Good morning, Farmer Family …
US farm markets ended Friday’s session with solid gains.
Corn firmed about 1.7%.
Soybean trended more than 2% higher.
The rest of the soy complex was also firmer, with soymeal up 1.33%, while soyoil prices jumped 2.06% higher.
The wheat complex turned in a mixed performance, as Chicago SRW contract was unchanged for the session, while Kansas City HRW closed 0.72% higher, and Minneapolis spring wheat price rallied by 1.82%.
USDA’s highly anticipated Prospective Plantings & Quartly Stocks reports offered some bullish data for traders to digest.
Notably, the USDA said US producers intend to plant 92.0 million acres of corn in 2023, up 4% from last year.
That was noticeably above the average trade guess of 90.880 million acres and nearly 1m above the Feb Forum figure.
However, NASS also released the quarterly Grain Stocks report to provide estimates of on-farm and off-farm stocks as of March 1.
And about this, the USDA said corn stocks totaled 7.40 billion bushels, down 5% from the same time last year.
That implied a 3.421 bbu use for the Q2.
The trade was looking to see a 7.473 bbu corn supply implying 3.335 billion bushels Q2 use.
However, it should to note that last year’s Q2 demand was 3.883 bbu.
The USDA also said, on-farm corn stocks were up 1% from a year ago, while off-farm stocks were down 10%.
Notably, NASS reported 4.106 bbu of (55.5%) corn supplies were still in farmer hands, compared to 4.08 bbu (52.6%) last year.
As for soybean, the USDA said growers intend to plant 87.5 million acres in 2023.
That was above the 87.45 planted for old crop and matches with their Feb projection.
However, traders were looking for 88.3 million on average.
Additionally, in Grain Stocks report, the USDA said soybeans stored totaled 1.69 billion bushels as of March 1.
That was down 13% from March 1, 2022, and tighter than the average trade guess, although within the range of estimates.
Notably, compared to last year, stocks were 246.4 mbu tighter.
Implied Q2 demand was 1.336 bbu, compared to 1.205 bbu last year and the implied estimate for 1.294 bbu.
The quarterly NASS update had 749.5 mbu (44.5%) of that in farmer hands, compared to 750 mbu (38.8%) on farm stocks last year.
Thus, on-farm soybean stocks were down slightly from a year ago, while off-farm stocks were down 21%.
As for wheat, the USDA said all wheat planted area for 2023 is estimated at 49.9 million acres.
That is up 9% from 2022.
Winter wheat planted area, at 37.5 million acres, is up 2% from the previous estimate and up 13% from last year.
KS was raised 600k from the January number.
Area planted to other spring wheat for 2023 is expected to total 10.6 million acres, down 2% from 2022.
That marked a 2.4% drop yr/yr with MN down by 5.6% and MT 3.7% lower than 22/23.
Durum wheat is expected to total 1.78 million acres for 2023, up 9% from 1.63m planted during the old crop season.
NASS also said, as of March 1 all wheat stored totaled 946 million bushels, down 8% from a year ago.
That was 985.799 mbu tighter yr/yr, with 227.5 still in farmer hands.
On-farm all wheat stocks indeed went up 30% from last year, while off-farm stocks went down 16%.
Last year’s on farm stocks were just 174.4 mbu.
Q3 disappearance was 365.8 mbu, compared to 348 mbu last year.
Durum wheat stored totaled 35.8 million bushels, up 18% from March 1, 2022.
On-farm Durum stocks were up 36% from a year ago, while off-farm stocks of Durum wheat were up 6%.
What really sticks out in Friday’s reports, is that the soybean stocks are at the low end of trade expectations.
That seems to indicate that we could see some price rationing.
For corn, the USDA projected 2023 corn plantings up.
However, traders cautioned that wet weather in southern reaches of the U.S. crop belt and heavy snow in the Dakotas and Minnesota could complicate plantings in the coming weeks.
Severe weather is expected in parts of the Mid-South and Midwest, with a chance of severe thunderstorms and even tornadoes.
NOAA’s Storm Prediction center even issued a relatively rare “high risk” forecast in some areas.
Further out, NOAA’s new 8-to-14-day outlook predicts a return to seasonally dry conditions for much of the Corn Belt between April 7 and April 13, with cooler-than-normal conditions also likely for the central U.S. during that time.
Thus, these acreage numbers may be all moot, unless the snow starts to melt soon.
