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LAST WEEK MARKET COMMENT

Good morning, Farmer Family …

US farm markets, after attempting a bounce, settled red on Friday.

Corn had rallied at the opening, but began a descent after the first hour, with the market flipping red at the end leaving the board 0.14% weaker on the day.

Soybeans closed near their lows, down 1.95%.

The rest of the soy complex was also in the red, with soymeal stumbling 1.21% lower, while soyoil faced more modest cuts of around 0.04%.

Wheat prices were slashed again, suffering a major setback, with KC wheat leding the market lower, down 3.82%.

Minneapolis spring wheat ended the session with 2.96% losses.

Chicago SRW was “the strongest”, dropping by 1.1%.

Concerns over whether US lawmakers will increase the debt ceiling limit, and seasonal pressures, including planting progress in the U.S. and harvest progress in Brazil, prompeted the sell-off, with investors rushing to liquidate their positions ahead of the weekend.

Poor harvest prospects in the U.S. Plains initially gave wheat prices a boost.

However, both corn and wheat prices ended the day on a down note, with July hard red winter wheat at one point touching down to the lowest price seen since May 5.

Notably, CBOT’s most-active soybeans settled 26 cents lower at $13.07-1/4 per bushel, with soymeal ending the day $5 weaker to $409,1 smt, while bean oil was 0.02 $/lb lower, to $47.27.

The most-active corn settled down 3/4-cent at $5.54-1/2 a bushel, while CBOT wheat settled down 6-3/4 cents to $6.05 a bushel.

For the week, corn prices slipped by 5.43% from the prior Friday.

Soybeans slumped 5.96%. 

Soymeal was down 5.5%, and bean oil lost another 4.54% to post fresh 2+ year lows.

The wheat complex was dragged through the mud with the rest of the grains lower.

Kansas City HRW contracts were the leaders to the downside, losing 6.02% during the week, despite posted fresh 2023 highs on Wednesday.

MPLS spring wheat was 4.96% lower.

Chicago SRW was impacted the least of the three exchanges, but still lost a 4.72%.

Monday’s Crop Progress report showed the US corn planting pace was 65% complete as of Sunday 14, 6% faster than the 5-year average.

Emergence was tallied at 30%, 5% above the normal pace.

As for soybean the report showed soybean planting pace at 49% complete by 5/14, vs. the 36% average.

The crop was also 20% emerged, above the 11% 5-year average.

As for wheat, the report showed spring wheat crop planting pace continued to be slow, with just 40% planted, compared to the 57% average.

Meanwhile the winter wheat crop at 49% headed, vs. the 48% average pace.

Condition ratings were unch at 29% gd/ex.

On Monday, we had also monthly NOPA data, with April at a monthly record crush of 173.23 mbu.

Although it was a record crush for the April month, that was a 6.8% decrease month/month and was below the average trade estimate of 174.17 mbu.

Also, soy oil stocks were reported at 1.957b lbs, compared to 1.851b in March and 1.828 billion expected.

Wednesday’s EIA report showed ethanol production bouncing back 22,000 barrels per day in the week ending on May 12, totaling 987,000 barrels per day that week.

Stocks slipped another 100,000 barrels lower to 23.191 million.

On Wednesday, just a day before its expire, the extension for the critical Black Sea shipping deal has been inked, with another 60 days to safely export grains from Ukraine.

That news, along with mostly favorable spring planting weather, and a US large corn sale cancellation, kept global grain prices severely in the red during the week.

On Thursday, USDA’s Export Sales report showed another disappointment for old crop corn at net reductions of 338,974 MT, with the 272,000 MT already known via daily announcements.

New crop sales totaled just 73,998 MT.

That was the second net cancellation in three weeks for old crop, that was just 81% of the new USDA forecast.

The normal 5-year average pace is to be 96% sold by this date.

As for soybean the report showed bean sales dropping to 16,950 MT in the week that ended on May 11.

New crop bookings improved to a MY high 663,801 MT.

Commitments for old crop are 93% of USDA’s forecast total, compared to the 5-year average pace at 99%.

As for the products, weekly soybean meal export sales were 202k MT for 22/23 delivery and 89k MT of forward sales.

That was within the range of estimates.

Soybean oil sales were shown at 856 MT.

That left the total commitments at 118,617 MT.

USDA had old crop bean oil exports penciled in at 200k MT. 

