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LAST WEEK MARKET COMMENT

Good morning, Farmer Family …

US farm markets evaporated quickly on Friday.

Corn prices plummeted 4.50% lower.

Soybeans were down 0.4% in the front month, but Aug lost 1%, and Nov contract was 2.2% lower at the bell.

The rest of the soy complex was mixed, as soymeal prices tumbled by 3.3%, while soyoil rebounded with 3,89% gains.

Wheat prices faced variable losses, as Chicago SRW dropped 0.78%, Kansas City HRW fell 1.38%, and MGEX HRS lost 1.73%.

Corn and soybean fell to one-week lows, pressured by forecasts for beneficial rains in the U.S. Midwest.

The latest weather projections pointed to significant rain in parts of the Midwest and Plains, with a band stretching from the Dakotas through Ohio likely to gather another 1” or more until Tuesday.

Also, the new 8-to-14-day outlook predicts seasonally wet weather for most of the central U.S. between June 30 and July 6, with warmer-than-normal temperatures also likely during that time.

That, analysts said, could bolster the condition of crops before key growth stages this summer.

Meantime, wheat prices also were lower, with traders locking in profits from a rally that has pushed prices higher for five weeks in a row.

On the demand side, lackluster export sales data and weakness in the cash market, added to the bearish tone.

The weekly FAS report indeed showed 35,988 MT of old crop corn was sold during the week that ended 6/15.

That was at the low end of estimates and included some cancelations.

The new crop export sales business came in at 47k MT, which was also at the low end of estimates.

Old crop commitments were at 38.65 MMT as of 6/15, while new crop has 3.03 MMT on the books.

Export commitments are still just 88% complete vs. the 5-year average of 100%, and sales are the problem, with shipments at 77% of the forecast vs. the 81% normal pace.

As for soybean, data showed 457,543 MT of old crop soybeans were sold during the week that ended 6/15.

That was inline with the 100k-600k MT expected but was down 4% for the week.

Old crop commitments were marked at 52.11 MMT as of 6/15.

USDA reported the week’s new crop sales were 168.8k MT for a total forward book of 3.33 MMT.

Commitments for old crop are now 96% of the USDA forecast, compared to the 5-year average pace at 102%.

The weekly update had 135k MT of meal sold for 22/23 delivery and 11k for 23/24.

That left old crop soymeal commitments at 11.5 MMT, a 4% lead over last year’s pace.

Soy oil bookings were 209 MT for the week, leaving the total commitment at 128.5k MT.

As for wheat, USDA reported weekly wheat Export Sales were 123,853 MTs.

That included 14.2k MT sold for 24/25 delivery to Peru and Ecuador.

With 3 week’s of reporting the wheat commitments trail last year’s pace by 23% with 4.06 MMT on the books.

That is 19% of the USDA full year export projection, vs. the 27% average pace.

It is still early but things are getting off to a very slow start.

For the week, corn prices had a wild week.

July slipped lower since the prior Friday by 1.48%.

New crop December was down the same.

Soybeans had mixed action on the week, with old crop increasing by 1.91%.

New crop November, however, was down 2.4% from the prior Friday.

The products gave no support to the bulls, as meal was down 1.37%, and bean oil lost 2.93%.

The wheat complex was held back by the weakness on corn but held their own.

Chicago SRW led the bull charge, gaining another 6.58%.

Kansas City HRW tagged along with a 2.02% gain.

MPLS was up 1.32% on the week.

Crop Progress data showed condition ratings dropping 6% as of a week earlier to 55% gd/ex.

As for soybean, crop conditions were pegged at 54% gd/ex (-5% on the week).

As for wheat, the report indicated the spring wheat conditions fell 9% to 51% gd/ex.

Condition ratings for winter wheat crops were unch at 38% gd/ex.

Meanwhile winter wheat crop was at 15% harvested, behind the 20% average pace.

Wednesday’s EIA release showed ethanol production building back up by 34,000 barrels per day in the week ending on June 16, to 1.052 million bpd.