In this context, commodity funds on Friday were net buyers in 5,000 lots of corn, 11,000 lots of soybean and 1,000 lots of wheat.
For the week, the USDA said on March 27, Texas corn crop was 52% planted, ahead of the state’s five-year average for this time of year at 45%.
Corn planting was 95% complete in Louisiana, but only 14% complete in Mississippi and 2% complete in Arkansas.
As for wheat, the USDA rated 34% of the winter wheat crop for Oklahoma, in “good-to-excellent” condition, up from 29% the prior week.
For Montana, the USDA in a monthly report rated 31% of the wheat crop in good condition, up from 21% at the end of February.
For Nebraska, the USDA in a monthly report rated 22% of the state’s wheat as “good-to-excellent”, up from 19% at the end of February.
In North Carolina, the USDA in a monthly report rated 88% of the state’s wheat as “good-to-excellent”, up from 87% in late February.
The USDA rated 71% of Mississippi’s winter wheat crop as “good-to-excellent”, compared with 68%, the prior week.
However, the USDA rated 19% of the winter wheat in Kansas in “good-to-excellent” condition, steady with the previous week.
For Texas, the USDA rated 18% of the crop as “good-to-excellent”, a drop from 23% the previous week, while 48% was rated as poor to very poor, compared with 44% previously.
For Colorado, the USDA rated 28% of the winter wheat as “good-to-excellent”, down from 36% the previous week.
For South Dakota, the USDA in a monthly report rated 22% of the state’s wheat as “good-to-excellent”, down from 23% at the end of February.
The USDA rated 56% of the Louisiana winter wheat crop as “good-to-excellent”, compared with 65% the prior week.
In Arkansas, where farmers grow soft red winter wheat, the USDA rated 51% of the state’s wheat as “good-to-excellent”, down from 60% a week ago.
In Illinois, another soft wheat producer, the USDA in a monthly report rated 58% of the crop as “good-to-excellent”, down from 82% at the end of February.
On Wedsneday, EIA data tallied ethanol production increasing 6,000 barrels per day to 1.003 million bpd during the week of 3/24.
Ethanol stocks were slashed 661,000 barrels to 25.527 million barrels, as implied exports out of the Gulf pulled stocks down 625,000 barrels.
The weekly Export Sales report on Thursday indicated old crop corn bookings of 1.04 MMT during the week that ended on March 23.
USDA announced another 4 separate daily sales totalling 630,800 MT corn sold to China and unknown during the week.
Old crop corn export commitments are now 77% of the current USDA forecast, catching up to the 87% average pace for this date.
As for soybean, Export Sales report put old crop soybean bookings in week of March 23 more than double the week prior at 348,200 MT.
Commitments are now 91% of USDA’s forecast total, now 1% below the average pace to meet the USDA target.
As for wheat, Export Sales data showed bookings up slightly vs. prior week’s multi-week low at 151,700 MT.
That limped total wheat export commitments to 18.107 MMT as of March 23.
That is still 6% below year ago and 86% of the USDA export projection, vs. the 100% average pace.
In this context, corn price rallied another 2.72% for the week.
Soybeans shot 5.41% higher, with meal up 4.7%, and bean oil 4.17% higher.
Wheat prices also rallied across the three markets, with Chicago up just 0.54%, while Kansas City was up another 3.51% since the prior Friday, and MPLS spring wheat pushed its way to fresh 1-month highs, with a 4.46% rally.
Going inside the numbers, corn price closed the week $0.175 firmer at $6.61/bu.
Soybean was $0.772 stronger from the prior Friday, ending at 15.06/bu.
Soymeal jumped by $20.90/smt, closing at $466 smt.
Soy oil rose $2.22, to close at $55.49.
CBOT soft red winter (SRW) price lifted $0.038 for the week, to close at $6.92/bu.
KCBT hard red winter (HRW) prices rose by $0.297, ending at $8.78/bu.
MGE hard red spring (HRS) prices soared by $0.383, to $8.96/bu.
As for basis, corn basis bids were largely unchanged across the central U.S. on Friday, but did shift 5 cents higher at an Ohio river terminal.
Soybean basis bids were steady to mixed across the Midwest, after moving as much as 10 cents higher at an Iowa processor and as much as 5 cents lower at an Illinois river terminal.
As for wheat, basis was mixed past week as the market assessed planted area, crop conditions, and wheat stocks, while export demand stays light.
