GRAIN MARKET VIEW
September 18, 2023 – Market Focus
Good morning, Farmer Family …
Main Markets
USA
US farm markets were mixed but mostly higher to close out a somewhat volatile week on Friday.
Corn prices closed 0.88% lower.
Soybeans slumped 1.49% lower.
The rest of the soy complex was mixed, as soymeal stumbled 1.7% lower, while soyoil picked up 0.76%.
Wheat prices grabbed variable gains, as Chicago SRW rose 1.77%, Kansas City HRW added 1.36%, and Minneapolis spring wheat picked up 0.7%.
The seasonal harvest pressure triggered some technical selling both for corn and soybean.
NOPA members reported processing 161.45 mbu of soybeans in August. Soy oil stocks came in at 1.25 billion lbs.
Corn basis bids were steady to mixed across the central U.S., after trending as much as 10 cents higher at an Illinois processor and as much as 5 cents lower at an Indiana ethanol plant.
Soybean basis bids were steady to mixed across the central U.S., after stumbling as much as 45 cents lower at an Indiana processor while firming as much as 10 cents higher at a Nebraska processor.
For wheat, basis levels in the Gulf saw HRS and HRW mostly constant, while SRW basis increased slightly. Over in the Pacific Northwest, all values increased across the classes of HRW, HRS, and SW.
Commodity funds bought 5,000 lots of wheat and sold 12,000 lots of soybeans and 4,500 lots of corn.
For the week …
Soybeans ended down 1.67%, its third straight weekly decline. CBOT soybean prices are down around 12% this year.
Meal put pressure on the market, down 2.26%.
Bean oil saw some strength, with a 3.12% rally.
Corn was down 1.55%, hovering just above a 2-1/2 year low. Chicago corn has fallen 30% this year.
The wheat complex extended their bull run now to two weeks, as all three exchanges posted gains.
MPLS spring wheat was the leader, up 2.37%.
KBOT was close behind, up 1.98%.
CBOT, after touching a 33-month low, rallied to end the week up 1.43%, its biggest weekly advance in seven weeks.
After the sessions close, the CFTC report showed large speculators increased their net short position in Chicago Board of Trade corn futures in the week to Sept. 12. The report also showed that noncommercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and cut their net long position in soybeans.
This morning, Chicago corn prices firmed, although an upgrade to European production forecasts and supplies from the U.S. harvest kept prices near their lowest since late 2020.
Wheat fell, although expectations of lower output in Australia and Argentina limited losses.
Watching this week market …
Today in the afternoon we will get Export Inspections report from USDA and the NASS Crop Progress report out overnight after the sessions close.
The Fed will meet on Tuesday and Wednesday, with an interest rate decision on Wednesday overnight.
EIA will update ethanol stocks and production data on Wednesday.
USDA’s weekly Export Sales report will be published on Thursday.
Friday the USDA will publish the monthly Cattle on Feed report.
Corn prices closed 0.88% lower.
Soybeans slumped 1.49% lower.
The rest of the soy complex was mixed, as soymeal stumbled 1.7% lower, while soyoil picked up 0.76%.
Wheat prices grabbed variable gains, as Chicago SRW rose 1.77%, Kansas City HRW added 1.36%, and Minneapolis spring wheat picked up 0.7%.
The seasonal harvest pressure triggered some technical selling both for corn and soybean.
NOPA members reported processing 161.45 mbu of soybeans in August. Soy oil stocks came in at 1.25 billion lbs.
Corn basis bids were steady to mixed across the central U.S., after trending as much as 10 cents higher at an Illinois processor and as much as 5 cents lower at an Indiana ethanol plant.
Soybean basis bids were steady to mixed across the central U.S., after stumbling as much as 45 cents lower at an Indiana processor while firming as much as 10 cents higher at a Nebraska processor.
For wheat, basis levels in the Gulf saw HRS and HRW mostly constant, while SRW basis increased slightly. Over in the Pacific Northwest, all values increased across the classes of HRW, HRS, and SW.
Commodity funds bought 5,000 lots of wheat and sold 12,000 lots of soybeans and 4,500 lots of corn.
For the week …
Soybeans ended down 1.67%, its third straight weekly decline. CBOT soybean prices are down around 12% this year.
Meal put pressure on the market, down 2.26%.
Bean oil saw some strength, with a 3.12% rally.
Corn was down 1.55%, hovering just above a 2-1/2 year low. Chicago corn has fallen 30% this year.
The wheat complex extended their bull run now to two weeks, as all three exchanges posted gains.