Stocks were back up 578,000 barrels to 22.804 million.

Meantime, the EPA finalized the RFS volumes for 2023-25.

Corn based ethanol was held at 15.25b gallons for 2023, but was reduced to 15b flat for ’24 and ’25.

In addition, EPA concluded that 250 of the 500m gallons from 2016 were illegally waived in 2022.

As for biomass-based diesel, it was set at 2.82b gallons for 2023, 3.04b for ’24, and 3.35b for ’25.

The proposed amounts were 2.89 and 2.95 billion gallons for 2024 and 2025 respectively.

However, the industry had hoped for larger mandated use, to support the new crush plants currently under construction. 

On the cash market front, spot basis bids for both corn and soybeans have tumbled at processors and elevators past week as a spate of heavy farmer selling has satisfied demand at grain terminals around the Midwest.

Notably, corn basis bids were steady to soft after dropping 3 to 5 cents lower at three Midwestern ethanol plants and trending 5 cents lower at a Nebraska elevator.

Soybean basis bids were mostly steady across the central U.S. on Friday but did tilt 10 cents lower at an Indiana processor.

As for wheat, basis ended the week mixed.

Traders note thin markets with little export demand, and farmers are busy with fieldwork, resulting

in low farmer sales and creating little opportunity for price discovery.

HRS basis was down in the Gulf and flat in the PNW.

The week’s rally incentivized some sales from the farmer; however, export demand remains light.

HRW was down in the Gulf and the PNW as the increased futures prices and harvest pressure eroded basis levels. SRW basis was down, also weighed by the rally.

SW prices increased tracking Chicago wheat futures.

As a result, as for June 22, 2023, FOB prices for US wheat No 2 Hard Red Winter (HRW) were at $362/mt, up $21/mt week on week.

US wheat No 2 Soft Red Winter (SRW) was valued at $292/mt, up $29/mt from prior week.

Northern Durum offers from the Great Lakes, for June 2023 delivery were at $9.93/bu ($365.00/mt, -$5/mt), down $0.14/bu.

As for corn, US corn 3YC (Gulf) was at $282/mt, up $14/mt.

As for soybean, US soybean 2Y (Gulf) quoted at $575/mt, up $24/mt.

The weekly Ethanol report quoted cash market values from $2.42 to $2.55 regionally, mostly 7 to 12 cents/gal higher.

The DDGS were quoted mostly $5 to $20 higher from $200 in IA to $225/ton in MO.

Corn oil cash quotes ranged 58 to 63 cents/lb, and were mostly steady to 3 cents higher for the week.

USDA reported the B100 cash price 9c higher to $4.90/gal in MN and at $6.07/gal in IL for the week.

After the sessions close, as for corn, the weekly CFTC report had managed money as net buyers, with 32.2k new longs added and 24k shorts closed, during the week that ended 6/20.

That left the group at 58.3k contracts net long.

Commercials added 64k new short hedges which, in addition to the fewer long hedges in play, extended their net short by 75k to 283k contracts.

As for soybean, the report put managed money firms at a 76,950 contract net long for 6/20.

That nearly 30k contract stronger net long came by way of 15k fewer shorts and 14.1k new spec longs for the week.

The commercial soybean traders extended their net short by 27k contracts to 125.5k.

CFTC data had the spec traders 3k contracts more net long in soymeal by way of short covering through the week.

The funds were 29.8k contracts net long in soy oil after strong short covering through the week.

Spec traders have reduced their short exposure in soy oil by 70% so far in the month of June.

As for wheat, data release showed spec short covering in SRW wheat for the week that ended 6/20.

The group closed 31k shorts and held an 84,134 contract net short as of Tuesday’s settle.

The report had managed money funds with a 5,944 contract net long on 6/20 after a week of short covering.

Minneapolis spec traders were 4,160 contracts less net short to 3,262 contracts.

On this morning, corn prices slid for a third consecutive session to their lowest in one week.

