US farm markets, moved uniformly lower last Friday, with traders have begun squaring positions ahead of the next World Agricultural Supply and Demand Estimates (WASDE) report, out tomorrow morning.
Operators believe that the agency will show bigger corn and soybean yield and production potential versus its October estimates, therefore, despite there were a solid round of export sales data last week they were little-impressed.
Consequently, corn prices fell around 1.12%.
Soybeans slid around 1.41% lower.
CBOT December contracts lost nearly 0.94%.
Kansas wheat contracts fell by 0,92%.
Minneapolis wheat contracts were 0,74% lower.
On macro markets, oil prices rose on this morning as positive signs for global economic growth supported the outlook for energy demand, while Saudi Arabia’s state-owned producer Aramco raised the official selling price for its crude.
In add U.S. President Joe Biden on Saturday welcomed congressional passage of a long-delayed $1 trillion infrastructure bill, which may boost growth and demand for fuel.
Thus Brent crude was up by 86 cents or 1% at $83.60 a barrel by 07:45 GMT, after dropping nearly 2% last week.
U.S. oil gained 89 cents or 1.1% to $82.16, having declined almost 3% through Friday.
On equities market, On Friday, the S&P 500 rose 0.4% to a record after the government reported companies hired 531,000 people in October, more than the consensus forecast of 450,000.
The Dow gained 0.6%, also to a new high.
The Nasdaq composite added 0.2%.
Meantime, global stock markets and Wall Street futures declined on this morning after strong last week results and a double-digit rise in Chinese exports.
In fact, Asian shares on this morning have seen Tokyo’s Nikkei 225 fell 0.4% to 29,507.05 while the Shanghai Composite Index gained 0.2% to 2,498.63.
The Hang Seng in Hong Kong lost 0.4% to 34,763.77.
The Kospi in Seoul retreated 0.3% to 2,960.20 and Sydney’s S&P-ASX 200 lost less than 0.1% to 7,452.20.
India’s Sensex rose 0.9% to 60,588.11.
New Zealand retreated while Southeast Asia markets rose.
This week, the U.S. government is due to report inflation.
Thus Investors are worried that the Federal Reserve and other central banks might feel pressure to cool rising prices by pulling back stimulus that is boosting stock prices.
Coming back on grains market, NOAA’s updated 7-day QPF shows some moisture for this week.
The majority of the U.S. will get at least a tenth of an inch. Most of the ECB from WI to OK to N.
AL to OH will get more precip, though limited to 1 1/4” accumulated.
A pocket along the IL/MO border may reach 2” through the week.
Meantime, pre-WASDE estimates are as follows:
Corn US ending stocks = 1.484 billion bushels (bbu) (Oct 1.500bbu);
Soybeans US endings stocks = 366 million bushels (mbu) (Oct 320mbu);
Wheat US ending stocks = 582mbu (Oct 580mbu);
Wheat Global ending stocks = 276.9 million tonnes (Mt) (Oct 277.2Mt);
USDA’s FAS sees Indian wheat exports at 5Mt, double last year.
In this context, last Friday the weekly CoT report showed that managed money was 324,560 contracts net long on 11/2 about corn.
That was 79,770 contracts more net long from the week prior, shown as net new buying.
The commercials were adding short hedges as well, extending their net short 68k to 559,794 contracts.
As for soybeans the report showed soybean spec traders were 18,770 contracts more net long as of 11/2.
That came as net new buying through the week, and pushed their net long to 42,681 contracts.
Commercial soybean traders took a risk off approach through the week, however the long liquidation out weighed the commercial short covering for a 16k contract stronger net short of 173,655 contracts.
In soymeal, CFTC data showed managed money reduced their net short 8,807 contracts to 6,334.
BO spec traders were 3,117 contracts more net long at 88,748 contracts.
As for wheat, CFTC data showed managed money flipped back to net long in SRW, as equal short covering and net new buying moved their net position 14,519 contracts.
In HRW managed money funds were 4,342 contracts more net long to 57,315 by way of short covering through the week that ended 11/2.
In MPLS wheat, the CoT report showed net new buying from the spec funds, pushing their net long to 17,389 contracts.
Consequently, on Friday Chicago and KC wheat settled down 7.25usc/bu, while Minni fell 7.5usc/bu.