MPLS spring wheat was the leader, up 2.37%.
KBOT was close behind, up 1.98%.
CBOT, after touching a 33-month low, rallied to end the week up 1.43%, its biggest weekly advance in seven weeks.
After the sessions close, the CFTC report showed large speculators increased their net short position in Chicago Board of Trade corn futures in the week to Sept. 12. The report also showed that noncommercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and cut their net long position in soybeans.
This morning, Chicago corn prices firmed, although an upgrade to European production forecasts and supplies from the U.S. harvest kept prices near their lowest since late 2020.
Wheat fell, although expectations of lower output in Australia and Argentina limited losses.
Watching this week market …
Today in the afternoon we will get Export Inspections report from USDA and the NASS Crop Progress report out overnight after the sessions close.
The Fed will meet on Tuesday and Wednesday, with an interest rate decision on Wednesday overnight.
EIA will update ethanol stocks and production data on Wednesday.
USDA’s weekly Export Sales report will be published on Thursday.
Friday the USDA will publish the monthly Cattle on Feed report.
Canada
At 44 per cent complete, harvest progress in Alberta was the least among the Prairie Provinces, with Manitoba at 51 per cent finished and Saskatchewan at 68 per cent done.
By crop, Alberta’s dry peas were listed as 95 per cent finished, with the barley at 63 per cent. The spring wheat was third at 53 per cent done, followed by the oats at 30 per cent and the canola at 19 per cent.
According to the latest Manitoba Agriculture report, 100 per cent of the winter wheat and fall rye was harvested, with yields averaging 60 and 70 bushels per acre respectively. Spring wheat was 85 per cent harvested, with yields generally in the 35 to 70 bu/acre area, and protein levels generally above 13.5 per cent.
By crop, Alberta’s dry peas were listed as 95 per cent finished, with the barley at 63 per cent. The spring wheat was third at 53 per cent done, followed by the oats at 30 per cent and the canola at 19 per cent.
According to the latest Manitoba Agriculture report, 100 per cent of the winter wheat and fall rye was harvested, with yields averaging 60 and 70 bushels per acre respectively. Spring wheat was 85 per cent harvested, with yields generally in the 35 to 70 bu/acre area, and protein levels generally above 13.5 per cent.
South America
Brazil
Rio Grande do Sul , one of the main wheat producing states in Brazil, is facing significant challenges in its wheat harvest this year due to adverse weather conditions.
Argentina
Buenos Aires Grain Exchange noted that after the conclusion of harvest, 2022-23 maize production was estimated at 34Mt. 2023-24 production is projected to rebound to 55Mt.
Rio Grande do Sul , one of the main wheat producing states in Brazil, is facing significant challenges in its wheat harvest this year due to adverse weather conditions.
Argentina
Buenos Aires Grain Exchange noted that after the conclusion of harvest, 2022-23 maize production was estimated at 34Mt. 2023-24 production is projected to rebound to 55Mt.
Europe
European wheat prices edged higher, to a new three-week high, rebounding from a three-month low, on signs of overseas demand for French wheat, and weakness in the euro.
France loaded a first wheat shipment to Algeria, this season and a new series of loadings for Morocco, as per port data.
Strategie Grains, saw EU soft wheat production at 125 million metric tons in the 2023/24 season, corn at 59.6 million tons, and barley at 47.4 million tons.
The European Union decided not to renew a ban on Ukrainian food heading to nearby countries.
Poland’s prime minister, said his government will extend its own the ban on Ukrainian grain, regardless of any lack of consent from the European Commission.
Hungary announced that it will not only extend its ban on grain imports from Ukraine but unilaterally restrict the import of 24 other Ukrainian agricultural products as of midnight Friday, among them rapeseed and sunflower seeds, flour, vegetable oil, honey, certain meats and eggs.
Slovakian Prime Minister said in a statement that his government decided to extend the ban on grain imports from Ukraine till the end of the year.
Bulgaria lawmakers, approved resuming imports of Ukrainian food products.
Romania’s plan to double the monthly transit capacity for Ukrainian grain through its Constanta port to four million metric tons in the coming months.
Romanian Black Sea port shipped 9.2 mln T Ukrainian grain in the period Jan-Aug 2023.
European Union countries should refrain from unilateral measures against imports of Ukrainian grain, the EU’s Trade Commissioner Valdis Dombrovskis said on Friday.
Ukraine has agreed to put measures in place starting Saturday to control the export of wheat, corn, rapeseed and sunflower seeds to neighboring EU countries.
France loaded a first wheat shipment to Algeria, this season and a new series of loadings for Morocco, as per port data.
