US farm markets were mixed but mostly higher last Friday.
Corn trended another 1% higher.
Soybeans moved up around 0.25%.
Wheat prices were mixed, as spring wheat contracts jumped another 1.75% higher while Kansas City HRW contracts eased 0.5% lower, meantime.
On macro markets, oil prices fell on this morning after China said it released reserves of gasoline and diesel to boost supply and support price stability in some regions, according to the National Food and Strategic Reserves Administration said on Sunday.
Meantime, investors unwound long positions ahead of an OPEC+ meeting on Nov. 4.
Thus, Brent crude futures dropped 20 cents on this morning, or 0.2%, to $83.52 a barrel by 00:39 GMT, after gaining 6 cents on Friday.
U.S. West Texas Intermediate (WTI) crude futures slid 37 cents, or 0.4%, to $83.20 a barrel, having risen 76 cents on Friday.
Both benchmarks fell slightly last week, marking the first weekly drop in eight weeks for Brent and the first decline in 10 weeks for WTI.
On the financial side, Wall Street capped a choppy day of trading last Friday with modest gains for stocks.
However the major indexes were nudged to more all-time highs.
Investors balanced the encouraging company earnings growth against concerns over rising inflation and supply chain disruptions.
In add the rise in Microsoft helped offset declines in Amazon and Apple after disappointing quarterly earnings from the online retailer and iPhone maker.
Thus, the Dow Jones Industrial Average rose 89.08 points, or 0.25%, to 35,819.56, the S&P 500 gained 8.96 points, or 0.19%, to 4,605.38 and the Nasdaq Composite added 50.27 points, or 0.33%, to 15,498.39.
The S&P 500 advanced 1.3% for the week, its fourth straight weekly climb, marking its longest weekly streak of gains since April.
For the month, the S&P rose 6.9%, its biggest monthly rise since November 2020.
The Dow rose 0.4% for the week while the Nasdaq gained 2.7%, also marking four straight weekly gains for each.
The Dow climbed 5.8% for October, its best monthly performance since March, while the Nasdaq jumped 7.3% for its biggest monthly percentage gain since November 2020.
Coming back on grains market, corn has quietly woken up from its recent slumber.
Corn prices, indeed, pushed another 1% higher last Friday mainly thanks to export optimism and rainy weather throughout the week that has slowed down harvest in many areas.
On Friday private exporters announced to USDA the sale of 279.415 metric tons of corn for delivery to Mexico during the 2021/22 marketing year, which began September 1.
Corn market saw benefit past week also from a recovering energy sector with ethanol margins reaching the highest levels since 2015.
EIA numbers reported Wednesday showing weekly ethanol production reached the 2nd highest level ever while stocks continued to decline.
Meantime, USDA reported the week’s average corn oil price ranged from 64.25 cents to 65.25 c/lb.
Last week’s prices were 62.9 to 63.7 c/lb on average.
DDGS were $262/ton FOB in the PNW and $235 from the Gulf.
Prior week’s DDGS FOB prices were $254-$262 and $220-$234 respectively.
In support of growth in sustainable jet fuel production President Biden has committed US$1 bn in infrastructure investment and tax credits.
The package also calls for a 4-year extension of the biodiesel tax credit which is currently set to finish at the end of 2022.
House of Representatives Democrat member from Iowa, Cindy Axne, suggested this would put at least $400m back into Iowa’s farmers’ pockets.
However, with global wheat setting new records it would be logical to see also a spillover support for corn from wheat rally.
As we can see, there is a wheat/corn price spread trading over 200c/bu, thus there is plenty of room to move there.
Soybean prices, on its part weren’t able to find much positive traction.
However ultimately the session ended with modest gains thanks to two large sales to unknown destinations, lent enough support for prices to stay in the green.
Private exporters, indeed, announced two large soybean sales to USDA Friday morning.
Both sales are bound for unknown destination, with a total volume of 454.350 metric tonne, and both sales are for delivery during the 2021/22 marketing year, which began September 1.