As for wheat the report showed old crop bookings at a MY low net reduction of 42,136 MT.

New crop sales pushed to a MY high of 336,761 MT.

Old crop export commitments are now at 18.985 MMT as of 5/11.

That was still 4% below a year ago and 90% of the USDA full year export projection, vs. the 105% average pace.

Also on Thursday, crop scouts estimated the wheat yield potential in Kansas to be 30 bu/acre (2.0 MT/ha), the lowest recorded since at least 2000, during the annual Wheat Quality Council tour.

The USDA had previously estimated yields at 29 bu/acre (1.9

MT/ha) in Kansas.

However, the tour scouts projected the Kansas harvest to be 178 million bushels (4.8 MMT), lower than the USDA’s estimate of 191.4 million bushels (5.2 MMT) and last year’s crop of 244.2 million bushels (6.6 MMT), with expectations for high abandonment.

That is the lowest production estimate since 1970.

Their results implied additional abandonment with an implied 5.93m acre harvest for Kansas, compared to NASS’s 6.6 million.

Kansas winter wheat was planted on 8.1m acres.

In this context, corn basis bids trended 2 to 5 cents lower at two Midwestern processors while holding steady elsewhere across the central U.S. on Friday.

Soybean basis bids were steady across the central U.S. on Friday.

As for wheat, despite the recent downturn in futures prices following the Black Sea Grain Initiative, basis experienced a mixed performance throughout the week, reflecting light demand.

Notably, in the Gulf, HRS remained flat, while it decreased in the Pacific Northwest (PNW).

Although there have been inquiries for new crop HRS, most buyers are waiting for more harvest information before making purchases.

Gulf HRW also remained unchanged, but it declined in the PNW, showcasing a contrast between Southern Plains HRW and lower-priced Northern Tier HRW.

On the other hand, SRW basis remained flat, even as CBOT futures prices decreased, supported by recent demand.

Meanwhile, SW prices increased to encourage farmer selling.

As a result, as for May 18, 2023, FOB prices for US wheat No 2 Hard Red Winter (HRW) were at $376/mt, up $6/mt week on week.

US wheat No 2 Soft Red Winter (SRW) was valued at $252/mt, down $6/mt from prior week.

Northern Durum offers from the Great Lakes, for June 2023 delivery were at $10.07/bu ($370.00/mt, unch), unchanged.

As for corn, US corn 3YC (Gulf) was at $249/mt, down $20/mt.

As for soybean, US soybean 2Y (Gulf) quoted at $524/mt, down $27/mt.

The weekly Ethanol report showed the cash average ethanol price was mostly higher from 2 to 9 cents/gal for the week, ranging $2.30 to $2.45/gal regionally.

Corn oil quotes varied within 3 cents of prior week from 53 to 57 cents/lb regionally.

USDA noted the DDGS market as mostly firm within $15/ton of last week.

Prices ranged from $220/ton in Ohio to $280 in Kansas.

USDA reported the weekly cash B100 price 24 cents weaker in MN to $3.82/gal.

After the sessions close, weekly Commitment of Traders data showed net spec fund buying corn through the week that ended 5/16.

Notably, as of the Tuesday close, managed money added 12.3k new longs and closed 5.4k existing shorts.

That reduced their net short in corn to 91,985 contracts.

The commercials added 52k new hedges through the week, but only extended their net short by 4.5k contracts to 117,725.

As for soybean, the report showed net new selling from the soybean spec traders.

The funds added 16.6k new shorts and closed 8k existing longs through the week, weakening their net long to just 23,942 contracts, the lowest since November 2021.

The commercial soybean hedgers closed out 11.4k shorts and added 20.7k new longs which weakened their net short to 97,755 contracts as of 5/16.

As for wheat, report showed managed money firms were 4,137 contracts less net short in Chicago wheat through the week that ended 5/16.

The group was still at a 112,769 contract net short.

Speculative funds were short covering in KC wheat, extending the groups net long by 9k contracts to 16.6k.

Managed money was shown at a 4,838 contract net short in Minneapolis wheat as of 5/16.

That was 3,480 contracts weaker through the week given net new buying.

On this morning, Chicago wheat prices fell below $6 a bushel for the first time in more than two years.

Corn and soybeans also inched lower.