HRS basis was down in the Gulf and unchanged in the Pacific Northwest (PNW) as sales remained low.
HRW basis was up in both the Gulf and the PNW with drought conditions raising concern for the 2023 HRW harvest.
The inverted market also continues to influence HRW basis.
SRW basis was down while Soft white prices stayed steady.
As a result, as of March 30, 2023, FOB prices saw US wheat No 2 Hard Red Winter (HRW) valued at $388/mt (up $22/t from prior week).
US wheat No 2 Soft Red Winter (SRW) was valued at $293/mt (up $7 from prior week).
Northern Durum offers from the Great Lakes, for May 2023 delivery were quoted at $11.85/bu ($435.00/MT), unchanged from the prior week.
As for corn, US corn 3YC (Gulf) was at $297/mt (up $7 from prior week).
As for soybean, US soybean 2Y (Gulf) quoted at $583/mt (up $21 from prior week).
USDA’s weekly Ethanol report showed the regional ethanol cash prices were 3 to 13 cents/gal higher from $2.05 to $2.30/gal.
The cash corn oil market was within 4 cents of last week, from 50 to 58 cents/lb.
DDGS were quoted from $240 in Oh to $286.67/ton in MS, mostly lower for the week within $25 of UNCH.
DDGS prices to the Export Point averaged between $229 to $335/ton, weaker from prior week.
USDA reported IL’s weekly average B100 price at $5.79/gal – UNCH with last week.
After Friday sessions close, Weekly CFTC data showed managed money closed 21k shorts and added 7.5k new longs during the week that ended 3/28.
The spec fund group was still net short by 13,288 contracts.
Commercial corn hedgers added 10k new short hedges and closed 18k existing longs for a 203,547 contract net short on 3/28.
As for soybean, weekly CFTC data showed soybean spec traders were 99,522 contracts net long on 3/28.
That was an 11k contract drop for the week mostly via long liquidation.
The commercial soybean hedgers added 11k new longs for a 180,065 contract net short as of Tuesday’s settle.
The spec traders added to their net short in soy oil via long liquidation, while the meal specs were 19k contracts less net long on long liquidation.
That was 14% of the existing fund longs.
As for wheat, the Commitment of Traders report showed the funds were closing positions in SRW wheat during the week that ended 3/28.
The long liquidation offset the short covering and left the group 89,873 contracts net short.
In KC wheat, managed money was shown having flipped back to net long via short covering.
The group was 237 contracts net long at the Tuesday settle, from a 8,762 contract net short on 3/21.
CFTC marked the spring wheat spec traders at 420 contracts net long for 3/28.
That was a 3,044 contract swing back to net long via net new buying.
Trying to make a balance for the month and quarter, for the month, corn price closed with 4.4% gains.
Soybean ended the month with a net 1.79% gain.
Soymeal has been 0.24% weaker.
Soybean oil posted a 7.58% loss for the month.
Wheat prices have been variable, as Chicago 1.88% weaker for the month, while Kansas City was up 8%, and MPLS spring wheat rose by 3.35%.
For the first quarter of the year, Chicago wheat fell 12.6%, MPLS spring wheat shedded 2.77%, while Kansas City was up 0.11%,
Corn price was down 3.08%.
Soybeans was down 1.04%, with soybean oil posting a 13.74% loss, while soymeal was 2.74% higher.
On this morning, Chicago soybean prices jumped to a three-week peak on Monday, while corn rose to its highest in more than a month.
Chicago wheat also rose after closing largely flat in the previous session.
Notably, the most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.5% at $15.13-1/2 a bushel, as of 00:54 GMT, after climbing earlier in the session to its highest since March 13 at $15.17 a bushel.
Corn added 0.7% to $6.65-1/4 a bushel, having risen to its highest since Feb. 23 earlier in the day to $6.66-1/2 a bushel.
Wheat gained 0.9% to $6.98-3/4 a bushel.
Wet weather in the southern reaches of the US crop belt and heavy snow in the Dakotas and Minnesota could delay plantings in the coming weeks.
Chicago soybean and corn prices had been supported by bullish planting and stocks reports issued by the USDA last week.
The rally in crude oil prices (read more below), provided an additional support, with growing use of grains and oilseeds in making biofuels.
In energy markets, oil prices rose by more than a dollar a barrel on Friday to record their second-straight week of gains, as supplies tightened in some parts of the world and U.S. inflation data indicated price rises were slowing.
