US farm markets has fallen, last Friday.
Weather concerns continue to dominate price direction.
The Thursday drought map for the U.S. showed dry conditions spreading (and in some cases intensifying) across northern plains.
However, this trend was interrupted by some beneficial rains during the weekend.
Consequentially, all prices stumbled.
After the June monthly USDA report, traders have started to prepare for the month-end “Acreage” report.
Based on survey estimates that have been done by multiple firms across the industry, acres are likely to increase for both corn and soybeans compared to the March “Prospective Plantings” report”.
On this weake, IHS Markit Agribusiness lowered its forecast for 2021 U.S. corn plantings, moving from a May estimate of 96.849 million acres down to 96.539 million acres.
However that is still significantly higher than USDA’s March planting intentions report, which predicted 91.144 million acres.
Meantime, IHS Markit Agribusiness increased its estimates for 2021 U.S. soybean acres from 88.485 million acres in May up to 89.065 million acres.
That’s well above USDA’s March estimate of 87.6 million acres.
The agency will update this numbers on June 30.
The USDA report on Thursday included a few surprises for traders.
Old crop and new crop soybean carry-out increased more than pre-report estimates.
Corn carryout decreased by 150 million bushels for both old and new crop.
That was a friendly surprise for traders.
Brazil corn production was slightly higher than traders were expecting and was higher than what Brazilian CONAB published as well.
Traders expect to see the total production for Brazil to decline in upcoming reports.
On macro markets, oil prices continued their rally for the third week in a row, amid confidence in the strong oil demand outlook and accelerating vaccinations allowing people to travel more.
On the week closing, Brent crude rose to $72.69 per barrel. West Texas Intermediate (WTI) rose to $70.91 (+1.00%) per barrel.
The U.S. dollar was higher, and the Dow Jones Industrials was 13 points higher at 34,479 points.
In this context, at the close of the week, the July corn futures finished 14 1/2¢ lower at $6.84.
New corn crop September futures closed 8 1/2¢ lower at $6.29 1/4.
December corn futures finished 6 3/4¢ lower at $6.09 1/2.
July soybean futures closed 35 1/2¢ lower at $15.08 1/2.
After hitting a high of $16.23, on Monday, this contract has had a $1.15¢ range, last week, dropping to a low of $15.08.
August soybean futures closed 27 1/2¢ lower at $14.82 1/2.
New crop November soybean futures settled 20 1/2¢ lower at $14.38 1/4.
July wheat futures closed 3¢ lower at $6.80 1/4.
July soymeal futures closed $1.70 per short ton higher at $383.30.
July soy oil futures finished $3.48 lower at 66.98¢ per pound.
On the pilitical hands, G7 leaders have reached consensus last Saturday, on the need for a shared approach to China selling exports at unfairly low prices and to human rights abuses.
Leaders of the Group of Seven world’s largest advanced economies had also agreed on the need to coordinate on supply chain resilience to ensure democracies are supporting each other.
Under the legal structure of the World Trade Organization, the designation of China as a “non-market economy” allows its trading partners, including the United States, to use a special framework to determine whether China’s exports are being sold at unfairly low prices and, if that is found to be the case, to apply additional anti-dumping duties.
The head of the World Trade Organization said on Saturday she hoped that post-Brexit tensions between Britain and the European Union would not escalate into a trade war.
“It’s too costly for both sides.”
“This is not what the world needs right now.”
Coming back on grains market, U.S. corn and soybean futures eased and soyoil futures plunged by their daily trading limit on Friday mainly on concerns about demand for renewable fuel feedstocks, as the White House is considering offering fuel refiners relief from biofuel blending mandates.
This accelerated ethe nd-of-week profit-taking pressure, meawhile forecasters called for some crop-boosting rains in parts of the U.S. Midwest and Northern Plains.
The biofuel news spooked the market.
Really some rains in the Dakotas has came.
The palm oil was down 4% to 5%.
Wheat futures, on the other hand, eased on Friday, mainly led by sharply lower spring wheat prices after recent rains in top producer North Dakota.
Large speculators cut their net long position in CBOT corn futures in the week ended June 8, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and raised their net long position in soybeans.
And that, is all weighened on grain prices, of course.
Meantime in the preopening this morning, Chicago corn futures fell 3%, dropping to their lowest in more than one week.
Wheat and soybeans slid more than 2%.
Improved outlook for supplies are weighing on the market.
From Cansada, ICE canola futures plunged on Friday for a third straight day, dragged down by weakness in larger vegetable oil rival soybean oil.
Most-active November canola lost $17 to $744.30 per tonne.
Touched a 10-day low of $732.50.
Weakness in the Canadian dollar, which hit a four-week low, underpinned canola.
Recent rains have improved the outlook for Canada’s canola crop.