Notably, wheat tumbled another 1.28% to $5.96-3/4 a bushel, corn fell 0.1% to $5.54-1/4 a bushel and soybeans lost 0.1% to $13.05-3/4 a bushel.

Global wheat market seems to be well-supplied even though there are some worries around the U.S. winter crop.

Also, the Group of Seven rich nations on Friday called on all participants of the Black Sea Grain deal “to continue and fully implement its smooth operation at its maximum potential and for as long as necessary”.

In the soybean market, China’s imports from Brazil fell 16% in April compared with the same month a year ago, data showed on Saturday, keeping supplies from the South American nation well behind last year’s level after delays to its harvest.

In energy markets, oil prices fell on Friday, as investors worried that U.S. politicians will fail to agree on a new debt ceiling and trigger a default that would hurt the economy and reduce fuel demand.

Thus, Brent futures settled 28 cents, or 0.8%, lower at $75.58 a barrel, while West Texas Intermediate U.S. crude for July expiry fell 25 cents, or 0.3%, to $71.69.

The less active U.S. crude contract for May , due to expire today, closed down 31 cents, or 0.4%, to $71.55.

Brent and U.S. crude prices nevertheless notched their first weekly gains in a month, with the both benchmarks rising about 2%.

Oil gave up gains of as much as a dollar after Republicans in the U.S. House of Representatives and President Joe Biden’s administration on Friday paused talks on raising the federal government’s $31.4 trillion debt ceiling.

Markets were also spooked by Federal Reserve Chair Jerome Powell’s comments that inflation was “far above” the Fed’s objective, adding no decisions had been made yet on the next interest rate action.

Following reports of the paused debt ceiling negotiations and Powell’s comments, U.S. stocks, Treasury yields and the dollar all moved lower.

Meantime, money managers cut their net long U.S. crude futures and options positions in the week to May 16, the U.S. Commodity Futures Trading Commission (CFTC) said.

On this morning, oil prices slipped, as caution around the U.S. debt ceiling talks and concerns about demand recovery in China offset support from lower supplies from Canada and OPEC+ producers.

Notably, Brent crude futures fell 48 cents, or 0.6%, to $75.10 a barrel by 02:01 GMT while U.S. West Texas Intermediate (WTI) crude for July delivery, the more actively traded contract, fell 45 cents, or 0.6%, to $71.24.

The June WTI contract , which expires later on Monday, fell 52 cents to $71.03 a barrel.

However, the resumption of U.S. debt ceiling negotiations later on Monday will remain a key driver for crude and risk sentiment this week.

U.S. oil rig count, an indicator of future production, indeed fell by 11 to 575 past week, the biggest weekly drop since September 2021, energy services firm Baker Hughes Co said.

“A slowdown in U.S. drilling activity is a concern for the oil market, which is expected to see a sizeable deficit over the second half of this year,”

The impact of voluntary production cuts by the OPEC+, is also being felt.

Total exports of crude and oil products from the group indeed plunged by 1.7 million barrels per day (bpd) by May 16, JP Morgan said, adding that Russian oil exports will likely fall by late May.

In its latest monthly report, the IEA warned of a looming shortage in the second half when demand is expected to eclipse supply by almost 2 million bpd.

In ocean freight markets, the Baltic Exchange’s main sea freight index fell for a seventh straight session on Friday, posting its worst week in more than three months, weighed down by declining rates across larger vessels.

The overall index, indeed, fell 18 points, or 1.3%, to 1,384 points – its lowest since April 19.

The main index was down 11.2%, its worst since the week ending Jan. 27.

Notably, the capesize index dipped 37 points, or 1.7%, to over three-week low at 2,105 points.

For the week, the capesize index was down 14.3%, its first weekly loss in five.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, decreased $308 to $17,459.

The panamax index was down 13 points, or 1.1%, at 1,222 points and dropped 12.8% for the week, its worst since the week ended on Jan. 13.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $111 to $11,001.

Among smaller vessels, the supramax index shed 8 points to 1,077 points.

In equity markets, U.S. stocks closed out the trading week on a soft note on Friday.

U.S. debt ceiling negotiations in Washington were paused, denting optimism a deal could be reached in coming days to dodge a default.

Republican negotiators, indeed, abruptly walked out of talks with White House officials, and House Speaker McCarthy said the talks were at a “pause.”