Ahead of the monthly soy crush report later on this afternoon, traders estimate USDA will confirm 163.3 mbu of beans were processed in September.
NOPA members had previously reported a 153.8 mbu crush.
BO stocks are estimated at 2.19 billion lbs on average.
As for wheat we shuold to note that US spring wheats firmed about 1.5pc to eclispe a 10-year high.
Indeed, Minneapolis HRS wheat hit its highest level since May 2011 reflecting not only the short North American crop but also the global shortage of high protein wheat.
This is also supported by Matif wheat (French milling) trading very close to the 2008 all-time high.
Kansas City contracts, meantime, suffered a moderate profit-taking setback.
In this context, last Friday corn basis bids were steady to mixed across the central U.S. after rising 12 cents higher at an Illinois river terminal while sliding 2 cents lower at two other Midwestern locations.
Soybean basis bids were steady at most Midwestern locations but did climb 10 cents higher at an Indiana processor and 14 cents higher at an Illinois river terminal.
From Canada, ICE canola futures ended mixed on Friday, with nearby contracts boosted by speculative and technical buying amid thin supplies of the oilseed.
Crushing margins remain poor, but a lack of farmer sales of their canola crop has kept a firm floor under prices.
Most-active January canola added $4.50 to settle at $959.80 per tonne.
The contract ended the last trading day of October up 3.7% for the week and 9.1% in the month.
Spot November futures surged $61.10 to $1,058.00 in very thin volume trading ahead of contract expiration on Nov. 12.
The contract notched a fresh life-of-contract high and the loftiest level on record for a front-month contract.
Distant month contracts closed mostly lower, anchored by profit taking.
From South America, Brazil corn domestic prices have fallen in recent weeks, sliding on the back of resupply arriving from Argentina and amid fears over the trade in some key livestock export options after beef production heading to China was halted amid a disease outbreak.
That comes despite USDA trimmed its outlook to 86 million mt, a reduction of over 20% versus initial expectations.
Argentina, indeed, has provided a constant flow of corn to its neighbour in order to plug the expected shortfall in domestic supply and line-up data still shows 180,000 mt of corn expected to load in the Up River complex bound for Brazil early November.
Domestic prices have wilted as a result, with the agroeconomic unit of Sao Paulo university, Cepea, reporting a domestic price of BRL86.89/60 kg bag on Thursday ($258.75/mt), the lowest price since the end of June.
Basis premiums at the FOB Santos hub have also softened with prompt November loading cargoes heard offered at 120 cents over the December futures contract on Friday, down from 147 cents at the same point last week.
On the other hand, the Buenos Aires Grains Exchange reported Argentine wheat was 6.7% harvested.
Meantime, the BAGE raised their production forecast by 600k MT to 19.8 MMT, that is up 3pc from the prior week.
BAGE also reported Argentina soybean planting at 4.6% complete as of 10/28.
On European market, the European Union has updated crop estimates last Friday.
They now see corn production at 67.8 MMT, down 1 million from the last estimate.
Soft wheat was at 130.3 MMT, down from 131.
Barley was estimated to a total of 51.9 MMT, down 5.
Durum wheat output was cut to 7.4 million tonnes from 8.0 million last month.
Rapeseed was a fraction higher than last month at 17 MMT.
Corn imports into the Union are estimated to a total of 14.5 MMT.
Soft wheat imports are at 30 MMT.
Rapeseed imports at 5.7 MMT.
Meantime, French farmers had harvested 54% of this year’s grain maize crop by Oct. 25, farm office FranceAgriMer said on this morning.
That underline, a field work far behind the usual pace.
Indeed, in spite harvest progress had advanced from 32% a week earlier, it is compared with 87% at the same stage last year.
Additionally, this year’s harvest was also showing an 11-day lag compared with the average pace of the past five years.
As for winter grains sowing, meantime, FranceAgriMer said 61% of the expected soft wheat area had been drilled by Oct. 25, up from 40% a week earlier.
That is however behind the 63% achieved at the same stage last year.
