US farm markets, were narrowly mixed for the most part, last Friday.
Corn prices were up between 0.5% and 0.9%.
In contrast, soybeans stumbled ultimately lost around 0.5%.
Winter wheat also spilling lower with some contracts down as much as 0.9%.
Spring wheat saw the biggest moves, trending 1% higher.
On macro markets, oil prices rose 2% on Friday, posting their biggest weekly gains in over a year, as energy firms began shutting U.S. production in the Gulf of Mexico ahead of the hurricane arrive.
Brent futures rose $1.45, or 2.07%, to settle at $71.63 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.30, or 1.93%, to settle at $68.72.
That was the highest close for Brent since Aug. 2 and for WTI since Aug. 12.
For the week, Brent gained around 11% and WTI rose more than 10%, which was the biggest weekly percentage gains for both since June 2020.
On the financial side, Wall Street rallied on Friday, pushing the S&P and the Nasdaq to record closing highs for the fourth time this week, thanks to U.S. Fed Chair Jerome Powell’s wait-and-see approach in a much-anticipated address, that has given investors and market participants some reassurance that the central bank’s extraordinary efforts to prop up the economy were likely to support riskier assets a while longer.
Maybe, this decision is as consequence of U.S. consumer spending slowed in July as a decline in motor vehicle purchases due to shortages offset a rise in outlays on services, supporting views that economic growth will moderate in the third quarter amid a resurgence in COVID-19 infections.
But the foundation for the recovery remains solid, with the report from the Commerce Department on Friday showing wages rising and Americans further boosting savings.
Inflation, meantime, continued to rise last month, fanned by the unrelenting supply constraints and the economy’s move toward normalcy after the upheaval caused by the pandemic even if the pace of increase is slowing.
Businesses are restocking and exporting more goods, suggesting a slowdown in growth this quarter could be only temporary.
Meantime, the personal consumption expenditures (PCE) price index, meantime, excluding the volatile food and energy components, climbed 0.3% in July.
In the 12 months through July, the so-called core PCE price index rose 3.6% after a similar increase in June.
Maybe inflation could to have peaked, which could preserve households’ purchasing power.
Just to remember, the core PCE price index is the Federal Reserve’s preferred inflation measure for its flexible 2% target.
In this context, the Dow Jones Industrial Average closed the week at 35,455.8 up 242.68 point, or 0.69% for the session, but lower than last week when closed at 35.515.
The S&P 500 gained 39.37 points, or 0.88% on Friday, closing to 4,509.37 and registering for the week a gain of 41,37 points.
The Nasdaq Composite added on Friday 183.69 points, or 1.23%, to close the week at 15,129.50, jumping week over week by 415,5 points.
To note that the S&P 500 posted 60 new 52-week highs and one new low; the Nasdaq Composite recorded 132 new highs and 37 new lows.
Asian shares, meantime, perked up and the dollar fell to two-week lows on this morning, although investors remained cautious about prospects in China.
Thus, MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.45%, and Japan’s Nikkei rose 0.28%.
Chinese blue chips bucked the broader Asian trend, falling 0.20% and the Hong Kong benchmark fluctuated either side of flat.
The larger gains were in smaller markets with Taiwan up 0.54% and Singapore 0.77% higher.
Coming back on grains market, rain will continue to move across the upper Midwest and into the Great Lakes region until Tuesday, with some areas still set to gather another 1.5” or more, per NOAA’s latest 72-hour cumulative precipitation map.
Meantime, hurricane Ida plowed into Louisiana from the Gulf of Mexico as a fierce Category 4 storm on Sunday, lashing the coast with 150 mile-per-hour winds, torrential downpours and pounding surf that submerged much of the shoreline under several feet of water.
It could dump also plenty of rain into Arkansas, Mississippi, Alabama and Tennessee early this week.
NOAA’s 8-to-14-day outlook predicts seasonally wet weather for much of the central U.S. between September 3 and September 9, with some colder-than-normal temperatures creeping back into the upper Midwest and Northern Plains.
In this context, we have seen on Friday in Chicago a slight decline for some grain contracts due to profit taking as consequence of beneficial rains much expected on the Corn Belt.
Indeed, soybean prices trended around 0.5% lower while corn prices moved moderately higher.
In fact, uncertainty dominates both on the expected yield and the biofuel policy decided by the EPA.