Wheat, in contrast, rose around 1% with tightening global supplies supporting prices.

Notably, the most-active corn contract on the Chicago Board of Trade fell 0.3% to $5.86-1/4 a bushel, as of 03:51 GMT, having dropped to its lowest since June 16 at $5.75-1/2 a bushel earlier in the session.

Wheat added 0.9% to $7.53 a bushel while soybeans were largely unchanged at 13.10-1/4 a bushel.

From Canada, the Saskatchewan crop report for the week ending 19 June reports plantings are essentially complete, with recent rainfall throughout the province replenishing topsoil moisture.

The majority of crops are in normal stages of development for this time of year.

Dry conditions in the west have induced environmental stress in crops, hastening their development.

Eastern regions received more moisture during the spring, resulting in some localised flooding and developmental delays.

Overall, topsoil moisture increased over the week to 69 percent versus 66pc in the previous week, and 75pc at this time last year.

The Manitoba Agriculture, Food and Rural Development crop report, for the week ending June 20 noted that sporadic showers across the province made little contribution to crop-moisture maintenance, with only some parts of the north-west receiving significant rains.

Especially dry conditions are noted in the central, Interlake and north-west regions.

However, crops have shown rapid development and remain in generally good condition, except for later-planted fields.

Ahead of the StatsCan acreage survey results, traders are looking for between 25.6m acres and 27m acres of 23/24 wheat.

The average estimate is to see 26.5m acres compared to the 25.2m planted last season.

Of that, durum is estimated at 5.9m acres.

Canada’s StatsCan Acreage survey is expected to show a 300k acre increase yr/yr to soybean area.

The full range of estimates is from 5.3m acres to 5.8.

Canola area is estimated at 21.8 million on average compared to 21.4 last season.

StatsCan will release the results on 6/28.

Meantime, the Grain Statistics weekly report showed producers’ deliveries of common wheat at 444,7k mt in the week 46 of this shipping season.

That was up from 423,6k mt posted prior week.

Deliveries of durum wheat, were also higher at 111,5k mt, compared with 89,2k mt showed in prior week.

Canada exported 384,1k mt of common wheat in week 46.

That was up from 292,2k mt of a week earlier.

Durum wheat exports, were also higher, moving up from 35.9k mt to 137.3k mt.

Total Commercial Stocks of common wheat stood at 1.998,5k mt, down from 2.117,4k mt in the previous week.

Total durum commercial stocks also were weaker, moving down from 304,3k mt a week earlier, to 259,0k mt.

Cumulative exports for common wheat were at 17.414,1k mt.

That is compared 9.949,0k mt a year ago.

Durum cumulative exports reached 4.747,3k mt vs 2.288,1 a year ago.

In this context, as of June 23, the 1CWAD (Canadian durum wheat with 13,5% protein) average regional price was at C$391.22/t, up C$0.04/t.

Meanwhile durum wheat price –CA St Lawrence (CWAD) was offered at US$370/t FOB, up C$5/t from a week earlier.

The 1 CWRS (Canadian common wheat with 13,5% protein) average regional price was at 395.70/t, up C$7.69/t.

(USD/CAD = $1.3180 down from $1.3196 the prior week).

From Central America, the Mexican government has decided to implement a 50% tariff on white corn imports, pursuing more protectionist measures and trying to keep genetically modified grain out of the country’s tortillas after a six-month waiver on duties.

The 50% import tariff will be in place until Dec. 31.

From South America, Brazil’s Anec estimates that the country’s corn exports will reach 1.5Mt in June, which is 100,000t below the group’s prior projection from a week ago.

Anec also estimates that the country’s soybean exports will reach 14.3Mt in June, which is 500,000t below its prior projection from last week.

Anec also expects to see Brazilian soymeal exports reaching 2.37 million metric tons this month.

Meantime, Argentina became the second main destination for Brazilian soybeans in the first five months of 2023, as it had to boost imports in response to a historic drought that severely affected its crop.

