GRAIN MARKET VIEW
September 11, 2023 – Market Focus
Good morning, Farmer Family …
Main Markets
USA
US farm markets closed mixed but mostly lower, on Friday.
Corn trade ended with 0.51% losses.
Soybeans settled 0.26% higher, rising from a two-week low.
The rest of the soy complex was mixed, as soymeal closed with 1.59% gains, while soyoil lost 1.01%.
The wheat trade pulled back out Black Sea premium, falling across all the board. Chicago SRW, indeed, ended the session 0.67% in the red, hitting their lowest price in more than three months. Kansas City HRW closed 0.68% weaker, and Minneapolis spring wheat prices settled 0.52% lower.
Delayed Weekly Export Sales data showed the old crop corn business during the week ending 8/31, was a net 15k MT of cancelations. Total 22/23 corn commitments were at 40.58 MMT. New crop export sales were at 950k MT for a total forward commitments of 10.4 MMT.
For soybean, the report showed 155.6k MT of old crop sales and 1.783 MMT of new crop. The old crop commitments finished the MY with 53.43 MMT. New crop business started the season with 15.94 MMT on the books. USDA had meal bookings at 297,077 MT for old crop and 143k MT for new crop delivery.
Soy oil sales were marked at 878 MT of net cancelations.
For wheat, the USDA reported 370,341 MT of export sales, for a total 7.875 MMT.
Separately, the USDA confirmed a private export sale of 121,000 metric tons of U.S. soybeans to China for delivery in the 2023/24 marketing year.
Tuesday the USDA will release their monthly Crop Production, WASDE, and Cotton Ginnings reports.
Consumer Price Index data will be released on Wednesday, with Producer Price Index out on Thursday morning.
NOPA crush data for August will be out on Friday.
Corn basis bids were mixed at river locations across the Eastern Corn Belt, and trending lower amid sluggish corn export prospects.
Soybean basis bids on the Illinois, Mississippi, and Ohio Rivers continued lower, as well as in the Western Corn Belt. By contrast at a processing plants in the East were higher.
Basis levels for wheat ended the week mostly higher. In the Gulf, HRS, HRW, and SRW all basis increased. The PNW HRS basis increased while HRW remained steady.
Commodity funds were net sellers of corn, wheat and soyoil but net buyers of soybeans and soymeal.
For the week …
Corn ended the 2-week skid of weaker closes, but only managed a 0.47% gain since the prior Friday.
Soybeans faded 0.46% during the week, as soymeal rose 0.37%, and bean oil closed 5.08% lower.
The wheat got a little bounce out of the short week. Minneapolis led the charge with a 1.45% move higher. Kansas City clawed back 1.28%. Chicago was just 0.03% higher, after snapping a 5-week slide.
After the sessions close, the weekly CFTC report showed large speculators increased their net short position in Chicago Board of Trade corn futures in the week to Sept. 5. The report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and cut their net long position in soybeans.
This morning, Chicago wheat lost ground, trading close to the last session’s 14-week low on pressure from abundant supplies from top exporter Russia and a lack of demand for U.S. cargoes.
Corn eased while soybeans ticked higher, with traders waiting for updated crop estimates from the U.S. government on Tuesday.
Corn trade ended with 0.51% losses.
Soybeans settled 0.26% higher, rising from a two-week low.
The rest of the soy complex was mixed, as soymeal closed with 1.59% gains, while soyoil lost 1.01%.
The wheat trade pulled back out Black Sea premium, falling across all the board. Chicago SRW, indeed, ended the session 0.67% in the red, hitting their lowest price in more than three months. Kansas City HRW closed 0.68% weaker, and Minneapolis spring wheat prices settled 0.52% lower.
Delayed Weekly Export Sales data showed the old crop corn business during the week ending 8/31, was a net 15k MT of cancelations. Total 22/23 corn commitments were at 40.58 MMT. New crop export sales were at 950k MT for a total forward commitments of 10.4 MMT.
For soybean, the report showed 155.6k MT of old crop sales and 1.783 MMT of new crop. The old crop commitments finished the MY with 53.43 MMT. New crop business started the season with 15.94 MMT on the books. USDA had meal bookings at 297,077 MT for old crop and 143k MT for new crop delivery.
Soy oil sales were marked at 878 MT of net cancelations.
For wheat, the USDA reported 370,341 MT of export sales, for a total 7.875 MMT.
Separately, the USDA confirmed a private export sale of 121,000 metric tons of U.S. soybeans to China for delivery in the 2023/24 marketing year.