The most actively traded Brent futures, for June delivery, settled up $1.29, or 1.6%, at $79.89 a barrel.
Brent futures for May delivery, which expired upon settlement, gained 50 cents, or 0.6%, to settle at $79.77 a barrel.
West Texas Intermediate crude (WTI) for May delivery settled higher by $1.30, or 1.8%, at $75.67 a barrel, gaining about 9% for the week.
Data on Friday showed the U.S. Personal Consumption Expenditure (PCE) index, the Federal Reserve’s preferred inflation gauge, rose 0.3% in February on a monthly basis, compared with a 0.6% rise in January and an expectation of a 0.4%.
Signs that inflation is slowing tend to support oil prices as this could point to less aggressive interest rate hikes from the Fed, lifting investor demand for risk assets like commodities and equities.
Oil prices were also buoyed after producers shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline.
Despite Friday’s gains, Brent and WTI recorded monthly declines of 5% and 2% respectively, their steepest since November.
Brent settled lower for the third quarter in a row, the first time that has happened since 2015.
The benchmarks hit their lowest since 2021 on March 20 in the wake of large bank failures, and while they have recouped some of the losses since then, they remained well below the levels at which they were trading at the start of March.
On this morning, oil prices surged, posting the biggest daily rise in nearly a year.
Notably, Brent crude was trading at $83.89 a barrel by 06:27 GMT, up $4, or 5%, after touching the highest in a month at $86.44 earlier in the session.
U.S. West Texas Intermediate crude was at $79.39 a barrel, also up about $4, or 5%, after earlier hitting the highest level since late January.
The OPEC+ shocked markets by announcing further production cuts of about 1.16 million barrels per day (bpd) on Sunday.
The group had been expected to maintain its earlier decision to cut output by 2 million bpd until December.
However, since November global oil supply-demand balance suggested a strong policy action was needed to keep global oil surpluses in check, the group said.
U.S. crude production rose in January to 12.46 million barrels per day (bpd), the highest since March 2020, Energy Information Administration (EIA) data showed on Friday.
Then, the surprise announcement by OPEC+ to cut more production.
The pledges bring the total volume of cuts by OPEC+ to 3.66 million bpd according to analysts calculations, equal to 3.7% of global demand.
As a result, Goldman Sachs lowered its end-2023 production forecast for OPEC+ by 1.1 million bpd and raised its Brent price forecasts to $95 and $100 a barrel for 2023 and 2024, respectively.
Goldman Sachs estimated the output reduction could provide a 7% boost to oil prices, contributing to higher Saudi and OPEC+ oil revenues.
The Biden administration said the move announced by the producers was unwise.
Some analysts questioned OPEC+’s rationale for the extra production cut.
However, “the move, like the October cut, can be read as another clear signal that Saudi Arabia and its OPEC partners will seek to short circuit further macro sell-offs and that Jerome Powell is not the only central banker that matters”, RBC Capital Markets analyst Helima Croft said.
“The bottom line is Washington and Riyadh simply have different price targets for their key policy initiatives.”
In ocean freight markets, the Baltic exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, posted its biggest fall in six weeks, pressured by lower shipping rates for capesize and supramax segments.
The overall index, indeed, fell 14 points, or 1.0%, to its lowest since March 9 at 1,389.
It was down 6.7% for the week – its biggest dip since the week ended Feb. 17.
The main index was, however, up 128.4% for the month, to post its second monthly rise in a row.
Notably, the capesize index lost 11 points to 1,665.
It has fallen 11.5% for the week – its second consecutive weekly fall.
The index gained 128.4% for the month.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, decreased $95 at $13,806.
The panamax index was up 10 points 1,635.
The index rose 4% for the week and 15.1% for the month.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, were up $96 at $14,718.
Among smaller vessels, the supramax index lost 39 points, or about 3.2%, to 1,198.
It was down 10.1% for the week, snapping its six-week winning streak.
It was up 8.4% points for the month.
In equity markets, US stock indexes Friday rallied after a key U.S. inflation measure rose less than expected in February, suggesting the Fed may be close to ending its rate-hiking campaign.
The U.S. Feb PCE core deflator, the Fed’s preferred inflation gauge, indeed, unexpectedly eased to 4.6% y/y from 4.7% y/y in Jan, the slowest pace of increase in 16 months.