Meanwhile Federal Reserve Chair Jerome Powell talking at a monetary policy panel, said, “while the financial stability tools helped to calm conditions in the banking sector, developments there on the other hand are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring, and inflation. As a result, interest rates may not need to rise as much as they would have otherwise to achieve our goals.” 

Powell also signaled he is inclined to pause rate increases at the June FOMC meeting when he said, “Policymakers can afford to look at the data and the evolving outlook to make careful assessments.”

However, the interest rate outlook remained uncertain.

Thus the 10-year T-note yield rose to a 2-month high of 3.719% and finished up +4.8 bp at 3.694%.

The two-year Treasury yield, which moves more on expectations for Fed action, climbed as high as 4.33% before Powell began speaking.

It later fell back to 4.25%, down from 4.26% late Thursday.

Also dampening sentiment more was a CNN report that U.S. Treasury Secretary Janet Yellen told bank CEOs on Thursday that more bank mergers may be necessary after a series of bank failures.

As a result, the Dow Jones Industrial Average fell 109.28 points, or 0.33%, to 33,426.63, the S&P 500 lost 6.07 points, or 0.14%, to 4,191.98 and the Nasdaq Composite dropped 30.94 points, or 0.24%, to 12,657.90.

For the week, the Dow gained 0.38%, the S&P 500 climbed 1.65% and the Nasdaq advanced 3.04%.

The S&P 500 and Nasdaq notched their biggest weekly percentage gains since the final week of March.

In Asia, Japan’s Nikkei 225 rose 0.8% to its highest close in about 33 years, on Friday.

Data on Japan’s consumer price index for April showed a rise of 3.4% from the previous year, indicating inflationary pressures were subsiding.

Chinese stocks struggled.

Hong Kong’s Hang Seng fell 1.4% and Shanghai’s index slipped 0.4%.

European markets rose.

On this morning, Asian shares mostly drifted higher.

Japan’s benchmark Nikkei 225 was little changed in morning trading, gaining nearly 0.1% to 30,833.94. 

Australia’s S&P/ASX 200 slid 0.3% to 7,261.40. 

South Korea’s Kospi gained 0.9% to 2,560.16. 

Hong Kong’s Hang Seng jumped 1.2% to 19,691.82, while the Shanghai Composite edged up 0.1% to 3,287.30.

In currency trading, the dollar index fell 0.36%, with the dollar slippinig after the snag in US debt ceiling talks and on dovish Powell comments.

Notably, the EUR/USD rose by +0.32% to $1.0803, with the euro Friday shook off early losses and moved higher.

Hawkish ECB comments from ECB President Lagarde and ECB Executive Board member Schnabel also supported the euro. 

EUR/USD initially had weakened after the German Apr PPI rose at the slowest pace in 2 years, a dovish factor for ECB policy.

The Japanese yen strengthened 0.57% versus the greenback to 137.96 per dollar, with the yen moving higher on dollar weakness and stronger than expected Japanese inflation news that showed Japan’s Apr national CPI ex-fresh food and energy rose at the fastest pace in 41 years. 

Higher T-note yields Friday limited the upside in the yen, along with dovish comments from BOJ Governor Ueda, who said the BOJ would take its time when deciding on monetary policy adjustments.

Meanwhile sterling was last trading at $1.2446, up 0.31% on the day.

On this morning, the U.S. dollar slipped to 137.65 Japanese yen from 137.96 yen.

The euro cost $1.0823, up from $1.0803.

Going to analyse other ag markets …

From Canada, as of May 15, the Saskatchewan government estimated 38% of the province’s crops are seeded, up from 9% reported as of May 8 but well below the five-year average of 53%.

The pace relative to the five-year average has remained steady, with current progress estimated to be 15 percentage points behind average, while the prior week, progress was reported at 14 percentage points below average.

An estimated 29% of the crop was planted over this period, which is close to the average of 30% seeded over those week during the past five-years.

Progress was most advanced on the west side of the province, with 43% of the Southwest Region complete, up 30 percentage points over the prior week, while 54% of the West-Central region was complete, up 40 points over the prior week and 55% of the Northwest Region, up 38 points from the prior week.

This compares to the Southeast Region at 18% complete, up 15 points over the prior week, the East-Central region at 21% complete, up 18 points and the Northeast Region at 35% complete, up 28 points over.

