US farm markets posted another round of strong prices past week.
On Feb. 9, USDA released its monthly World Agricultural Supply and Demand Estimates (WASDE), making more cuts to South American crop production due to dry conditions.
Last Thursday’s monthly inflationary number for January at 7.5 percent in USA was the highest since February of 1982 and above Wall Street expectations.
That trigghered a broad sold off in equities markets, also hitting a large numbers of commodities ag.
However, last Thursday, overnigth there was another big change in the commodities as a number of key markets tied to Russia made big moves late in the day, including crude oil and Chicago SRW wheat.
Thus, the dam broke on Friday morning when the markets were flooded by headlines concerning the seemingly inevitable invasion of Ukraine by Russia, as Russia had moved a number of “cruisers, submarines, and other warships” into the Black Sea and Mediterranean.
That was seen a clear indication the expected invasion will come sooner rather than later.
As we know, for the wheat market, combined Ukraine and Russia account for roughly 30% of global exports annually.
If Ukraine can’t ship from its Black Sea ports, and the world decides to boycott Russian grain, the other major global wheat exporters, US includes, will be called upon to pick up the slack.
Thus, corn prices posted new contract highs past week and closed out 4.91% higher from the prior Friday.
Soybeans continued their rally, peaking over $16 for a short time last Thursday and posting for the week, a 1.9% gain.
Since Jan. 1, March corn prices are up 57.5¢ and March soybean prices are up $2.44.
Soybean meal was up 2.86% week on week.
Soy oil was up a modest 0.55% for the week.
Meantime, propped up by the strong Friday session, the wheat complex was the winner for the week with MPLS spring wheat led the way, up 5.31%.
KC rallied by 4.90%.
CBOT was 4.52% higher.
Particularly, corn futures ended the end week session up 1.44%.
Soybean futures were up 0.56%.
Soymeal rose 0.57%.
Soy oil jumped 1.88%.
CBOT soft red winter (SRW) futures bounced 3.4%.
KCBT hard red winter (HRW) futures were up 2.9%.
MGE hard red spring (HRS) futures gained 2.04%.
In energy market, oil prices ended 3% higher last Friday as escalating fears of an invasion of Ukraine by Russia, added to concerns over tight global crude supplies.
Thus, Brent crude futures settled $3.03, or 3.3%, higher at $94.44 a barrel, while U.S. West Texas Intermediate crude rose $3.22, or 3.6%, to $93.10 a barrel.
Both benchmarks touched their highest since late 2014, surpassing the highs hit on Monday, and posted their eighth consecutive week of gains.
Brent indeed, ended the week 1.25% higher, while WTI rose 0.86%%.
Trading volumes spiked in the last hour of trading, with volumes for global benchmark Brent climbing to their highest in more than two months.
The International Energy Agency raised its 2022 demand forecast and expects global demand to expand by 3.2 million barrels per day (bpd) this year, reaching an all-time record 100.6 million bpd.
Meantime, the IEA said that Saudi Arabia and the United Arab Emirates could help to calm volatile oil markets if they pumped more crude, adding that the OPEC+ alliance produced 900,000 bpd below target in January.
In the United States, drillers added the most oil rigs in a week in four years, with the rig count, an indicator of future production, rising 19 to 516, its highest since April 2020, energy services firm Baker Hughes Co said.
Meantime, the Biden administration responded to high prices by again stating past week that it has been talking with large producers about more output, as well as the possibility of additional strategic releases from large consumers, as it did late last year.
Also, Indirect U.S.-Iran nuclear talks resumed past week after a 10-day break.
A deal could see the lifting of sanctions on Iranian oil and ease supply tightness even though a senior Iranian security official said earlier that progress in talks was becoming “more difficult”.
Meantime, oil prices hit a new highest in more than seven years on this morning as Brent crude futures was at $95.65 a barrel by 07:42 GMT, up $1.21, or 1.3%, after earlier hitting a peak of $96.16, the highest since October 2014.
U.S. West Texas Intermediate (WTI) crude rose $1.28, or 1.4%, to $94.38 a barrel, hovering near a session-high of $94.94, the loftiest since September 2014.
Comments from the United States about an imminent attack by Russia on Ukraine have rattled global financial markets.
Thus, “oil prices will remain extremely volatile and sensitive to incremental updates regarding the Ukraine situation.”
In add, according to JP Morgan a supercycle is in full swing and “oil prices likely to overshoot to $125 a barrel on widening spare capacity risk premium”.