Winter barley sowing, in contrast, was 78% complete, against 59% the previous week and 77% a year earlier.
Still durum wheat sowing is under way, with only 7% of the expected area drilled.
From North Africa, Egypt is in talks with Citigroup Inc. to reach a deal on hedging against global wheat-price increases, the supply minister said, as the world’s biggest buyer of the grain struggles with rising commodity prices.
From the Black Sea basin, according to the agriculture ministry, Ukrainian farms have harvested 60.7 million tonnes of grain from 81% of its sowing area, with the yield averaging 4.72 tonnes per hectare.
The volume includes 32.3 million tonnes of wheat, 9.6 million tonnes of barley, 15.6 million tonnes of corn and small volumes of other grains, the ministry said.
Favourable weather could help Ukraine to harvest a record 80.3 million tonnes of grain this year.
On the other hand, Russia will harvest more than 123 million tonnes of grain after drying and cleaning in 2021, the agriculture minister said last Thursday, cutting the official estimate after months of being more positive about the crop than main analysts have been.
The ministry had previously expected this year’s crop to reach 127.4 million tonnes.
IKAR, one of the leading agriculture consultancies in Moscow, on Thursday said that it expects Russia’s 2021 grain crop to reach between 119.5 million and 121.7 million tonnes, of which 40 million to 41.5 million tonnes would be available for export.
On this wake, the Russian agriculture ministry continued to amend the export tax for wheat, barley and corn.
In particular, the export duty is for the week November 10-16, 2021, as the local Government, declared Oct 30 – Nov 7 as non working days.
That means that current rates are valid till Nov 09, 2021!
In detail, as for wheat the export duty will be increased to 69.9 USD/t, from 67 USD/t prior week.
The indicative price moved up from 295.8 USD/t to 299.9 USD/t.
As for corn the export duty will grow to 50.10 USD/t from 49.7 USD/t prior week.
The indicative price moved up from 256 USD/t to 256.6 USD/t.
At the same time, the tariff for barley will increase to 54.8 USD/t from 42.6 USD/t prior week.
The indicative price moved up from 245.9 USD/t to 263.3 USD/t.
From the Middle Kingdom, Dalian (China) corn has worked its way higher, closing up again on Friday and now flirting with the 50pc retracement level from May’s high print.
DDGS prices in China were 2,450 yuan/MT past week (~ $422/ton).
From Australia, growers through northern NSW saw rain delays on Friday, but they got going again by the weekend.
They are trying to get as much in as they can before the next rainfall event.
BOM is calling for a widespread >20mm across large area of the NSW cropping region.
WA growers also continue to gain momentum in the paddocks.
While light showers are on the radar for southern WA, the next 8-10 days look to be a good run.
South Australian growers still getting a full assessment on the damage to crops in the affected areas from the storm last week.
Harvest in the northern parts of the state is underway and will restart early barley today.
Weather will throws in some delays and challenges as Wednesday is predicted to be another SA rainfall event across most of the state.
In this context, Aussie local markets finished the week with some green on the cash boards.
We saw protein wheat in the north stronger by A$5-6/t from previous trading day and other port zones were a buck or 2 stronger.
Barley was a fraction softer on the cash boards, but $2-3/t stronger on the deferred January-plus markets.
Canola was down $10/t across the boards in the port zones and domestic crush bids were also down.
On international trade scenario, the Ethiopian government may be taking a new direction to give the procurement process for ETBC to diversify the procurement process besides PPPDS.
ETBC launched 400 k wheat tender on 18/10 closing 30/11 whilst PPPDS issued a 300k wheat tender on 5/10 closing 9/11.
Saudi Arabia’s, SAGO bought 1.268.000 tonnes of hard wheat 12.5% in its tender at an average price of $377.54 cost and freight (C&F) a tonne.
The arrival period is January/April 2022.
Egypt’s GASC says seeking vegetable oils in tender for arrival December 20 – January 10
GASC said it was seeking offers for 30,000 tonnes of soyoil and 10,000 tonnes of sunflower oil.
We wish you a good start to the week.
