US grain prices were mixed on Friday.
Corn prices fell nearly 0.75% on expectations of a brisk harvest pace moving forward.
Soybeans finished the session with modest gains.
Spring wheat was the day’s big winner after firmed 1%.
CBOT futures also rose around 0.75%.
Kansas peices were down a bit, sheding around 0,03%.
On macro markets, oil prices rose for a fifth straight day on this morning with Brent heading for $80 amid supply concerns as parts of the world sees demand pick up with the easing of pandemic conditions.
Rising gas prices as also helping drive oil higher as the liquid becomes relatively cheaper for power generation.
Thus Brent crude was up $1.14 or 1.5% at $79.23 a barrel by 02:08 GMT, having risen a third consecutive week through Friday.
U.S. Oil added $1.11 or 1.5% to $75.09, its highest since July, after rising for a fifth straight week last week.
On the financial side, on Thuersday and Friday stocks bounced back from a sharp selloff at the start of the week tied in part to concerns over a default by China’s Evergrande and its potential risk to global financial markets.
Thus the Dow and S&P 500 edged higher on Friday and ended a turbulent week with slight increases, helped by gains in Tesla and Facebook that offset a tumble by Nike.
In fact the Dow Jones Industrial Average rose 33.18 points, or 0.1%, to 34,798, the S&P 500 gained 6.5 points, or 0.15%, to 4,455.48 and the Nasdaq Composite dropped 4.55 points, or 0.03%, to 15,047.70.
For the week, the Dow was up 0.6%, the S&P 500 gained 0.5% and the Nasdaq was near flat.
Crypto currencies, in contrast, took a beating on Friday after the announcement of a ban on bitcoin trading and mining by China.
On the other hand, on Wednesday the Federal Reserve said it would reduce its monthly bond purchases “soon” and half of the Fed’s policymakers projected borrowing costs will need to rise in 2022.
Investors are now looking for signs of progress on President Joe Biden’s spending and budget bills.
Meantime, the U.S. Dollar Index increased, from last week’s 93.09 to close at 93.36.
On this morning, Asian shares crept higher as risk sentiment turned for the better, though the surge in oil prices to three-year highs could inflame inflation fears and aggravate the recent hawkish turn by some major central banks.
Thus, MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.5%, though that followed three consecutive weeks of losses.
Japan’s Nikkei gained 0.4% on hopes for further fiscal stimulus once a new prime minister is chosen.
Chinese blue chips gained 1.1% as the country’s central bank pumped more money into the financial system and investors dared to hope Beijing would limit the fallout from the troubled China Evergrande Group.
Coming back on grains market, most areas in the Midwest and Plains will be completely dry between until Tuesday, although parts of the eastern Corn Belt could gather up to 0.25” during this time, per the latest 72-hour cumulative precipitation map from NOAA.
The agency’s 8-to-14-day outlook predicts more seasonally dry weather for the eastern half of the country between October 1 and October 7, with warmer-than-normal conditions likely for most of the country next week.
In this context, corn yielded a little ground under the effect of harvest pressure which have rapidly progress .
Soybean prices dialed in small changes in a choppy session as traders await fresh export and harvest news.
Harvest pace will likely make a big leap forward when USDA reports its next progress updates out this afternoon, thanks to favorable weather over much of the central U.S. this past week.
Wheat prices were mixed but mostly higher, thanks in part to rising global prices and solid international demand, along with some production concerns scattered among some key producers around the world.
On the other hand, we are four trading days away from the Sept 30 stocks and small grains reports and markets are starting to square up some positions and manage risk in preparation for these reports.
In this context, corn basis bids held steady across the central U.S. on Friday after showing significant variability earlier past week.
Soybean basis bids tilted 5 cents higher at an Indiana elevator while holding steady elsewhere across the central U.S. on Friday.
From Canada, Canadian canola exports are still struggling to accelerate, with 388 kt only loaded from the 1 st August, representing a fall of one million tonnes from last year!
From South America, soybean planting is underway, meantime there’s a solid rain event building on the 2-week weather models.
Widespread falls of 1-2″ are forecast across the Brazilian soybean belt.
The Buenos Aires Grains Exchange estimated Argentina’s wheat crop at 19.2Mt, resulting from both higher area and yield than the 2020/21 production it estimated at 17Mt.