In the freight market, the Baltic Exchange’s dry bulk sea freight index rose for a fourth straight session last Friday and registered its biggest weekly gain since June 2021, supported by strong demand across vessel segments.
The overall index, which factors in rates for capesize, panamax and supramax vessels, indeed, rose 37 points, or 1.9%, to 1,977, its highest level since Jan. 12.
The index has risen nearly 39% past week.
The capesize index eased 47 points, or 2.5%, to 1,857, even though gained nearly 50% during the week.
Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, fell by $392 to $15,397.
The panamax index gained 70 points, or 3%, to 2,403.
Average daily earnings for panamaxes, which ferry 60,000-70,000 tonne coal or grain cargoes, rose by $625 to $21,623.
The supramax index climbed 101 points to 2,158.
In contrast, on week 6, freight rates continued to fall in the Azov and Black Sea region.
The rate for a shipment of 3,000 tons of wheat from Azov to the Marmara Sea ports is $34 per ton.
According to Sea Lines shipbrokers, the wheat and corn market is still in a deplorable state, there are practically no deals from Russian ports.
Ukrainian wheat is trading somewhat better, so some shipowners prefer cargoes from the ports of the Black Sea.
That prevents the Sea of Azov freight market from collapsing.
Most active trade is observed for subcultures now, and the most popular destination is Italy.
As a result, rates to the Adriatic ports do not fall as quickly as to other destinations.
Importantly, during past week, quota distribution for wheat, corn and barley shipment for the period starting February, 15 till the end of June, 2022 has been published.
Thus, now charterers can start planning shipments of these grain products for the upcoming months.
According to Sea Lines, on week 6, freight rates for wheat parcels from Azov make $32 to the Black Sea, $34 to Marmara, $54 to Mersin and $59 to Egypt.
Freight rates from Rostov AB (after bridge) are $1 above, from Rostov BB (before bridge) the same, from Yeisk and Taganrog $1 below, and from Temryuk $3 below those from the port of Azov.
In the Caspian, freight rates went up.
On week 6, freight rates for shipping corn by 3,000 dwt bulkers to Iran make $29 from Aktau, $33 from Makhachkala, and $40 from Astrakhan.
In equities markets, Wall Street stocks ended sharply lower last Friday for the second straight session, as investors fretted about deepening tensions between Russia and Ukraine.
Nine of the 11 major S&P 500 sector indexes declined, led by technology, down 3.0%, and consumer discretionary, down 2.8%.
The energy sector index surged 2.8% as oil prices hit seven-year highs.
With investors already fretting about inflation and rising interest rates, selling on Wall Street accelerated after Washington warned that Russia had massed enough troops near Ukraine to launch a major invasion, and that an attack could begin any day.
Thus Nvidia Corp tumbled 7.3%, Amazon.com Inc dropped 3.6%, and Apple Inc and Microsoft Corp both lost over 2%.
The four companies weighed more than any others on the S&P 500’s decline.
The Philadelphia Semiconductor index sank 4.83%.
Under Armour Inc slumped 12.5% after warning that its profit margin would be under pressure in the current quarter.
Online real-estate platform Zillow Group Inc, in contrast, jumped 12.7% after beating Wall Street estimates for quarterly sales, boosted by an 11-fold revenue increase in its homes segment.
In this context, last Friday the Dow Jones Industrial Average fell 1.43% to end at 34,738.06 points, while the S&P 500 lost 1.90% at 4,418.64.
The Nasdaq Composite dropped 2.78% to 13,791.15.
For the week, the Dow slipped 1%, the S&P 500 fell 1.8% and the Nasdaq shed 2.2%.
Wall Street’s Friday sell-off followed the slump on Thursday, when data showed consumer prices surged 7.5% in January.
That was the biggest annual increase in 40 years.
The CBOE volatility index, also known as Wall Street’s fear gauge, was up for a second straight session and hit its highest level since the end of January.
A University of Michigan survey showed U.S. consumer sentiment fell to its lowest in more than a decade in early February on expectations that inflation would continue to rise in the near term.
Meantime, the dollar index, which tracks the greenback versus a basket of six currencies closed at 96.073 points, soaring for the week more then 0.6%.
Meantime, Asian stock markets fell on this morning.
The Nikkei 225 in Tokyo was down 2.1% to 27,117.18 at midday after being off 2.6% earlier.