Tuesday the USDA will release their monthly Crop Production, WASDE, and Cotton Ginnings reports.
Consumer Price Index data will be released on Wednesday, with Producer Price Index out on Thursday morning.
NOPA crush data for August will be out on Friday.
Corn basis bids were mixed at river locations across the Eastern Corn Belt, and trending lower amid sluggish corn export prospects.
Soybean basis bids on the Illinois, Mississippi, and Ohio Rivers continued lower, as well as in the Western Corn Belt. By contrast at a processing plants in the East were higher.
Basis levels for wheat ended the week mostly higher. In the Gulf, HRS, HRW, and SRW all basis increased. The PNW HRS basis increased while HRW remained steady.
Commodity funds were net sellers of corn, wheat and soyoil but net buyers of soybeans and soymeal.
For the week …
Corn ended the 2-week skid of weaker closes, but only managed a 0.47% gain since the prior Friday.
Soybeans faded 0.46% during the week, as soymeal rose 0.37%, and bean oil closed 5.08% lower.
The wheat got a little bounce out of the short week. Minneapolis led the charge with a 1.45% move higher. Kansas City clawed back 1.28%. Chicago was just 0.03% higher, after snapping a 5-week slide.
After the sessions close, the weekly CFTC report showed large speculators increased their net short position in Chicago Board of Trade corn futures in the week to Sept. 5. The report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and cut their net long position in soybeans.
This morning, Chicago wheat lost ground, trading close to the last session’s 14-week low on pressure from abundant supplies from top exporter Russia and a lack of demand for U.S. cargoes.
Corn eased while soybeans ticked higher, with traders waiting for updated crop estimates from the U.S. government on Tuesday.
Canada
Alberta harvest progress reached 31 per cent complete as of Sept. 5. Durum led the cereals with 79 per cent in the bin.
According to the latest data from Statistics Canada, released Sept. 8, total wheat stocks as of July 31, were at 3.58 million tonnes, durum stocks were at 396,000 tonnes. Canola ending stocks were at 1.51 million tonnes. Oats stocks were at 1.28 million tonnes. Barley stocks in the country as of July 31, were at 708,000 tonnes. For the pulses, pea stocks were at 498,000 tonnes, while lentil supplies at 147,000 tonnes.
Common wheat deliveries into the handling system for the week ending Sep 3, were at 882,5k mt, and durum at 134,7k mt.
Canadian wheat exports for shipping week five came in at 410,0k mt, for a total of 1656,6k mt YTD.
Durum wheat exports were at 49,7k mt, for a total of 197,4k mt YTD.
Commercial stocks stood at 2.458,0k mt for common wheat, and at 394,1k mt for durum.
According to the latest data from Statistics Canada, released Sept. 8, total wheat stocks as of July 31, were at 3.58 million tonnes, durum stocks were at 396,000 tonnes. Canola ending stocks were at 1.51 million tonnes. Oats stocks were at 1.28 million tonnes. Barley stocks in the country as of July 31, were at 708,000 tonnes. For the pulses, pea stocks were at 498,000 tonnes, while lentil supplies at 147,000 tonnes.
Common wheat deliveries into the handling system for the week ending Sep 3, were at 882,5k mt, and durum at 134,7k mt.
Canadian wheat exports for shipping week five came in at 410,0k mt, for a total of 1656,6k mt YTD.
Durum wheat exports were at 49,7k mt, for a total of 197,4k mt YTD.
Commercial stocks stood at 2.458,0k mt for common wheat, and at 394,1k mt for durum.
Europe
European wheat prices eased on Friday but were up slightly over the week.
The euro edged up against the dollar, after hitting a three-month low against the U.S. currency on Thursday.
Recent rain falls in Argentina may allow exports to continue to Africa, denting European export sentiment.
Russian wheat is reaching Morocco, the main export market for European Union wheat in the past years.
The European Union castigated Russia on Saturday for pulling out of the Black Sea grain deal, but Russia demanded that its conditions be met and Turkey’s president said any initiative on the deal that isolated Russia would likely fail.
An EU ban on Ukrainian grain being sold directly in five eastern EU countries, which expires on Sept. 15, is likely to be maintained.
French grain maize crops in good or excellent condition declined by Sept. 4.
French farmers had gathered 1% of corn crops as at Sep 4.
The euro edged up against the dollar, after hitting a three-month low against the U.S. currency on Thursday.
Recent rain falls in Argentina may allow exports to continue to Africa, denting European export sentiment.
Russian wheat is reaching Morocco, the main export market for European Union wheat in the past years.