Brazil’s soy exports to its neighbour from January to May reached 1.92 million metric tons, while the volume shipped in May alone was 978,500 metric tons, official data showed.

Imports of the raw bean are expected to double to about 9 million metric tons in the current season.

Argentina should import about 5 million metric tons from Paraguay this year.

Brazil is still expected to export an additional 2 to 3 million metric tons to the neighboring country, Faleiros said.

Argentina saw its crop shrink 43% to 25 million metric tons in 2022/23, according to figures from the U.S. Department of Agriculture (USDA).

Argentina’s Rosario grains exchange estimated an even smaller harvest, closer to 20.5 million metric tons.

Meantime, the Buenos Aires Grains Exchange reported corn harvest was 44% finished, with an estimated crop size of 34 MMT.

Their prior forecast was looking for 36 MMT.

The exchange also nudged down its forecast for the 2023/24 wheat planting area to 6.1 million hectares, down from 6.3 million hectares previously expected.

In this context, as of June 22, price for Argentina wheat Grade 2 quality, delivered Up River was at US$360/t, up $6/t from the prior week.

Price for Argentina feed corn (Up River) was at US$245/t, up $11/t w.o.w..

Price for Argentina feed barley (Up River) was at US$230/t, unchanged.

Price for Argentina soybean (Up River) was at US$568/t, up $25/t.

Price for Brazilian feed corn (Paranagua) was at US$240/t, up $3/t.

Price for Brazilian soybean (Paranagua) was at US$498/t, up $17/t.

In Europe, grain prices fell, with wheat retreating from a two-month high.

Meanwhile rapeseed tumbled on recession fears, dragged down by crude oil.

Grain export sentiment in western Europe was dented by a tender purchase by Algeria expected to be mainly sourced from Russia.

Also, the return of rain to northern Europe eased crop worries, though some yield potential is thought to have been lost.

In Germany, the association of cooperatives revised downwards its estimate of total wheat production to 21.87 million tonnes, compared with 22.31 million tonnes estimated last month.

As for rapeseed, the projected production this season has been revised to 4.14 million tonnes down from 4.28 million tonnes in May.

The water stress of recent weeks will also have an impact on spring malting barley production, anticipated at 1.74 million tonnes.

The very low level of the Rhine had also penalised shipping and grain movements in this region.

Meantime, per latest data from farm office FranceAgriMer, the condition of soft wheat crops in France, declined for the fourth week in a row.

An estimated 83% of soft wheat indeed was rated as being in good or excellent condition in the week to June 19, compared with 85% the previous week.

The score was, however, well above 63% registered a year earlier and remained around the highest for the time of year.

The good/excellent ratings for other major cereal crops also fell further last week, though remaining above last year’s drought-affected levels.

Durum was rated at 77pc as good to excellent, vs 81pc a week earlier and 60pc a year ago, winter barley was at 84pc vs 85pc and 63pc, spring barley was at 78pc vs 83pc and 53pc and maize was at 85pc vs 86pc and 83pc. 

Meantime, soft wheat harvesting was under way, with 2% of the area harvested by June 19, in line with progress a year ago.

The durum wheat harvests was also under way, with 2% progress.

Harvesting of winter barley, the first cereal to be gathered at the start of summer, was 10% complete, while spring barley harvests was 1% complete.

Thus, September wheat contract settled down 1.6% at 247.00 euros ($268.86) a metric ton, after reaching a two-month peak at 253.00 euros on Thursday.

Meantime, in Poland, export prices rose sharply, with tighter availability of wheat at a time of brisk port loadings.

In Gdynia, two ships were each loading about 30,000 metric tons of wheat for multinational trading houses to undisclosed destinations.

One ship left Gdynia with 55,000 metric tons for Nigeria, and another will load 27,500 metric tons expected to be for the United States.

In Szczecin, two ships were also each loading 33,000 metric tons for unknown destinations while in Swinoujscie another is loading 33,000 metric tons for North Africa.

Ukrainian grains are not coming in large volumes anymore due to complicated transit procedures, and Polish supplies are difficult to buy because farmers are not selling.