Also, Feb personal income rose +0.3% m/m, stronger than expectations of +0.2% m/m.
In addition, the Mar MNI Chicago PMI unexpectedly rose +0.2 to 43.8, stronger than expectations of a decline to 43.0.
On the negative side, Feb personal spending rose +0.2% m/m, weaker than expectations of +0.3% m/m.
Also, the University of Michigan U.S. Mar consumer sentiment was revised lower to 62.0 from 63.4, weaker than expectations of 63.3.
However, the easing of inflation pressures knocked global bond yields, supporting stocks, and technology sector in particular.
The 10-year T-note yield fell -6.1 bp to 3.488% after the U.S. Feb core PCE deflator rose less than expected.
The 10-year German bund yield retreated from a 2-week high of 2.404% and fell -8.2 bp at 2.292%.
The 10-year UK gilt yield fell back from a 2-1/2 week high of 3.572% and dropped -2.8 bp to 3.490%.
Month and quarter-end buying by fund managers also supported stock gains Friday.
U.S. stocks also had carryover support from Friday’s rally in Chinese stocks on signs the Chinese economy is recovering after Chinese manufacturing and service sector activity expanded more than expected this month.
The China Mar manufacturing PMI fell -0.7 to 51.9, stronger than expectations of 51.5.
The Mar non-manufacturing PMI unexpectedly rose +1.9 to 58.2, stronger than expectations of a decline to 55.0 and the fastest pace of expansion in more than 11 years.
In this context, the Dow Jones Industrial Average rose 415.12 points, or 1.26%, to 33,274.15, the S&P 500 gained 58.48 points, or 1.44%, to 4,109.31 and the Nasdaq Composite added 208.44 points, or 1.74%, to 12,221.91.
For the week and month, stocks also posted strong gains.
The Nasdaq was up 6.7% for March.
For the quarter, the Nasdaq jumped 16.8% in its biggest quarterly percentage increase since the three months ended June 2020.
The S&P 500 gained 7% in the quarter, closing at its highest level since Feb. 15 and posted a second straight quarter of gains, led by the technology sector’s 21.5% rise in the first quarter.
The quarterly gains came despite a sharp sell-off in bank stocks following the collapse of two regional banks earlier this month and worries about a potential bigger financial crisis.
The S&P 500 financial sector was the quarter’s worst-performing sector, posting a 6.1% drop, while the KBW regional bank index fell 18.6% for the period.
The Dow rose 0.4% in the quarter, based on the latest available data.
On this morning, shares in Asia were mixed.
Tokyo’s Nikkei 225 index gained 0.5% to 28,188.15, even after a quarterly survey by the Bank of Japan showed business sentiment among big Japanese manufacturers falling in the first quarter of this year.
The headline measure of the “Tankan” showed positive sentiment falling to 1 from 7 in December, the worse quarterly result since since December 2020.
Hong Kong’s Hang Seng slipped 0.4% to 20,324.49, while the Shanghai Composite index rose 0.7% to 3,296.42.
Australia’s S&P/ASX 200 advanced 0.6% to 7,223.00.
Shares rose in Taiwan but edged lower in Bangkok.
The OPEC+ cut decision, which are in addition to a reduction announced last October, infuriated the Biden administration.
Its expected that this move will boost gas prices, adding to strains in many countries where high fuel prices are a heavy burden.
Higher oil prices also will complicate the efforts by central banks to rein in inflation.
“This will create both political waves across Europe and even higher general inflation in the USA, leading to renewed pressure on the Federal Reserve to keep hiking rates aggressively,” Clifford Bennett, chief economist at ACY Securities, said in a report.
In currency trading, the dollar index Friday rose by +0.36% to 102.186.
However, dollar gains were limited after US Friday’s economic news.
The EUR/USD on Friday fell by -0.54% to 1.0842.
Eurozone economic news weighed on EUR/USD.
Eurozone Mar CPI eased to +6.9% y/y from +8.5% y/y, better than expectations of +7.1% y/y and the slowest pace of increase in 13 months.
March core CPI rose to a record +5.7% y/y from +5.6% y/y in Feb, right on expectations.
German Mar unemployment rose by +16,000, showing a weaker labor market than expectations of +1,000.
Also, the Mar unemployment rate rose +0.1to 5.6%, showing a weaker labor market than expectations of no change at 5.5%.
German Feb retail sales unexpectedly fell -1.3% m/m, weaker than expectations of +0.5% m/m.