The European Union castigated Russia on Saturday for pulling out of the Black Sea grain deal, but Russia demanded that its conditions be met and Turkey’s president said any initiative on the deal that isolated Russia would likely fail.
An EU ban on Ukrainian grain being sold directly in five eastern EU countries, which expires on Sept. 15, is likely to be maintained.
French grain maize crops in good or excellent condition declined by Sept. 4.
French farmers had gathered 1% of corn crops as at Sep 4.
Africa
Ethiopia expects wheat output to grow on increasing planted and irrigating area.
Ukraine
Ukraine can harvest a total of about 80 mln tonnes of grains and oilseeds, the Deputy Chairman of the Ukrainian Agrarian Council, Denis Marchuk said.
Wheat has continued to flow, but Ukrainian government data showed a sharp fall in grain exports to 467,000 metric tons between Sept. 1 and Sept. 7.
Wheat has continued to flow, but Ukrainian government data showed a sharp fall in grain exports to 467,000 metric tons between Sept. 1 and Sept. 7.
Russia
A Russian Agricultural Bank subsidiary in Luxembourg could have access to the SWIFT international payments system within 30 days, the United Nations told Russia in a letter, as the UN tries to convince Moscow to revive a Black Sea grain deal.
The UN has reportedly offered to co-sponsor an insurance facility for Russian food and fertiliser exports with Lloyd’s of London and a lead underwriter “to be ready for operationalisation within 4-6 weeks.”
Russia will return to the Black Sea grain deal ‘the same day’ as Moscow’s conditions for export of its own grain and fertilisers to the global markets are met, Foreign Minister Sergei Lavrov told reporters on Sunday.
Russia to increase legume harvest by 24% to 5.7 MMT in 2023.
Turkey was the main importer of Russian grain legumes in 2022/23 MY with 498 KMT. EU members, Spain and Italy, despite unfriendly rhetoric, imported 211 KMT and 114 KMT from Russia.
Port Vysotsky, with 4 MMT PY capacity, was officially launched in Leningrad Region. This is the Russia’s first deep-water grain terminal on Baltics.
During the week of September 13-19, the export tax on Russian wheat will be 4,493.7 rubles per ton. The export tax on barley will be 931.7 rubles per ton, and the export tax on corn will be 2,465.2 rubles per ton.
The UN has reportedly offered to co-sponsor an insurance facility for Russian food and fertiliser exports with Lloyd’s of London and a lead underwriter “to be ready for operationalisation within 4-6 weeks.”
Russia will return to the Black Sea grain deal ‘the same day’ as Moscow’s conditions for export of its own grain and fertilisers to the global markets are met, Foreign Minister Sergei Lavrov told reporters on Sunday.
Russia to increase legume harvest by 24% to 5.7 MMT in 2023.
Turkey was the main importer of Russian grain legumes in 2022/23 MY with 498 KMT. EU members, Spain and Italy, despite unfriendly rhetoric, imported 211 KMT and 114 KMT from Russia.
Port Vysotsky, with 4 MMT PY capacity, was officially launched in Leningrad Region. This is the Russia’s first deep-water grain terminal on Baltics.
During the week of September 13-19, the export tax on Russian wheat will be 4,493.7 rubles per ton. The export tax on barley will be 931.7 rubles per ton, and the export tax on corn will be 2,465.2 rubles per ton.
China
China has asked some fertilizer producers to suspend urea exports after domestic prices jumped, Bloomberg reported.
According to a USDA FAS report, China soybean imports are raised to a record 101 million metric tons (MMT) in marketing year (MY) 22/23 on surging imports, which reached 84.3 MMT through July. Soybean imports for MY 23/24 are maintained at 98.5 MMT on higher domestic production and higher stocks following MY 22/23 imports.
According to a USDA FAS report, China soybean imports are raised to a record 101 million metric tons (MMT) in marketing year (MY) 22/23 on surging imports, which reached 84.3 MMT through July. Soybean imports for MY 23/24 are maintained at 98.5 MMT on higher domestic production and higher stocks following MY 22/23 imports.
South-East Asia
Malaysian palm oil prices posted a weekly drop, snapping three consecutive weeks of gains, hurt by weakness in rival vegetable oils and expectations of higher ending stock in August.
India’s soybean oilseed and rapeseed production estimates for marketing year (MY) 2022/23 (October-September) increased to 12.4 and 11.8 million metric tons (MMT) respectively due to favorable weather conditions.
