US grain prices spilled back into the red on Friday.
Corn and soybeans each dropped around 2%.
Most wheat contracts were down more than 1.5%.
Soyoil was hammered particularly hard, losing more than 5%, while soymeal bucked the overall trend and moved moderately higher, closing with gains of around 0.5%.
On macro markets, oil prices reversed out of a seven-day losing stretch on this morning as investors punted on crude at bargain levels, though lingering fears over how a surge in globalCOVID-19 cases might affect fuel demand combined with a firmer U.S. dollar to limit gains.
Thus, Brent crude futures climbed 60 cents, or 0.9%, to $65.78 a barrel by 01:58 GMT, after hitting the lowest level since May 21 of $64.60 earlier in the session.
U.S. West Texas Intermediate (WTI) crude futures for October rose 53 cents, or 0.9%, to $62.67 a barrel, recovering from $61.74, the lowest since May 21, touched in Asia’s early trade.
Both benchmarks marked their biggest week of losses in more than nine months last week: Brent slid about 8% and WTI fell about 9%.
On the financial side, Asian share markets were trying to pick up the pieces on Monday following last week’s thrashing as coronavirus concerns showed little sign of abating, while safe-haven flows benefited the dollar ahead of a key update on U.S. monetary policy.
Concerns over China’s economy have only intensified in recent weeks, while Beijing’s regulatory crackdown on the tech sector delivered a double blow to markets.
More than $560 billion was wiped from Hong Kong and mainland China exchanges last week as funds fretted on which sectors regulators might target next.
The impact was all too evident in MSCI’s broadest index of Asia-Pacific shares outside Japan which sank 4.8% last week to a nine-month trough.
The sheer speed and scale of the fall left it oversold, helping it rally 1.5% on Monday.
Japan’s Nikkei also bounced 1.7% on this morning, but that follows a 3.4% slide last week to its lowest since December.
Chinese blue chips firmed 1.2% from a three-week low.
On Wall Street, stocks ended the week mixed, with defensive and tech-heavy stocks regaining ground after two days of losses.
The Dow Jones closed at 35.515 gaining during the session 226 point, but slumping for the week by 395 points or 1,11%.
The S&P 500 fell -20 or 0,45% to 4.441 for the session.
The NASDAQ Composite index, rebonded during Friday session’s, by by 172 points or 1,19%, but remained in its downtrend , closing the week at 14.714 and registering a loss by -108 points or 0,73% for the week.
The agency’s 8-to-14-day outlook predicts seasonally warm weather for most areas west of the Mississippi River between August 27 and September 2, with drier-than-normal conditions settling into the Great Lakes region.
However, corn and soybeans lost ground on favorable rains for the Corn Belt and early reassurance about the coming harvest following the crop tour.
Indeed, the Pro Farmer crop tour pegged the national corn crop at 177bu/ac while they thought beans would be 51.2bu/ac.
Doubts remain about the biofuel policy that the US administration could pursue in the future.
Indeed, the main catalyst for Friday’s weakness was the rumour the EPA would be recommending lower biofuel mandates which would eat into corn and beanoil demand.
But after the trading session there was another rumour pretty much indicating the opposite.
Meantime, in fact, the EPA reported that the U.S. generated 1.27 billion ethanal blending credits in July, which was stable from June totals.
The U.S. also generated 356 million biodiesel blending credits last month, which was only moderately lower than June’s tally of 429 million credits.
Thus, corn basis bids were steady to weak Friday after falling 5 to 25 cents lower across three Midwestern locations.
Soybean basis bids tumbled 20 cents lower at an Indiana processor but held steady elsewhere across the central U.S..
In this context, wheat prices followed corn and soybeans lower after a round of technical selling, but the drop wasn’t quite as severe.
From South america, Argentina’s grain production is expected to tilt more heavily in favor of corn versus soybeans this coming season, due in part to the country’s export tax policy and better performing hybrids.
Corn production for 2021/22 is estimated at 2.165 billion bushels, with soybean production estimated at 1.800 billion bushels.
On European market, volatility remains particularly relevant on Euronext.
Matif wheat futures are clearly showing the problem with deliverable quality, forcing the Sept v Dec price differential to rally by €25/t over the course of last week.
Meantime, Farm office FranceAgriMer estimates that 91% of the country’s corn crop is rated in good-to-excellent condition through August 16, holding steady from a week ago.
France’s 2021 wheat harvest is 91% complete through August 16, jumping up from 72% last week, per farm office FranceAgriMer.
In rapeseed, the market remains divided between a decline in the prices of palm and soybean oils in particular, a European and Canadian balance sheet which remains very tight on the physical level.
Meantime, plantings for the 2022 harvest in France are progressing, but against a background of fears related this time to the structure of the soils and the lack of moisture on the seedbeds.
From the Black Sea basin, President Putin announced on Sunday that the production of Russian cereals this year will reach 127 million tonnes, down sharply compared to last year, but that this will remain sufficient to meet internal and export needs.
The water deficit observed in spring wheats admittedly had an unfavorable impact on yields but favored qualitative criteria.
Prices in the Black Sea basin progressed this Friday in both Ukraine and Russia.
Meantime, Ukraine’s 2021 wheat harvest is virtually complete at 97.6%, per a statement from the country’s agriculture ministry.
Average yields this season reached 68.7 bushels per acre.
Ukraine’s total grain production is expected to rise 17% from a year ago.
From the Middle Kingdom, China’s soybean imports from Brazil in July fell nearly 4% year-over-year to 289.5 million bushels, due in large part to poor crush margins and falling pork prices.
The U.S. also exported a modest amount of soybeans to China last month, totaling 1.6 million bushels.
From Australia, while the east coast wheat belt has had a cracking season, many areas are keen to see some more moisture.
Finally we are seeing some decent falls forecast in the back end.
Walgett is set for an inch with similar amounts forecast for the majority of the NSW belt.
SA and the Vic Mallee are looking for around half of that over the next 15 days.
Internationally, South Korea bought 66,000 t of corn and Turkey 270,000 t of feed barley.
Algeria is positioning to take Russian wheat, something they haven’t done since 2016 when they introduced some quality standards that Russia simply couldn’t hit.
French quality downgrades are also behind this decision given Algeria has been the main milling wheat buyer of French production.
The Philippines purchased more than 6.0 million bushels of animal feed wheat and feed barley from Australia in a tender that closed last Thursday.
The grain is for shipment in October and November.
Egypt’s government reports that the country’s strategic wheat reserves are sufficient for the next six months.
Vegetable oil reserves could last another five months after a sunflower oil purchase last week.