In this context, Polish 12.5% protein new crop wheat quoted at around 1,065 zloty (240.1 euros) a metric ton for August/September delivery to ports, up 10 zloty past week.

Volatility however dominates the markets during the week, prompting cautious price risk management in a context where the weather remained the main driver.

From the Middle East, Iraq’s purchases of local wheat from farmers have exceeded 4.5 million tonnes during the current harvest that runs until around mid-July or the beginning of August, the general manager of the General Company for Grain Trading, Haider Nouri Al-Karaawi said on Sunday.

From the Middle Kingdom, China has nearly completed this year’s harvest, state media reported on Wednesday.

China was expected to produce 137 million metric tons of winter wheat this year.

But heavy rain and wind hit large swathes of the crop in central Henan province in early May, triggering widespread early germination in the grain and other quality issues.

About 20 million metric tons, or 15% of the total, is unfit for human consumption and can only be used by animal feed makers or alcohol producers.

Beijing has urged local reserves to buy up some of the damaged grain, but purchases have been slow so far.

Thus, sprouted wheat is selling for between 2,300 yuan and 2,400 yuan ($320-$334) per ton in northern China, compared to about 2,820 yuan per ton for quality wheat in Zhengzhou, the capital of Henan province.

The discounted wheat is also much cheaper than corn, which is selling for about 2,700 yuan per ton in Dalian city in northern China.

In this context, China is now poised to overtake Egypt and Turkey as the biggest buyer of wheat in the year through June, according to Bloomberg.

Purchases, indeed, exceeded 12 million tons in the first 11 months of the marketing year, which runs through June.

More than half of those cargoes were supplied by Australia.

Wheat imports accelerated above 1 million tons a month, from October, before peaking at a record of 1.68 million tons in April.

The US Department of Agriculture is forecasting another 12 million tons of Chinese imports in 2023-2024.

Meanwhile, the seeding process after harvesting was a bit delayed in southern China, but normal in northern China.

($1 = 7.1881 Chinese yuan renminbi).

From South East Asia, India’s wheat harvest in 2023 is at least 10% lower than the government’s estimate, a leading trade body said.

Lower wheat production for a second straight year could complicate New Delhi’s efforts to keep a lid on prices.

Prices indeed, were sharply higher during the past two months.

Wheat prices in New Delhi have indeed jumped 10% in the past two months to 24,900 rupees ($303) a metric ton, prompting the government to impose a limit on the amount of wheat stocks traders can hold for the first time in 15 years.

The government has bought 26.2 million metric tons of new-season wheat from farmers against initial projections of 34.15 million tons, indicating lower output.

That all suggests production was around 101 million to 103 million tons.

According to the government, wheat output in contrast rose to a record 112.74 million metric tons in 2023, up from 107.7 million metric tons a year earlier.

India consumes around 108 million metric tons of wheat annually.

The Ministry of Agriculture & Farmers Welfare did not comment.

($1 = 82.01 rupees).

Malaysian palm oil prices recovered from three straight sessions of losses on Friday due to higher rival oils such as soyoil, but the contract recorded a 3.18% drop for the week.

Notably, the benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives closed 1.74% higher to3,624 ringgit ($775.35) per metric ton.

India’s palm oil imports in June are set to jump 46% from a month ago to their highest in three months, as buyers took advantage of a dip in prices to their lowest in 28 months to increase purchases.

Malaysia’s ringgit weakened to hit its lowest level since Nov. 11, 2022 in early trade.

A weaker ringgit made the contract more attractive to foreign currency holders.

Malaysia has maintained its July export tax for crude palm oil at 8% and lowered its reference price, a circular on the Malaysian Palm Oil Board website showed on Wednesday.

From Australia, the arrival in Brisbane of a cargo of Western Australian barley has seen SFW wheat trade in the northern market trade at a premium to barley for the first time since January.

It has also made northern barley the only quoted market to ease in the week earlier, with ongoing dry conditions in northern New South Wales, and bullish factors offshore, lifting values.