Strategie Grains, saw EU soft wheat production at 125 million metric tons in the 2023/24 season, corn at 59.6 million tons, and barley at 47.4 million tons.
The European Union decided not to renew a ban on Ukrainian food heading to nearby countries.
Poland’s prime minister, said his government will extend its own the ban on Ukrainian grain, regardless of any lack of consent from the European Commission.
Hungary announced that it will not only extend its ban on grain imports from Ukraine but unilaterally restrict the import of 24 other Ukrainian agricultural products as of midnight Friday, among them rapeseed and sunflower seeds, flour, vegetable oil, honey, certain meats and eggs.
Slovakian Prime Minister said in a statement that his government decided to extend the ban on grain imports from Ukraine till the end of the year.
Bulgaria lawmakers, approved resuming imports of Ukrainian food products.
Romania’s plan to double the monthly transit capacity for Ukrainian grain through its Constanta port to four million metric tons in the coming months.
Romanian Black Sea port shipped 9.2 mln T Ukrainian grain in the period Jan-Aug 2023.
European Union countries should refrain from unilateral measures against imports of Ukrainian grain, the EU’s Trade Commissioner Valdis Dombrovskis said on Friday.
Ukraine has agreed to put measures in place starting Saturday to control the export of wheat, corn, rapeseed and sunflower seeds to neighboring EU countries.
North Africa
The Egyptian government said on Sunday that its strategic reserves of wheat were sufficient for five months of local consumption.It said in a statement that local wheat procurement has reached 3.8 million tons by the end of the 2023 harvest season.
Ukraine
Ukraine has harvested 35.2 million metric tons of grain and oilseeds of the new 2023 harvest so far, agriculture ministry said.
Farmers, as of 9/15, had harvested, 5.8 million tons of barley, 386,600 tons of peas, 3.99 million tons of rapeseed, 1.04 million tons of sunseed, and 22.15 MMT of wheat.
Five bulk carriers have now left Ukraine’s port in Odesa in a so-called “humanitarian corridor” that closely follows the western Black Sea coast near Romania and Bulgaria.
Farmers, as of 9/15, had harvested, 5.8 million tons of barley, 386,600 tons of peas, 3.99 million tons of rapeseed, 1.04 million tons of sunseed, and 22.15 MMT of wheat.
Five bulk carriers have now left Ukraine’s port in Odesa in a so-called “humanitarian corridor” that closely follows the western Black Sea coast near Romania and Bulgaria.
Russia
Russia’s 2023 wheat harvest now estimated at 92.85 MMT, as per RusAgroTrans.
From Aug. 1-27, Russia exported 6.4 million tonnes of grain, the Russian Grain Union estimated.
Russia’s wheat export tax for Sept. 20-26 will be 4,528.7 rubles ($46.81) per metric ton based on an indicative price of $242.80.
From Aug. 1-27, Russia exported 6.4 million tonnes of grain, the Russian Grain Union estimated.
Russia’s wheat export tax for Sept. 20-26 will be 4,528.7 rubles ($46.81) per metric ton based on an indicative price of $242.80.
China
China’s top diplomat, Wang Yi, begins today a four-day trip to Russia during which both nations are expected to pledge deeper mutual political trust, readying for a possible landmark visit by President Vladimir Putin to Beijing in October.
According to the CNGOIC (China National Grain and Oil Information Centre), soybean processing in China during the week of September 3-9 was 2 million tons. Stocks are estimated at 4.9 million tons.
According to the CNGOIC (China National Grain and Oil Information Centre), soybean processing in China during the week of September 3-9 was 2 million tons. Stocks are estimated at 4.9 million tons.
South-East Asia
Malaysian palm oil prices posted a second straight weekly drop, despite rising on Friday in a session underpinned by recovery in rival vegetable oils.
Exports of Malaysian palm oil products for Sept. 1-15 were at 574,936 tons, independent inspection company AmSpec Agri Malaysia said.
China will increase its imports of Malaysian palm oil by 250,000 tons a year, state news agency Bernama reported on Sunday.
Indonesia set its crude palm oil reference price at $798.83 per metric ton for the September 16-30 period. That would place the export tax and levy at $33 per ton and $85 per ton respectively for same period.
Exports of Malaysian palm oil products for Sept. 1-15 were at 574,936 tons, independent inspection company AmSpec Agri Malaysia said.
China will increase its imports of Malaysian palm oil by 250,000 tons a year, state news agency Bernama reported on Sunday.