Corn shed 6.25usc/bu.
Soybeans fell 17.25usc/bu, while meal and bean oil fell USD$3.10/st and 0.8usc/lb respectively.
From South America, Argentine corn planting had only progressed 0.8% to 28.4% for the week that ended 11/4.
The Buenos Aires Grains Exchange still expects 7.1m HA for 21/22 corn production.
The Buenos Aires Grains Exchange also noted that 21/22 bean planting in Argentina is 7.1% complete.
That is up from 4.6% last week.
Consequentily BAGE maintained 16.5m HA as their expected area.
On European market, Euronext ended the week on a negative note, still weighed down by technical considerations and the wait for the next USDA report.
The rise of the dollar was, obviusly a additional factor of decline.
Corn harvests are continuing, meantime, but at a rate delayed by difficulties in logistics and grain drying, in a context of rising energy costs.
According to FranceAgriMer on November 1, 73% of corn areas would be harvested against 54% last week and against 93% last year to date.
80% of wheat areas would be sown against 61% last week.
90% of barley areas would be sown against 78% last week.
Rapeseed prices, meantime, gave ground in the wake of canola and soybeans.
From the Black Sea basin, drougth persists in particular in Ukraine affecting around 1/3 of the areas and thereby reducing the estimates of autumn sowing on winter cereals.
According to the Ukrainian Minister of Agriculture 87% of the grain area has been harvested to date, including a harvest to date of 32.3 million tonnes of wheat, 9.6 million tonnes of barley and 22.8 million tonnes of corn.
Meantime, Ukraine’s wheat exports are up 17pc to 12.8Mt so far this season according to the Agriculture Ministry.
Total grain exports are up 19pc to 20.4Mt, 4.5Mt of which is barley and 2.8Mt is corn.
In this context, Friday wheat prices were up slightly in Ukraine while those of Russia fell slightly.
In Ukraine, corn prices lost ground against a backdrop of progress in harvesting operations estimated to have reached 73% on November 1.
From the Middle Kingdom, USDA’s Ag Attache estimates China’s soybean imports at 101 MMT for the 21/22 season.
That compares with 99 MMT last season and matches USDA’s October forecast for 2021/22.
FromAustralia, we are set to see more rain this week.
That, will continue to delay up harvest and the big question for the markets is now: how the rain will affect qualitiy of Aussie crops?
How much downgraded grain will we start to see when the headers roll again?
Meantime, Australia exported 1,309,094 tonnes of wheat in September, down 38 per cent from the August total of 2,115,064t, according to the latest export data from the Australian Bureau of Statistics (ABS).
South Korea on 213,506t was the biggest market for September exports, followed by China on 135,713t and Indonesia on 119,600t.
Other major volume markets included The Philippines on 98,808t, Japan on 83,805 and Italy.
Italy has been a volume buyer of Australian durum all year.
In In August and September bougth 56.322 t and 50.500 t respectvily, for a total of 106.822 t.
Italy also bougth its second cargo ( 27.919 t) of Australian bread wheat for the year loaded in September to take the total shipped for the month to 80,219t.
From October, Australian export data will reflect new-crop wheat being shipped out of the Central Queensland ports of Gladstone and Mackay as old-crop shipments continue to run down carryover stocks.
Australian canola export pace off to a flying start with 600,000t nominated on the stem for November, double last year and bigger than the biggest month of last season.
A large portion of this is WA however we could see some delays with current harvesting conditions across the country providing its issues.
In this context, wheat finished last week a touch firmer again.
Protein markets in particular were stronger overall, gains of $15-20t seen in northern NSW.
Feed grades on AGP, SFW and FED came under pressure in southern markets.
Trade market barley remained relatively flat over the course of last week.
Grower bids were much the same, Victorian track finishing the week around $275-280/t and in the west Kwinana was bid $301/t FIS to the grower on Friday.
Canola markets bounced around during last week; up $10/t one day and down $10/t the next. Kwinana was left bid on Friday at $1000/t while east coast track was valued around $890/t.
On the international scene, little activity on Friday.
It should to be noted that Pakistan has again canceled its latest tender for milling wheat due to prices deemed too high.
Author: Sandro F. Puglisi