As the financial year nears its last week, growers remain reluctant sellers of stored grain, and if northern NSW stays dry, those a long way from port are tipped to retain stocks until just before new-crop arrives and the inverse is at its height.

Meantime, local markets finished the week up, with current and new-crop grower sales continuing to be made in dribs and drabs.

Protein wheat continued to gain a bid in South Australia and Victoria on current crop with H2 firming to $395/t port in SA and $390/t port in Vic.

The forecast is looking promising for some decent rainfall for northern New South Wales and Queensland next week which will be well timed if it eventuates.

On the international trade scene …

Iranian state-owned animal feed importer SLAL is believed to have made no purchase in a tender which closed on Wednesday for 120,000 metric tons of soymeal.

Prices were regarded as too high, with payment problems for Iranian business because of western sanctions making participation in the tender difficult.

The tender had sought soymeal to be sourced from Brazil or Argentina for shipment in July and August.

 Japan’s MAFF purchased 92,529t of milling wheat in its regular tender, including 34,445t of ASW from Australia, 25,978t CWRS of minimum 13.5pc protein from Canada, 14,454t of US DNS minimum 14pc protein, 10,770t US HRW and 6882t of US WW.

In outside markets …

Energy markets saw oil prices settling lower and posting a weekly decline.

Brent crude indeed closed down 29 cents, or 0.4%, on Friday to $73.85 a barrel.

U.S. West Texas Intermediate (WTI) crude fell 35 cents, or 0.5%, at $69.16.

On Thursday, Brent dropped about $3 a barrel.

The benchmarks declined more than 3.5% for the week.

Bank of England raised interest rates by a bigger-than-expected half a percentage point.

Central banks in Norway and Switzerland also hiked rates.

On the supply side, U.S. energy firms past week cut the number of oil rigs operating for an eighth week in a row, energy services firm Baker Hughes Co said.

Notably, U.S. oil rig count, fell 6 to 546 this week, the lowest since April 2022.

Past week’s U.S. inventory report showed crude stocks posted a surprise decline of 3.8 million barrels.

Also set to tighten the market is Saudi Arabia’s production cut of 1 million barrels per day in July announced along with an OPEC+ deal to limit supplies into 2024.

However, the recession and demand concerns outweighed signs of supply-side tightness.

Meantime, money managers raised their net long U.S. crude futures and options positions in New York and London by 4,790 contracts to 78,064 in the week to June 20, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

On this morning, oil prices rose.

Brent crude futures indeed were up 56 cents, or 0.8% at $74.41 a barrel by 07:25 GMT. 

U.S. West Texas Intermediate crude (WTI) was up 44 cents, or 0.6%, at $69.44. 

Both benchmarks gained as much as 1.3% in early Asian trade.

A revolt by Russian mercenaries over the weekend raised concerns about political instability in Russia and the potential impact on oil supply.

In ocean freight markets, the Baltic Exchange’s main sea freight index rose for a third consecutive week on Friday, supported by strong demand for the larger capesize vessels.

The overall index, indeed, was up 24 points, or 2.0%, at 1,240 – its highest level in almost a month.

The main index was up 15.2% for the week.

Notably, the capesize index rose 89 points, or 4.5%, to 2,080, and gained 36.1% this week, to mark its biggest weekly percentage gain since March 10.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes carrying commodities such as iron ore and coal, increased $738 to $17,252.

The panamax index fell 13 points, or 1.1%, to 1,127. The index was down 5.5% this week, registering its first loss in three weeks.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $124 to $10,139.

Among smaller vessels, the supramax index fell 8 points to 743. 

In equity markets, we saw another drop for stocks on Friday helped drag Wall Street to its first losing week in the last six.

The S&P 500 indeed fell 33.56, or 0.8%, to 4,348.33, pulling back further from last week.

The Dow Jones Industrial Average dropped 219.28, or 0.6%, to 33,727.43, and the Nasdaq composite sank 138.09, or 1%, to 13,492.52.

