the same level as MY 2020/21.
As of July 20, the country has collected grains and pulses through 1.49 mln ha (14% of the plan), with the yield at 3.94 t/ha, and the production reached 5.888 mln tonnes, reported the press service of the Ministry of Agrarian Policy of Ukraine.
In particular, there were harvested:
wheat – through 830.96 thsd ha (18%), yield at 4.12 t/ha, with production at 3,42 mln tonnes;
barley – through 577.2 thsd ha (40%), yield – 3.9 t/ha, production – 2.253 mln tonnes;
peas – through 85.02 thsd ha (59%), yield – 2.46 t/ha, production – 208,9 thsd tonnes;
winter rapeseed – through 563.52 thsd ha (41%), yield – 2.47 t/ha, production – 1.39 mln tonnes.
A Russian government-linked think-tank considers the quality of soft wheat this season to be quite high, while some other industry experts and the Ministry of Agriculture say it is still lower than last year.
As of July 12, wheat harvesting was progressing at the slowest pace since 2016.
SovEcon news agency reported that wheat harvest so far was at 7.3 million tons from 1.9 million hectares comparing to 12.6 million tons from 3.0 million hectares a year earlier.
The quality of soft wheat this season is at a fairly high, decent level.
The Russian Agriculture Ministry said on Wednesday that more than 21 million tons of grain had been threshed in 35 regions during the harvesting campaign.
It confirmed the forecast of grain harvest of at least 123 million tons and exports of about 55 million tons.
China’s soybean imports from Brazil jumped 31.6% in June from a year earlier, data showed on Thursday.
Notably, China imported 9.53 million metric tons of soybeans from Brazil, up from 7.24 million tons a year earlier, data from the General Administration of Customs showed.
Total arrivals last month reached 10.27 million metric tons, and imports are set to stay high through the summer.
Shipments from Brazil in the first half of this year hit 29.7 million metric tons, 2 million metric tons higher than last year’s level.
June arrivals from the United States reached 527,586 tons, down 32% from a year ago.
However, U.S. shipments with 19.7 million metric tons for the first half year, are still higher than last year when reached 17.54 million metric tons.
For corn, arrivals from the United States fell to 1.23 million metric tons, down from 2.07 million metric tons a year ago, while Ukraine was the second supplier with 567,000 metric tons.
Total Chinese corn imports in June came to 1.85 million metric tons, down 16% on the year, data previously showed.
Meantime, recent rainfall in China’s northeastern breadbasket has relieved drought across most of the region and replenished soil moisture.
The area hit by drought in the northeast exceeded 20 million mu (1.33 million hectares) in May and June.
Rainfall since late June has replenished soil moisture and “basically eased the drought”, with only 1 million mu (66,666 hectares) of farmland still affected in Inner Mongolia.
Meantime, the area planted with corn has increased this year due to the good market price.
However, China has called for Chinese farmers to grow more grain and to receive a guaranteed income, after the expiry earlier this week of the Black Sea grain deal.
According to broadcaster CCTV, which cited the Central Financial and Economic Affairs Commission chaired by president Xi Jinping on Thursday, lawmakers said it was necessary to use China’s saline-alkali land to its full potential and expand agricultural production capacity.
China will safeguard its current red line of 1.8 billion mu (120 million hectares)of arable land.
India has ordered a halt to its largest rice export category.
The government of India has amended the export policy and imposed a ban on non-basmati white rice in an effort to relieve the recent rise in prices in the domestic market.
India accounts for more than 40pc of world rice exports, and the category impacted accounted for around 10 million tonnes (Mt) of the total 22Mt Indian rice exports last year.
ASX relaxed into the weekend and landed at A$405/t. It was able to gain $10/t for the week but had a range of A$35/t. PKE APW1 traded up to $420/t on mixed liquidity and canola was also firm at $760/t for new crop. Markets are still mostly in full carry at this stage and are not showing any signs of old crop supply squeeze just yet.
Daytime temps are starting to rise and the importance of follow up rain is building. The forecast is showing 10-20mm for later this week through NSW. Southern WA caught a handy rainfall Thursday night /Friday morning which will keep crop potential intact for now. southern WA, eastern SA and Vic have 5-25mm on the forecast this week.
International Grains Council – July Update
IGC saw fit to up their forecast for 23/24 world corn production from 1.211b MT to 1.220 billion MT.
That is now a 66 MMT increase from 22/23, but is still 4 MMT below 21/22 output.
Corn ending stocks were loosened by 6 MMT from their prior estimate, to 282 MMT.
As for soybean, the July outlook from IGC tightened global 23/24 soybean production by 2 MMT, noting the lost U.S. acreage reported on June 30.
At 400 MMT, IGC still has a record world production figure dialed in.
Projected soybean ending stocks were also trimmed by 2 MMT to 63 MMT.
As for wheat the IGC lowered their outlook for global 23/24 wheat output by 2 MMT to 784.
That is now a 19 MMT decline from last year, but still net +4 MMT from 21/22.
Stocks were tightened by 1 MMT to 263 MMT.