When compared to the five-year average, the Southeast Region is 33 points behind, the Southwest Region is 20 points behind average and the East-Central Region is 12 points behind.

At the same time, the West-Central Region was 4 points ahead of average, the Northeast Region was 6 points ahead of average and the Northwest Region was 16 points ahead of average.

Progress for select crops was seen at 43% for spring wheat (54.6%), 38% for durum (65.6%), 19% for canola (44.8%) 54% for peas (77.8%), 50% of the lentils (76%) 38% of the barley (46.6%), 19% of the oats (33.6%) and 7% of the soybeans (38.2%), with the five-year average in brackets.

During that period, the area of the province rated as having adequate topsoil moisture fell 3 points to 69% while the area rated as short topsoil moisture increased by 3 points to 24% or the province.

Meantime, the Grain Statistics weekly report showed producers’ deliveries of common wheat at 125,6k mt in the week 41 of this shipping season.

That was down from 214,5k mt posted prior week.

Deliveries of durum wheat, were also weaker at 27,3k mt, compared with 53,2k mt showed in prior week.

Canada exported 372,5k mt of common wheat in week 41.

That was up from 334,3k mt of a week earlier.

Durum wheat exports, in contrast were lower, moving down from 89,6k mt to 57.5k mt.

Total Commercial Stocks of common wheat stood at 1.974,5k mt.

That was down from 2.171.4k mt posted in week 40.

Total durum commercial stocks, were also weaker, moving down from 377,8k mt a week earlier, to 353,4k mt.

Cumulative exports for common wheat were at 15.981,3k mt.

That is compared 9.038,3k mt a year ago.

Durum cumulative exports reached 4.381,1k mt vs 2.000,1 a year ago.

In this context, as of May 19, the 1CWAD (Canadian durum wheat with 13,5% protein) average regional price was at C$402.57/t.

The 1 CWRS (Canadian common wheat with 13,5% protein) average regional price was at C$370.41/t.

Also, a Saskatchewan broker reported feed barley ranging from C$333/mt to C$367.44/mt picked up on farm in Saskatchewan past week, while the Saskatchewan government reported C$337.92/mt delivered to the elevator.

The same broker pointed to new crop at C$275.58/mt to C$298.55/mt.

(USD/CAD = $1.3494) 

From South America, Dr Michael Cordonnier has raised his Brazilian soybean crop estimate another 1Mt to 155Mt, noting yields in Rio Grande do Sul ended up a little better than expected.

Meanwhile, Brazil’s Safras & Mercado is now estimating the country’s 2022/23 soybean production will reach 155.67 MMT.

That’s slightly above its prior projection of 155.07, and it’s one of the more bullish estimates on record right now.

Dr Cordonnier also raised his Brazilian corn crop estimate 1Mt to 125Mt, noting the safrinha crop is one week closer to the end of the growing season without a major frost or freeze.

Developing dryness in some central and southern areas is keeping his Brazilian corn estimate conservative compared to others.

Meantime, Brazil’s Anec is expecting an uptick in the country’s corn exports in May after increasing its estimate from 320k MT a week ago up to 571,500 t.

Brazil’s Anec slightly raised its projection for the country’s soybean exports in May, which it now estimates will reach 15.76 MMT.

Brazil expects the country to export an additional 2.6 million metric tons of soymeal this month.

In Argentina, Dr Cordonnier left his (2022/23) crop estimates for Argentina at 23Mt for soybeans and 35Mt for corn.

The Buenos Aires grains exchange on Thursday cut its estimate for the 2022/23 soybean harvest to 21 million tonnes, from a previous estimate of 22.5 million tonnes.

“There have been significant losses in the area farmers can harvest for second (late-season) soybeans,” the exchange said in its weekly report, adding that the country’s farmers have harvested 69.2% of the suitable area planted with the oilseed.

Conditions were rated 44pc fair/excellent.

Harvest in the centre was drawing to a close, with lower-than-expected yields reported.

Rosario had their figure at 21.5 MMT and USDA is at 27 MMT.

Meanwhile, BAGE maintained its estimate for 2022/23 corn production at 36 million tonnes, however still well below the 50 million tonnes collected in the previous season.

The Exchange also reported that for the week ending 17 May 2022-23 maize harvest reached 25pc complete with conditions rated 47pc fair/excellent.