Europe’s economy appears to be weaker than expected.

Friday’s Eurozone PMI report indeed suggested that the Eurozone might be in for another quarter of negative growth in Q2, meeting the short-hand definition of a recession. 

The preliminary-June S&P Eurozone composite PMI fell by -2.5 points to a 5-month low of 50.3, much weaker than market expectations of 52.5. 

The preliminary-June S&P Eurozone manufacturing PMI fell by -1.2 points to a very weak 43.6, which was weaker than expectations of unchanged at 44.8.

The preliminary-June S&P Eurozone services PMI fell by -2.7 points to 52.4, weaker than expectations for a -0.6 point drop to 54.5. 

The preliminary-June S&P German composite PMI fell by -3.1 points to 50.8, while the French composite PMI fell by -3.9 points to 47.3.

Also, Friday’s preliminary-June S&P U.S. PMI fell by -2.1 points to a 6-month low of 46.3, weaker than expectations for a +0.1 point increase to 48.5.

The services PMI fell -0.8 points to a 2-month low of 54.1, which was slightly better than expectations for a -0.9 point drop to 54.0. 

The composite PMI fell by -1.3 points to a 3-month low of 53.0, which was weaker than expectations for a -0.8 point drop to 53.5.

That added to the crank higher in interest rates by central banks around the world.

On Thursday, indeed, the Bank of England hiked its main interest rate by a bigger margin than expected to a 15-year high.

Central banks in Norway, Switzerland and Turkey also raised borrowing rates.

As a result, tech companies were hit hard.

A 1.4% drop for Microsoft and 3% fall for Tesla were the two heaviest weights on the S&P 500.

Nvidia, one of the biggest beneficiaries of the AI boom, fell 1.9% and was the third-heaviest weight on the index.

Meantime, the yield on the 10-year US Treasury fell to 3.73% from 3.79% late Thursday.

On this morning, Asian shares fell as a consequence of the short-lived armed rebellion in Russia, which added to uncertainties over the war in Ukraine.

Benchmarks declined in Tokyo, Sydney Hong Kong and Shanghai, but rose in Seoul.

Notably, Japan’s benchmark Nikkei 225 lost nearly 0.3% to finish at 32,698.81.

South Korea’s Kospi rose 0.5% to 2,582.20.

Hong Kong’s Hang Seng was down 0.2% to 18,853.18, while the Shanghai Composite, reopening after a holiday, dropped 1.5% to 3,150.62.

Australia’s S&P/ASX 200 shed 0.3% to 7,078.70.

In currency trading, the dollar index rose by +0.54% as the weak U.S. stock market increased liquidity demand for the dollar, while weaker than expected Eurozone PMI reports, sparked euro selling.

Notably, the EUR/USD fell by -0.65%. 

The USD/JPY rose by +0.47%.

Friday’s Eurozone PMI report suggested that the Eurozone might be in for another quarter of negative growth in Q2.

Eurozone GDP indeed fell slightly by -0.1% q/q in both Q4-2022 and Q1-2023, meeting the short-hand definition of a recession. 

Thus, in spite the consensus is that Eurozone GDP will show a slight increase of +0.1% q/q in Q2, the weak PMI report called that forecast into question.

On this morning, the U.S. dollar fell to 143.02 Japanese yen from 143.58 yen.

The euro cost $1.0901, inching down from $1.0903.

Watching this week’s market …

USDA’s Export Inspections and Crop Progress reports will be back to their routine Monday release.

EIA’s weekly ethanol production and stocks report will be published on Wednesday in the afternoon.

Export Sales data will be out on Thursday, with the quarterly NASS Hogs & Pigs report that night.

Friday is setting up to be a much-anticipated session with week, month, and quarter end rounding out with the USDA quarterly Grain Stocks and annual June Acreage reports.

That’s all, thank you.

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

Author: Sandro F. Puglisi

To read more, register on https://marketplace.bancadelgrano.it/

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