On European market, Euronext maintained its bullish pace on Friday evening with a December 2021 wheat contract which confirmed its passage above 250 € / t.
Despite the mediocre quality of the French wheat harvest, they are finding their way to China, which has reduced its requirements, mainly on the specific weight criterion.
Indeed, numerous Chinese purchases of French feed wheat are notably reported.
Rapeseed continues to amplify its historic record posting a 619.50 euros per tonne due November on Euronext.
This morning, the market should still find support in the firmness in pre-opening of soybeans, but also in the rise in palm and oil.
According to the Fop, rapeseed areas in France could increase by 15 to 20% compared to last year.
Corn, for its part, benefits from the firmness of wheat and a lengthened lean period by sluggish Ukrainian harvests and late-ripening French crops.
The subject of supplying fertilizers, in particular nitrogen, remains at the center of the concerns of French producers, with a surge in international prices.
From the Black sea basin, there are rumors of new export restrictions that Russia could impose that are supporting prices more.
Meantime, Russia has again raised its wheat export tax, by $ 2.60 / t ($ 53.50 / t).
On the other hand, Russian analytics firm JSC Rusagrotrans estimates that the country will export 11.502.000 t of wheat between July and September.
That would be a year-over-year decline of 9%, if realized.
Reductions of exports to Egypt was a significant factor in this projection.
Meantime, Ukraine’s agriculture minister reported on Friday that the country’s 2021/22 wheat exports could reach 24.398.541 t.
That would be a year-over-year increase of 47%, if realized.
Additionally, according to the Ukrainian Minister of Agriculture, 60% of wheat this year would be of milling quality and the harvest would be 33 million tonnes against 25 million last year.
Meantime, winter wheat planting progress for the 2021/22 season is now 18% complete.
In corn, the tension is on close deliveries, a consequence of the delay in harvesting sites with only 4% harvested on 23 September against 8% normally to date.
Indeed, the rains continue to disrupt harvests.
Ukraine is one of the world’s top grain exporters and is coming off a record-breaking harvest this year.
From the Middle Kingdom, Chinese wheat purchases of Australian wheat have been making global headlines.
Interest and business have been ongoing for some time but global markets became more excited about the trade after a news wire reported it accounted for almost 2 million tonnes (Mt) of new crop commitment.
Additionally, despite the mediocre quality of the French wheat harvest, China continued to bougth reducing its requirements, mainly on the specific weight criterias.
On the other hand, China’s state stockpiler sold a modest amount of imported corn (just under 10.541 t) on auction last Friday, which was 9% of the total available for sale.
The country has offered a flurry of similar auctions in recent months to combat high domestic prices.
From Australia, markets were very quiet on Friday with many paying more attention to the upcoming Grand Final.
Grain bids were a buck or two higher in general for new crop, and a few new grower sales hit the books, but otherwise limited trade was reported.
The forecasts remain firm for NSW and central Victoria with a widespread 20-30+ mm in the last model runs.
Meantime, continuing covid border restrictions are making life difficult for farmers and harvest workers at the start of a bumper season, according to NSW Farmers.
Indeed, for the second year in a row, farmers are dealing with having to run harvest with limited access to workers and COVID testing facilities that have limited hours of operation.
On the other hand, widespread global disruption to supply is set to see Australian farmers again move to lock in fertiliser and other inputs early for the season ahead, Rabobank says in a recently-released report.
This is despite global fertiliser prices at near-decade highs and expected to remain elevated in the short to medium term.
Rabobank said global fertiliser prices had reached their highest level since 2012.
Internationally, Algeria’s OAIC is tendering again for wheat to be answered tomorrow, Tuesday, September 28, for shipment in November.
Markets are watching to see how much and how competitive French offers will be given quality.
Japan bought just over 113,000 tonnes of milling wheat from the USA and Canada.
Of the total, 49% was sourced from the U.S.
The grain is for shipment between late October and late November.
South Korea, for its part, bought 60,000 t of corn.
The grain is for shipment by December 30.
Algeria is launching a new call for tenders for wheat,
Taiwan issued an international tender to purchase 66.000 t of animal feed corn sourced from the United States, South America or South Africa, which expires September 28.
We wish you a good day and a good start of the week.