Indonesia set its crude palm oil reference price at $798.83 per metric ton for the September 16-30 period. That would place the export tax and levy at $33 per ton and $85 per ton respectively for same period.
Australia
Australia exported 424,369 tonnes of canola in July, according to the latest export data from the Australian Bureau of Statistics.
The NAB Rural Commodities Index fell 1.6 percent in August and is now 30.7pc lower compared to when Australian rural commodity prices peaked in June 2022.
Aussie barley prices trended higher, while other commodities fell, according to NAB’s September Rural Commodities Wrap.
The NAB Rural Commodities Index fell 1.6 percent in August and is now 30.7pc lower compared to when Australian rural commodity prices peaked in June 2022.
Aussie barley prices trended higher, while other commodities fell, according to NAB’s September Rural Commodities Wrap.
Auctions
Wheat & Barley
The Taiwan Flour Millers’ Association has issued an international tender to purchase an estimated 93,125 metric tons of grade 1 milling wheat to be sourced from the United States. The deadline for submission of price offers in the tender is Sept. 22.
Algerian state grains agency OAIC has issued an international tender to purchase milling wheat, with shipment sought in different periods between mid-November and end-December for main supply origins.
The agency has also called a tender to buy barley for shipment in November and December. The bidding deadline in both tenders was on Tuesday.
Algerian state grains agency OAIC has issued an international tender to purchase milling wheat, with shipment sought in different periods between mid-November and end-December for main supply origins.
The agency has also called a tender to buy barley for shipment in November and December. The bidding deadline in both tenders was on Tuesday.
Macroeconomics
Energy markets
Oil prices hit a 10-month high on Friday and posted a third weekly gain.
Both contracts gained about 4% on a weekly basis.
This morning, oil prices rose for a third straight session on supply concerns, and recovery in China demand.
Both contracts gained about 4% on a weekly basis.
This morning, oil prices rose for a third straight session on supply concerns, and recovery in China demand.
Ocean freight markets
The Baltic Exchange’s main sea freight index, in London rose, clocking its biggest weekly percentage gain since March as demand across all vessel segments remained strong.
Equity markets
On Wall Street, US stock indexes tumbled on higher bond yields and tech stock weakness.
The U.S. import price index ex-petroleum was unchanged m/m for a second month, right on expectations.
The U.S. Sep Empire manufacturing survey general business conditions rose stronger than expectations.
U.S. Aug manufacturing production rose, right on expectations.
Aug industrial production rose , stronger than expectations.
The University of Michigan U.S. Sep consumer sentiment fell, weaker than expectations.
The University of Michigan U.S. Sep 1-year inflation expectations unexpectedly eased to a 2-1/2 year low, better than expectations.
Also, the Sep 5-10-year inflation expectations eased to a year low, better than expectations.
This morning, shares fell in Asia, with Hong Kong’s benchmark pulled lower by property stocks following reports that police had detained staff at the wealth management business of troubled real estate developer China Evergrande.
Tokyo’s markets were closed for a national holiday.
The U.S. import price index ex-petroleum was unchanged m/m for a second month, right on expectations.
The U.S. Sep Empire manufacturing survey general business conditions rose stronger than expectations.
U.S. Aug manufacturing production rose, right on expectations.
Aug industrial production rose , stronger than expectations.
The University of Michigan U.S. Sep consumer sentiment fell, weaker than expectations.
The University of Michigan U.S. Sep 1-year inflation expectations unexpectedly eased to a 2-1/2 year low, better than expectations.
Also, the Sep 5-10-year inflation expectations eased to a year low, better than expectations.
This morning, shares fell in Asia, with Hong Kong’s benchmark pulled lower by property stocks following reports that police had detained staff at the wealth management business of troubled real estate developer China Evergrande.
Tokyo’s markets were closed for a national holiday.
Currency trading
The dollar index fell slightly, after the University of Michigan Sep consumer sentiment and inflation expectations reports fell more than expected.
Higher T-note yields and the slump in stock limited losses in the dollar.
Also, hawkish ECB comments weighed on the dollar.
The dollar index increased for the ninth straight week, marking the longest weekly run since 2014.
This morning, the U.S. dollar inched up to 147.74 Japanese yen from 147.72 yen.
The euro was unchanged at $1.0666.
Higher T-note yields and the slump in stock limited losses in the dollar.
Also, hawkish ECB comments weighed on the dollar.
The dollar index increased for the ninth straight week, marking the longest weekly run since 2014.
This morning, the U.S. dollar inched up to 147.74 Japanese yen from 147.72 yen.
The euro was unchanged at $1.0666.