The German Feb import price index eased to +2.8% y/y from +6.6% y/y in Jan, weaker than expectations of +4.2% y/y and the slowest pace of increase in 2 years.
The USD/JPY on Friday rose by +0.08% to 132,76, with the yen falling to a 2-week low against the dollar.
A rally in the Nikkei Stock Index Friday to a 3-week high reduced the safe-haven demand for the yen.
The yen also fell back after Friday’s economic news showed the Mar Tokyo CPI eased and the Japan Feb jobless rate unexpectedly rose; both are dovish for BOJ policy.
However, the yen recouped most of its losses as T-note yields declined.
On this morning, the U.S. dollar rose to 133.60 Japanese yen.
The euro fell to $1.0829.
Going back to analysing the other agricultural markets …
From Canada, the Grain Statistics weekly report, showed producers’ deliveries of common wheat at 558,9k mt for week 34 of this shipping season.
That was up from 488,8k mt posted prior week.
Deliveries of durum wheat, were also higher at 129,7k mt, compared with 120,8k mt showed in prior week.
Canada exported 392,7k mt of common wheat in week 34.
That was down from 465,6k mt of a week earlier.
Durum wheat exports, were also weaker moving down from 196,3k mt to 53k mt.
Total Commercial Stocks of common wheat stood at 2.955.2k mt.
That was up from 2.835.7k mt posted in week 33.
Total durum commercial stocks, also were higher moving up from 562,4k mt a week earlier, to 647,6k mt.
Cumulative exports for common wheat were at 13.195,2k mt.
That is compared 7.646,2k mt a year ago.
Durum cumulative exports reached 3.595,7k mt vs 1.598,0 a year ago.
In this context, cash bids for Canadian durum wheat fell week over week.
Indeed, looking at the average regional price of C$449.38/mt as of March 31, that was C$5.17/mt weaker from the prior week.
Going inside the numbers of the week, as at March 27, 2023, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $488.24 per tonne, up C$7.59/t;
– for the N2 class CWRS 13.0% – $481.86/t up C$7.59/t;
– for the N3 CWRS – $509. 87/t up C$14.66/t .
– for the N1 CWAD 13% (durum wheat first class) average street price in Rosetown was at C$455.63/t down C$3.67/t.
The export basis West Coast & Central SK, was not valued as Great Lakes are closed in this period of shipping season.
Meanwhile, the European Commission reported Canada’s No. 1 CWAD at US$415/mt FOB St. Lawrence, as of March 29.
That was up $5/t from prior week, but in Canadian dollars meant C$561.16/mt, down C$2.3/t from the prior week.
As at March 31, 2022, for the N1 CWAD 13% (durum wheat first class), average street price in REGIONAL ZONES was at C$449.38 per tonne, down C$5.17 from prior week.
(1USD=Cnd$1.3522 up from 1.3743 a week earlier).
From South America, Brazil’s Safras & Mercado estimates that the country’s total 2022/23 corn production will reach 130.28 MMT, which is up from the group’s prior forecast of 125.35 MMT.
The increase is primarily due to a boosted estimate for Brazil’s second corn crop, which accounts for around three-fourths of its total production.
In Argentina, corn production potential has eroded significantly throughout much of the 2022/23 season, but the Buenos Aires grains exchange says it has finally stabilized at around 36 MMT.
Notably, the maize harvest was seen at 7pc complete (5pc previous week, 14pc previous year).
Meanwhile crop conditions were rated at 47pc fair/excellent (42pc previous week, 83pc previous year).
The exchange also expects Argentina’s soybean harvest will only reach 25 MMT this season.
Harvesting was yet to get fully underway but early reports indicated great variability in yields.
For the week ending 29 March, soybean conditions were rated 33pc fair/excellent (27pc previous week, 85pc previous year).
Rain received during the past week prevented a further deterioration of late planted crops.
Wetter conditions in Argentina are likely this week, while Brazilian weather patterns are turning up much more dry.
“Rainfall is still expected to return mid-April.
However, three weeks is a long time to go without moisture, especially for crops planted in March,” he notes.
“Much of Parana and parts of Mato Grosso had built up plenty of soil moisture, but that doesn’t last as long with porous sandy loam soils.”
In this context, as of March 30, 2023 – Argentina Wheat Grade 2 export price, (Up River) was at $350, up $15/t from prior week.
Argentina corn feed was up $1/t for the week, closing at $294.