The USDA, however, gave the trend a little upward impulse by announcing sales of 150 kt of corn to Colombia, as well as 129 kt of soybeans to China.
Thus, corn basis bids were mostly steady to weak on Friday after falling 2 to 15 cents lower across four Midwestern locations.
An Iowa river terminal bucked the overall trend after firming 5 cents.
Soybean basis bids tumbled 30 cents lower at an Iowa river terminal and 15 cents lower at an Indiana elevator while holding steady elsewhere across the central U.S..
Wheat prices, on the other hand, were mixed after some uneven technical maneuvering with winter wheat contracts that fell as much as 0.9%, while spring wheat rose 1% higher on lingering concerns over dismal crop quality and yield potential as harvest winds down.
From Canada, the release of StatsCan estimates will be tonight.
We will follow it carefully.
From South America, the Buenos Aires Grain Exchange maintained their 19Mt wheat estimate.
On European market, we have seen a weak sitting last Friday with prices fell in a sluggish market, despite a tight wheat market.
Indeed, Euronext ended its week on a negative note in a rather wait-and-see market, despite demand is strong and, in many of the main destinations, it is still hand-to-mouth.
Additionally, in France, the milling wheat market is tight after the rains which caused great losses of quality during the harvest periods.
According to FranceAgriMer on August 23, 96% of soft wheat was harvested and 100% of spring barley.
91% of corn is considered good to excellent, unchanged from the previous week.
German grain production, on the other hand, was forecast 42.4Mt, 4.7 per cent below the 5-year average.
Rapeseed prices, on their part, gave up some ground, however, remaining close to the highest of the year.
Operators, indeed, remained focused on Monday’s session, during which StatCan will release its 21/22 canola and wheat production estimates.
Spring wheat, durum wheat and canola production will be monitored especially after the extreme conditions that have affected the North American country in recent months.
From the Black Sea basin, Ukraine export’s activity at the start of the season is strong, with 7 million tonnes sold to date, including 3.4 million tonnes of wheat, 2.4 million barley and 1.8 million tonnes of corn.
This can be compared to 6.4 million tonnes to date last year.
Prices in the Black Sea basin remain strong in wheat and corn with a sharp rise in corn in Ukraine, a consequence of Chinese demand.
On the other hand, feed barley prices are struggling to keep up with this firmness.
Russia will have to limit its exports while maintaining its policy on export taxes, given the risk of inflation and the downward revision of its production.
In this context, SovEcon consultancy lowered its forecast of Russian wheat exports 3.2 million tonnes (Mt) to 33.9Mt.
From the Middle Kingdom, rumours are circulating about China wheat demand.
In addition Australian wheat already in demand by China, for shipment December onwards, its expect to add some US Soft Red Winter wheat.
Chinese grain stockpiler Sinograin sold another 1.5 million bushels of its imported corn reserves at auction earlier today, which was 37% of the total available.
Sinograin also offered around 900,000 bushels of non-GMO corn, but none of that grain sold.
China has offered multiple auctions throughout the summer in an attempt to tamp down high domestic prices.
From Australia, weather maps are predicting an increase in weather activity.
8-day forecasting has 10-25mm rain falling across a large part of Victoria and into southern and central NSW.
SA and the Victorian Mallee are set to record some higher temps towards the back end of the week when 30 degrees maximums will test Mallee crops.
Meantime, Australian prices are very competitive into Europe and Japan.
Thus, new season picked up towards the back end of the week, wheat finishing on Friday up $3-4/t.
Track APWMG in Victoria was around $350/t.
Barley bids were $1-2/t firmer across the board new crop.
Track values ended the week at $280/t Vic and $310/t Kwinana FIS.
Old crop continued to leak out to fulfil the nearby demand.
Canola new crop again pushed higher, new highs in WA pushing values to around $930t FIS and east coast quoting $900/t track.
Reports emerged of new season canola export business being done.
On the international scene, it is Egypt’s call for tenders in wheat for loading October 15/25 and payment in 180 days, which will now hold the attention of operators.
Algeria is also buying wheat for October shipments.
Finally, Pakistan has launched a call for tenders for 550,000 t of wheat.
South Korea issued an international tender to purchase 5.1 million bushels of corn from optional origins, which closed on Friday.
The purchase is comprised of two consignments that are both for arrival in late November.
We wish you all a good day and a good start to the week