This morning, a S&D report from the Malaysian Palm Oil Board, indicated palm oil reserves surged at the end of August, reaching to a 7-month peak.
India’s soybean oilseed and rapeseed production estimates for marketing year (MY) 2022/23 (October-September) increased to 12.4 and 11.8 million metric tons (MMT) respectively due to favorable weather conditions.
This morning, a S&D report from the Malaysian Palm Oil Board, indicated palm oil reserves surged at the end of August, reaching to a 7-month peak.
Australia
Local markets continued to strengthen as the week closed out.
Eastern Australian wheat gained further. Barley in the northern feed market also firmed. Canola markets softened. Pulse markets settled down.
AUSTRALIA exported 34,954 tonnes of chickpeas and 127,316t of lentils in July, according to the latest export data from the Australian Bureau of Statistics.
Weather forecasts for this week are not great.
Eastern Australian wheat gained further. Barley in the northern feed market also firmed. Canola markets softened. Pulse markets settled down.
AUSTRALIA exported 34,954 tonnes of chickpeas and 127,316t of lentils in July, according to the latest export data from the Australian Bureau of Statistics.
Weather forecasts for this week are not great.
Auctions
Wheat
South Korean traders reportedly purchased 57,000t feed wheat from optional origins, for Oct/Nov shipment.
Crop trader Solaris will be allowed the option to supply a recent private wheat deal to Egypt with grain from any origin, Supply Minister Ali El-Mosilhy said in an interview with Bloomberg.
Commercial source reportedly at latest Algeria durum wheat tender it seems that 60/80 KT of Australian durum was purchased, increasing total quantity bought up to circa 900/910 KT. As for the other origins, they likely are:250 KT from Canada; 100 KT from USA; 200 KT from Mexico; 280 KT from Turkey.
Crop trader Solaris will be allowed the option to supply a recent private wheat deal to Egypt with grain from any origin, Supply Minister Ali El-Mosilhy said in an interview with Bloomberg.
Commercial source reportedly at latest Algeria durum wheat tender it seems that 60/80 KT of Australian durum was purchased, increasing total quantity bought up to circa 900/910 KT. As for the other origins, they likely are:250 KT from Canada; 100 KT from USA; 200 KT from Mexico; 280 KT from Turkey.
Macroeconomics
Energy markets
Oil prices rose to a nine-month high, on rising U.S. diesel futures and worries about tight oil supplies after Saudi Arabia and Russia extended supply cuts.
For the week, both benchmarks were up about 2%, following gains last week of about 5% for Brent and about 7% for WTI.
This morning, oil prices eased as a stronger dollar and economic concerns in China weighed on fuel demand outlook.
For the week, both benchmarks were up about 2%, following gains last week of about 5% for Brent and about 7% for WTI.
This morning, oil prices eased as a stronger dollar and economic concerns in China weighed on fuel demand outlook.
Ocean freight markets
The Baltic Exchange’s main sea freight index in London rose and notched up its best week in six, powered mostly by gains in the largest capesize segment.
Equity markets
On Wall Street, US stock indexes closed slightly higher.
Strength in crude oil prices boosted energy stocks and the broader market.
T-note yields moved higher after Friday’s U.S. economic news showed July consumer credit rising, but weaker than expectations.
This morning, Asian shares were mostly higher, as investors awaited an update on U.S. inflation and China’s latest economic data.
Benchmarks rose in Shanghai, Sydney and Seoul but fell in Hong Kong and Tokyo.
Strength in crude oil prices boosted energy stocks and the broader market.
T-note yields moved higher after Friday’s U.S. economic news showed July consumer credit rising, but weaker than expectations.
This morning, Asian shares were mostly higher, as investors awaited an update on U.S. inflation and China’s latest economic data.
Benchmarks rose in Shanghai, Sydney and Seoul but fell in Hong Kong and Tokyo.
Currency trading
The dollar index registered an eighth straight week of gains, rising slightly on Friday, as T-note yields moved higher after Friday’s U.S. economic news showed Jul consumer credit rose, although weaker than expectations.
This morning, the U.S. dollar slipped to 146.08 Japanese yen from 146.99 yen after Bank of Japan Gov. Kazuo Ueda reportedly hinted at a possible change in Japan’s longstanding near-zero interest rate policy. The euro rose to $1.0732 from $1.0714.
This morning, the U.S. dollar slipped to 146.08 Japanese yen from 146.99 yen after Bank of Japan Gov. Kazuo Ueda reportedly hinted at a possible change in Japan’s longstanding near-zero interest rate policy. The euro rose to $1.0732 from $1.0714.