Brazilian corn feed (Paranagua) was valued at $295, was up $7/t from prior week.
Argentina feed barley, was unchanged for the week to $320.
Argentina soybean was up $20 at $602.
Brazilian soybean was up $22, finishing the week at $516.
In Europe, European Commission pegged 2023-24 EU common wheat production at 130.9Mt (126Mt previous year), durum production 7.5Mt (7.1Mt previous year), barley production 54.2Mt (51.5Mt), maize production 65Mt (52.1Mt) and rapeseed 19.8Mt (19.6Mt previous year).
French farm office FranceAgriMer on Friday reported that the country’s 2022/23 soft wheat quality ratings held steady in the week through March 27, with 94% in good-to-excellent condition, (unch from previous week, 92pc previous year).
Durum conditions were rated at 91pc (92pc, 87pc).
France’s winter barley crop is also in solid shape, with 93% rated in good-to-excellent condition through the same period, (unch, 88pc), and spring barley at 99pc (unch, 93pc).
Meantime, Eastern European countries are asking the European Commission to reinstate import taxes for Ukrainian origins, due to increased competition on their markets, causing a drop in prices for their producers.
The USDA report released on Friday was rated as slightly bearish for wheat, neutral for corn and bullish for soybean.
That led a fall in grain prices and a rise in rapeseed.
As a result, May wheat on Paris-based Euronext, closed the week at 260.25 euros ($282.16 + $3.21 wow) a tonne on Friday, posting only a €1/t weekly increase.
As for the other products, price for May’s European Durum Wheat, remained unchanged for the week, settling at €426.25/t.
June corn price was up €4/t for the week, closing at 257.75 euros per ton.
Rapeseed May contract closed at €475.75/t, up €18.75/t for the week.
UK wheat feed, May 23 contract, closed at £202, down £2/t week on week.
Meantime, as of March 30, 2022, FOB prices in US dollar for French wheat with 11.5% protein and April -May delivery, were at $292/mt, up $15 from prior week.
French durum wheat – delivered La Pallice Spot – July 2022 basis, was valued at $439.1/mt, down $23.58 from prior week.
Corn, delivered Bordeaux Spot – July 2022 basis, was at $285.14 per tonne, up $12.91/t from past week.
Corn FOB Rhin Spot – July 2022 basis, was down $10.86 to $271.05/t.
Feed barley delivered Rouen was at 272.13$/t, up $11.74 per tonne.
Malting barley FOB Creil Spot – July 2022 basis was at $309 per tonne, up $13/t from prior week.
Rapessed FOB Moselle – 2022 harvest was at 484.64$/ton, up $15.5 compared to prior week.
Standard sunseed FOB Bordeaux – 2022 harvest was up 68.25$ from the prior week at $487.89 per tonne.
Other data from the European Commission, were not updated, and delayed at the week ending March 26.
On this morning, the jump in oil prices is to be noted, as comes on top of a significant rise in palm prices in Asia trading, and after the rally in soybean prices on Friday.
Thus, a rally in rapeseed is likely today.
(Eur/USD = 1.0842 vs last week 1.0760).
From Ukraine, Ag Ministry reported 5.1 MTM of grain exports for March.
That is up from the 1.4 MMT during the same month last year when the war had just begun.
The MYTD volume reached 37.4 MMT, which is 16.7% lower than last year, and included 12.761 mln tonnes of wheat (1.423 mln tonnes in March), 2.267 mln tonnes of barley (217 thsd tonnes), 22.035 mln tonnes of corn (3.431 mln tonnes), and 17.4 thsd tonnes of rye (1.8 thsd tonnes).
Also, as of March 29, the total export of Ukrainian flour amounted to 152.3 thsd tonnes (20.3 thsd tonnes in March), including wheat flour – 109.9 thsd tonnes (14.9 thsd tonnes).
Meantime, as of March 30, all regions of Ukraine have started spring planting campaign, the press service of the Ministry of Agrarian Policy of Ukraine reported.
“In general, on the specified date, all categories of farms planted 500 thsd ha with grains and pulses, of which 107,7 thsd ha with spring wheat, 3007,4 thsd ha with spring barley, 57,7 thsd ha with peas and 26.4 thsd ha with oats,” the message states.
From Russia, the government statistics agency in Russian, Rosstat, estimated on-farm wheat stocks at 17.4Mt as of 1 March, 82pc higher than the 5-year average.