BAGE also forecasted Argentina’s 2023/24 wheat harvest at 18 million tonnes, up 45% from the 12.4 million tonnes harvested last season (2022/23) as the country faced a historic drought.

Wheat planting is forecast to increase 3pc to 6.3M hectares.

No change was seen by the Exchange from last season’s barley area, but better weather would boost production 32pc from last year to 5Mt.

Argentina’s Ag Ministry has pegged 2023-24 wheat planted area at 6.1m ha (5.9m ha previous year) and barley area pegged at 1.6m ha (1.8m ha). 

In this context, as of May 18, price for Argentina wheat Grade 2 quality, delivered Up River was at US$376/t.

Price for Argentina feed corn (Up River) was at US$248/t.

Price for Argentina feed barley (Up River) was at US$240/t.

Price for Argentina soybean (Up River) was at US$514/t.

Price for Brazilian feed corn (Paranagua) was at US$228/t.

Price for Brazilian soybean (Paranagua) was at US$465/t.

In Europe, Friday grain prices recovered some losses suffered in the previous days after hitting a 19-month low, while rapeseed fell to a two-year low.

However, all ag markets tumbled over the week, among the extension of Black Sea deal and the approaching of harvests in the northern hemisphere, as buyers are waiting for the usual harvest pressure to hedge.

European Commission data showed EU’s cumulative soft-wheat exports were at 27.2Mt as of May 14, compared with 24.3Mt the previous year.

Leading destinations include Morocco on 4.24Mt, Algeria on 3.84Mt and Nigeria on 2.32Mt.

EU barley exports, in contrast, fell to 5.8Mt, compared with 6.73Mt the previous year.

Corn imports were at 23.6Mt, compared to 14.3Mt over the same period in 2021-22.

Soybean imports were down 12% so far after reaching 11 MMT through May 14. The United States, Brazil, Ukraine, Canada and Uruguay are the top five suppliers.

Soymeal imports were trending 4% lower year-over-year, with 13.67 million metric tons.

Rapeseed imports were at high levels, currently at 6.92 million tonnes against 4.80 last year.

Meantime, according to the Ministry of Agriculture, grain maize areas in France will be down sharply this year, estimated at 1.25 million hectares, down 7.6% compared to last year, a consequence in particular of irrigation restrictions.

On the other hand, Farm office FranceAgriMer on Wednesday lowered its forecast of French soft wheat exports outside the European Union in the 2022/23 season to 10.30 million tonnes from 10.40 million projected in April.

In a monthly supply and demand outlook for major cereal crops, the office also trimmed its forecast of 2022/23 French soft wheat exports within the 27-member bloc to 6.39 million tonnes from 6.43 million previously.

It increased its projection of French soft wheat stocks at the end of the season on June 30 to 2.72 million tonnes from 2.61 million projected last month.

On Friday, FranceAgriMer reported the condition of French soft wheat fell slightly in the week to May 15 but remained at its highest level in at least a decade.

Notably, an estimated 93% of soft wheat was in good or excellent condition compared with 94% the previous week.

The score was above the 73% registered a year earlier and the highest for the time of year in FranceAgriMer data going back to 2011.

The good/excellent rating for winter barley shed 2 percentage points in the latest week to 90% while the durum wheat score eased by one point to 87%.

The corresponding spring barley rating was unchanged from the previous week at 95%.

Grain maize sowing was nearing completion, with 88% of the expected area planted.

This year’s sowing, which has been hampered by recent wet and cool weather, was lagging the 97% achieved by the same stage last year and a five-year average of 93%, FranceAgriMer said.

French farmers are estimated to have made a sharp reduction to the maize area this year, partly in response to severe drought last year.

Also on Friday, Germany’s national statistics agency estimated winter wheat sown area for the 2023 harvest has been reduced by 1.4% to about 2.85 million hectares, .

German farmers have partly turned to winter rapeseed, with sowings for the 2023 crop expanded by 7.6% to some 1.16 million hectares, the agency said.

Sowing by German farmers of winter barley was raised by 5.2% to 1.27 million hectares, the agency said.

Plantings of grain maize were cut 6.1% to 429,000 hectares.

Sowing of silo maize rose 2.1% to 2.06 million hectares.

Plantings of rye and other minor winter grains were expanded by 4.0% to 611,400 hectares.

Sowing of spring grains was reduced, partly as Germany’s mild winter meant there was less need to replant other frost-damaged crops.