In the Canadian province of Alberta, 87 percent of canola acres emerged, compared to the five-year average of 77 percent.
November-January canola spread traded 2,143 times.
From South America, Buenos Aires Stock Exchange increased Argentina’s maize harvest by 2 Mt to 48 Mt , against 51.5 Mt last year.
About 37.8% of the crop has been brought in so far, the exchange said in its weekly report. Argentina, with its vast Pampas grains belt, is the world’s No. 3 corn exporter.
On European market, Euronext quotes suffered further losses in the face of climatic improvements both in North America and Europe.
The encouraging growing conditions in France, have seen FranceAgriMer notably raised its “good to very good” wheat ratings by one point, to 81%, against 56% last year and 72% on a five-year average.
Corn ratings are still standing at 91% from “good to very good” (83% last year).
From Turkey, in contrast, no good news.
With its food inflation already above 17%, crisis-hit Turkey is bracing for further increases in food prices amid looming declines in key crops due to drought, coming atop already serious problems in the agricultural sector and the country’s unremitting currency woes.
Inflation data, released by the Turkish Statistical Institute last week, show that food prices were up 17.49% year-on-year in May, compared to an overall consumer inflation of 16.59% in the same period.
In some key categories such as cereals and processed food, including bread, the price increases were even higher, hovering at nearly 20%.
Moreover, the institute has made some alarming forecasts for the agricultural sector this year due to drought.
Average precipitation levels have fallen 25% below normal seasonal amounts, highlighting the ever-growing impact of global warming.
The output of cereals and other vegetative products is expected to drop to 67.9 million tons from a record 71.3 million tons in 2020, according to the institute.
The same study estimates that the output of wheat — a strategic crop and a key product for the food sector — will decrease 7.3% to 19 million tons from 20.5 million tons last year, the steepest drop in recent years.
The overall decline in grain crops is expected to hit up to 5%.
In the southeast, the worst-hit region, wheat, barley and red lentil yields are expected to drop by 20% to 80%.
Crop yields are expected to decrease by 25% in the central province of Konya, one of Turkey’s main breadbaskets, and by about 20% in Sivas to the east.
From Black Sea basin, has came another element of pressure.
SovEcon raised its estimate of the Russian wheat harvest by 1.5 Mt to 82.4 Mt.
Meantime, Ukrainian grain exports halted their recent upturn, posting a volume of just 466,000 t in the past week to reach 42.93 Mt (compared to 55.22 Mt at the same time last year) since the start of the campaign, according to official data.
This volume is less than half of that of the previous week.
In detail, Ukrainian wheat exports stagnated last week, due to weak demand and low carry-out stocks.
The total volume of wheat exported since the start of the season stands at 16.1 Mt, down 20% from the same period last year.
Total Ukrainian corn exports amount to nearly 22 Mt, also down 25% from last year.
Barley exports amounted to 4.1 Mt (-16% compared to last year) with zero deliveries for two consecutive weeks, in a context of limited supply.
From Australia, Western Australian grain growers have been urged to start monitoring crops for the pest, Russian wheat aphid, which is already active this season.
There have been several reports to the WA Department of Primary Industries and Regional Development’s (DPIRD’s) PestFax service of Russian wheat aphids in crops in the Esperance district, as well as Mount Madden, Lake King, Mount Barker through to Borden and Williams.
Russian wheat aphid has become established in grain growing regions across Australia, after it was first detected in South Australia in 2016.
Meantime, Aussie canola export in April reached 451,588 tonnes, down per 40 cent from the 749,563t shipped in March, according to the latest export data from the Australian Bureau of Statistics (ABS).
As was the case in November and December, practically the opening months of Australia’s current shipping year, Germany was the major destination, and took 275,788t, or 61pc, of the April total.
Belgium, the biggest-volume market in March, was the second-biggest market for April-shipped canola with 121,305t, while Poland on 30,000t was in third place.
April is expected to start the downtrend in Australia’s monthly canola export numbers until new-crop rolls around in November.
However, Lachstock Consulting said in its latest canola supply-and-demand report that Western Australia was expected to ship 100,000t plus per month in the back half of the year.
The oilseed has taken precedence on shipping stems to get to Europe ahead of its new-crop becoming available, and Australian shipping stems are now dominated by wheat, as large parcels of canola and barley become harder to accumulate.
ABS data indicates Australia has exported 2.46 million tonnes (Mt) of canola between November 1 and April 30.
Lachstock has Australia’s 2020-21 (Oct-Sep) canola exports pegged at 3.3Mt, behind only 2012-13 and 2016-17, which were both just under 3.5Mt.
Internationally, South Korea bought 65,000 t of feed wheat from optional origins.
Ethiopia, for its part, canceled its tender for 400,000 t of milling wheat.
Tonigth we will see how the sessions close.