Russia has the opportunity to supply 62 million tons of grain to international markets this agricultural season (July 1, 2022 – June 30, 2023).
At the moment, the country has already exported 46 million tons.
The Russian government proposed to make an additional purchase to the state intervention fund for 7 million tons of wheat.
Prior to that, 3 million tons of grain were purchased.
But such a procedure cannot be carried out in such a short time.
In addition, the lack of accredited warehouses for storing grain in Russia may become a problem.
Meantime, spring sowing was carried out on an area of about a million hectares, the pace is almost twice as high as last year, said Dmitry Patrushev during the operational headquarters, according to the Ministry of Agriculture of the Russian Federation.
Active sowing is carried out by the southern regions and the North Caucasus.
The agrarians of the central part of Russia have begun to enter the fields, and the Volga region will soon join them.
In general, spring field work has already begun in 33 regions.
Winter crops are fed on an area of 8.4 million hectares.
On the other hand, Russia’s Ag Ministry received notification from Viterra it would cease origination and export programs from 1 July, the start of the 2023/24 marketing year, and assess options to transfer its business and assets in Russia to new owners.
On Wedsneday, Cargill also said it would take a further step back from the Russian grain market, although its shipping unit will continue to carry grain from the country’s ports.
On Thursday, Archer-Daniels-Midland Co. also said is weighing options to exit its main Russian operations.
The Chicago-based company is reviewing its 50% stake in a joint venture with Russian partner Aston, according to people familiar with the matter.
The venture, launched in 2018, processes corn to produce sweeteners and starches for the Russian food and beverage industry.
However, the officially announced leaving of the world’s leading grain traders from the Russian market will strengthen the geopolitical influence of the Russian Federation and increase its profits, announced Bloomberg, on April 1.
Meantime, Russia’s agriculture ministry has set out its weekly grain export taxes for Apr 5 – 11.
Notably, starting March 5, the Russian export tax on corn will increase, while the export tax on wheat and barley will be reduced.
From Australia, subdued interest from export buyers facing increased competition from Black Sea cargoes has seen values for feedgrain soften past week.
Demand from domestic consumers was limited in the prompt market, with traders saying most offers from growers were for the July market, which will put income in the new financial year.
In the north, barley continued to hold its premium over wheat as the preferred grain for feedlots, and the sorghum market has weakened on grower selling swamping Chinese demand in the near term.
Widespread rain across southern Australia and patchy falls in northern New South Wales and southern Queensland were shoring up prospects for some early winter-crop planting.
In this context, indicative delivered prices in Australian dollars per tonne during past week were:
Barley Downs: $415, unchanged from Mar 23;
SFW wheat Downs: $410, down $2 from Mar 23;
Sorghum Downs: $420, down $5 from Mar 23;
Barley Melbourne: $365, down $2 from Mar 23;
ASW wheat Melbourne: $418, down $7 from Mar 23;
SFW wheat Melbourne: $412, down $8 from Mar 23.
(AUD/USD=> US$0.6707 vs US$0.6643 a week earlier).
Local markets continued to move sideways at the end of last week.
Consistent sellers kept shorts happy whilst not flooding the market.
Good rain through most of NSW last week saw the Newcastle/Port Kembla market relax a little. More rain this week heading into Easter will provide a good start for sowing.
As everyone dusts off the tents & the waterproof jackets for Easter camping many are wondering where the El Ninõ hombre has gone.
The 8-day forecast has more rain pencilled in to arrive this week.
South Australia, Victoria and southeast New South Wales are looking to pick up the highest totals. In central and northern NSW, Queensland and Western Australia the rainfall looks to be more coastal, with less than 10mm forecast inland.
On the international trade scene, Jordan has issued a new tender, closing 4 April, for September October delivery, 120,000t optional origin milling wheat and 120,000t feed barley.
Watching this week’s market …
The first week of April starts off with the Export Inspections report.
Overnight, the monthly domestic use reports will be out via the Grain Crushing, Fats & Oils, and Cotton Systems reports.
Monday is also the season’s initial release of the weekly NASS Crop Progress report.
On Wednesday the EIA will publish their weekly ethanol production and stocks report.
Census data for February exports will also be released on Wednesday as well.
On Thursday we will get the weekly Export Sales report.
That’s all, thank you.
We wish you a nice day and a good start to the week.
Author: Sandro F. Puglisi