Plantings of spring barley were cut 11.2% to 329,300 hectares.

From North Africa, Tunisia will import about 95% of its grain needs this season for the first time due to a severe drought, an official at the agriculture union said on Friday, a decision which will add to the country’s exhausted public finances.

Mahamed Rajaibiya said that the grain crop will be only 250,000 tonnes, compared to 750,000 tonnes last year.

Tunisia’s annual needs is about to 3.4 million tonnes.

From Ukraine, according to the Ukrainian Grain Association, corn production will fall 23 percent to 21 million tonnes (Mt) and exports in 2023-24 will plunge 30pc to 19Mt.

For wheat, UGA forecasts production of 17Mt, down 16pc from last year, while exports for 2023-24 are expected to fall 10pc to 14Mt.

Sunflower seed production is expected to jump 20pc to 13Mt.

However, the Ukrainian agriculture ministry said on Wednesday, Ukraine is likely to sow a record of 285,000 hectares to spring wheat in 2023.

Farmers have already sown 247,000 hectares of the commodity, it said in a statement.

Ukrainian 2023 spring grain sowing was 86% complete at 4.7 million hectares on May 18, agriculture ministry data showed on Friday.

The ministry has said the overall spring grain sowing area could shrink to 5.5 million hectares in 2023 from 5.9 million in 2022.

The total sown area at May 18 included 256,900 hectares of spring wheat, 759,600 hectares of barley, 132,700 hectares of peas, 143,100 hectares of oats and 3.3 million hectares of corn.

The ministry said farmers had also sown 207,400 hectares of sugar beet, almost 4 million hectares of sunflowers and 1.3 million hectares of soybeans. 

From Russia, the head of the RusAgroTrans sees Russia’s 2023 wheat harvest at 84.1Mt, Interfax reported, citing comments made at Rusgrain conference in Sochi.

The forecast was revised up by 1.6Mt in May thanks to the improved situation in the south, Volga and Central regions.

They see total grain harvest in Russia at 129.8Mt.

Russian total grain exports from July 2022-April 2023 are at a record 50.7Mt, including 41Mt of wheat.

RusAgroTrans expects total grain exports in 2023-24 to be 59.3Mt, including wheat at 48Mt.

Meantime, Agriculture Minister Dmitry Patrushev reported on the progress of spring field work to President Vladimir Putin on Thursday.

By May 18, 33.2 out of 57 million hectares had been seeded and is proceeding at a faster pace than average.

Thus, the total sown area in 2023 will exceed 85 million hectares including winter wheat area.

Winter wheat condition saw 93% of winter crops came out of wintering in a normal state.

In this context, Russian grain exports will total around 50-55 million tonnes in the 2023-2024 season, the Ministry said.

Patrushev said that Russia’s 2023 wheat crop was seen at 78 million tonnes.

The total grain harvest would be at least 123 million tonnes, he said.

“This volume will allow us to fully ensure the balance in the market, meet domestic demand and continue to develop our export potential,” Patrushev said.

Putin said grain exports could total 55-60 million tonnes for the 2022-2023 year, though he added there was a lot of grain supply on the global market.

On Friday, Russian consultancy Sovecon also raised its estimates for the country’s 2023 wheat production potential to 87.99 MMT, which is a bit higher than its prior projection of 86.79.

In this context, Russian origin prices are still losing ground.

According to Argus Media, wheat is quoted at 242 USD/t in FOB Novorossiysk.

From the Middle Kingdom, Chinese customs data had 1 MMT of corn imported during the month of April.

That was down 55% from April ’22 and set their YTD imports at 8.52 MMT.

Arrivals from the United States fell to 53,099 tonnes, down from 1.51 million tonnes a year ago. 

Ukraine was the dominant supplier.

As for soybean, imports from Brazil fell 16% in April compared with the same month a year ago.

Notably, China imported 5.3 million tonnes of the oilseed from Brazil, versus 6.3 million tonnes a year earlier, General Administration of Customs data showed.

So far this year, imports from Brazil remain 28% behind that of a year ago, with 9.21 million tonnes in the first four months, compared with 12.7 million tonnes in the same period of 2022.

Imports from the United States, in contrast, continued to edge higher, rising by 11% in April from the year before to 1.82 million tonnes.

U.S. shipments for this year so far stand at 18.24 million tonnes, compared with 15 million tonnes last year.

As for wheat, Chinese customs data showed 1.68 MMT of wheat imports for April.

That was more than double the same volume last year and set their YTD total at 6.03 MMT – a 61% increase over last year’s pace.

Meantime, China’s Dalian Corn Prices were stronger on Friday with a 20 yuan rally to 2,540 yuan/MT (~ $9.20/bu).

For the week, old crop May fell 5 yuan (~ 2 cents) but new crop November was up by 9 (~ 3 1/2 cents).

China’s Dalian No2 Soybean Prices were weaker this week, dropping 51 yuan (~20 cents/bu) to 4,055 yuan/MT (~$15.75/bu).

From Australia, local markets continued to remain steady leading into the weekend, with bids mixed again across the country. 

WA wheat remained largely unchanged with old crop ASW1 still trading around $370-385/t range through Albany and Esperance, Barley in WA also saw some late interest and traded around $295/t FIS in Kwinana Port Zone. 

Over in the East feed grains in the Northern part of the country still remain very firm, while things were unchanged in Port Kembla zone and Victorian wheat and barley prices were a touch softer through the delivered homes. 

Canola had a little bounce on old crop bids to finish the week off but liquidity remains quiet.

GIWA’s latest crop report released on Friday reports that seeding in WA will wind up for most growers by the end of next week. 

Historically this will be an early finish and is a reflection of the early rains in March and the reduction in area sown in the dry areas. 

The hesitancy to not over-commit on the back of a couple of good years, has been reflected in the reduction in area of lupins, beans and chickpeas, and the higher risk crops such as canola (area down 18pc) being substituted to wheat or left out to pasture or fallow. 

As a result, the total cropped area is likely to be back around 8pc at the 8.2 to 8.3 million hectare mark. 

Wheat area will be back slightly from 2022 to 4.39 million hectare, due to the ongoing dry conditions in the north of the state, and the low-rainfall fringes further south opting for an increase in fallow from 2022.

Barley area will be back slightly to 1.54 million hectare, from the substitution to wheat which has continued on in a once barley dominated region of the state.

However, those numbers could increase slightly if more rain falls over the next few weeks. 

IGC May forecast

The IGC released their May forecast on Thursday.

Notably, they lowered its forecast for EU wheat production in 2023/24 by one million tonnes to 136.8 million.

The cut was driven by a downward revision for Spain, which has been suffering from drought, to 5.6 million tonnes from 7.0 million.

World wheat production is revised down by 4 million tonnes to 783 million.

The cut was driven by a downward revision for the United States to 45.2 million from 49.4 million.

22/23 ending stock of 282.9 MMT shrinking to 271 MMT at the end of 23/24.

That itself was down by 6 MMT on a 5 MMT production cut (mainly via U.S.).

As for corn, the IGC revised upwards its estimate of world maize production for the next campaign to 1.217 billion tonnes, against 1.208 estimated last month, and a 272.3 MMT carryout.

This is mainly the result of an increase in production in Brazil, now estimated at 130.2 million tonnes.

China production was also increased.

The global corn crop was now seen well above the prior season’s 1.153 billion with 265.6 MMT carryout, but still slightly below the record set in 2021/22 of 1.223 billion

As for soybean, the International Grains Council expects Argentina’s old crop bean production is 23 MMT.

Global production was set at 369.1 MMT for 22/23.

IGC raised their outlook for new crop by 2.2 MMT to 403.3.

Ending stocks were shown as 50.2 MMT and 64 for 22/23 and 23/24 respectively.

The IGC forecast total grains production in 2023/24 at 2.294 billion tonnes, up from a previous projection of 2.291 million and now marginally above the 2.293 billion harvested in 2021/22.

Watching this week’s market … 

Monday in the afternoon, we get Export Inspections data, with the NASS Crop Progress report overnight after the sessions close.

Fast Forward to Wednesday and the EIA will publish their weekly ethanol production and stocks report.

That afternoon NASS will release the monthly Cold Storage report.

Thursday in the afternoon, is the weekly Export Sales report release per usual.

May feeder cattle futures and options also expire on Thursday. 

Finally on Friday, June serial grain options will expire.

That will begin Memorial Day weekend.

That’s all, thank you.

We wish you a nice day and a good start to the week.

Author: Sandro F. Puglisi

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