The Hang Seng in Hong Kong lost 1.2% to 24,594.21. The Kospi in Seoul retreated 1.2% to 2,714.33.
The Shanghai Composite Index shed 0.6% to 3,441.23 while Sydney’s S&P-ASX 200 gained 0.2% to 7,234.20.
India’s Sensex opened down 1.7% at 57,153.59. New Zealand, Bangkok and Jakarta declined while Singapore was unchanged.
On the weather side, much needed rain fell across Texas, eastern Oklahoma, and eastern Kansas past week.
In Colorado above average snowfall in January has improved soil moisture.
In Nebraska and Kansas, a broad area of moderate drought and abnormal dryness expanded.
In those areas, 30-to-90-day precipitation totals ranked in the top 5 driest on record.
Wyoming also saw dry conditions expand.
In the PNW, a wet fall and especially rainy December helped relieve the 2021 drought.
However, concern about moisture conditions is growing following a second week of dry weather in the Pacific Northwest.
Some additional rain and snow could hit parts of the eastern Corn Belt and Great Lakes region until Tuesday, per the latest precipitation map from NOAA.
The agency’s outlook predicts seasonally warm weather for the entire United States between February 18 and February 24, with a dry pattern holding over much of the Plains during that time.
Meantime, past week Texas’s State Crop Progress report had showed winter wheat conditions had improved for the areas that received decent amounts of moisture.
Particularly, winter wheat headed reached 7 percent, up 5 points from the previous year and 3 points above normal as of 2/6.
Conditions showed 0% for excellent and just 9% for good – with a whopping 71% poor/very poor.
Oats headed reached 6 percent, up 1 point from the previous year and up 4 points from normal.
On the demand side, Thursday’s Export Sales data showed poor corn bookings of 589,100 MT for the week that ended 2/3.
The 21/22 marketing year export commitments (shipped plus outstanding sales) are still above the normal pace to reach USDA’s projection at 74% vs. the 69% average.
Accumulated exports are 34% of the USDA projection, 2% ahead of the average pace.
As for soybeans, data indicated 1.596 MMT of soybeans were booked during the week of 2/3.
Total US soybean export commitments are now 46.826 MMT, 21% smaller than last year’s record buying pace.
US Exporters have now booked 84% of the USDA full year estimate, 3% above the average pace.
Shipments have hit 68% of the full year WASDE forecast, running ahead of the 64% average pace.
As for wheat, report showed just 84,800 MT in wheat bookings, up slightly from the week prior, but still quite low.
That put export commitments at 17.571 MMT, or 80% of USDA’s newly updated full year forecast.
Normally they would be 86% by now.
Shipments to date are still 22% smaller than year ago, at 12.987 MMT.
That is 58% of the USDA projection vs the 63% average pace.
The EIA also gave us updated ethanol production data last Wednesday, showing output dropping 47,000 barrels/day to 994,000 bpd.
That did give stocks a chance to pull back 1.055 million barrels after building just under 4.5 million in the previous 4 weeks.
Meantime, private exporters reported to the USDA last Friday sales of 108,000 metric tons of soybeans for delivery to China during the 2022/2023 marketing year;
sales of 128,000 metric tons of corn for delivery to Japan during the 2021/2022 marketing year;
Sales of 30,000 metric tons of soybean oil for delivery to unknown destinations during the 2021/2022 marketing year.
On the other hand, on Friday CFTC data showed that managed money funds closed 27.9k longs through the week leading into the report.
That reduced their net long by 35,219 contracts to 337,332 contracts.
The commercials reduced shorts, but added long hedges for a 22,679k contract weaker net short.
As for soybeans, the report showed soybean spec traders were adding longs going into the USDA report.
That extended their net long by 11,827 contracts to 166,315 contracts.
The commercials were also adding hedges going into the report, with a 41,943 contract boost to OI and a 5,867 contract stronger net short.
In soymeal spec traders were net buyers as well, extending their net long by 11,395 contracts to 88,138 as of 2/8.
Soy oil traders were 7,694 contracts less net long to 72,782 contracts.
As for wheat, data showed CBT spec traders were 3,100 contracts more net short to 29,552 contracts on 2/8.
In KC wheat funds were closing their longs for a 3,326 contract weaker net long of 34,473 contracts.
For Minneapolis wheat, spec traders were 364 contracts less net long to 3,596 contracts.
In this context, corn basis bids were steady to weak across the central U.S. last Friday after sliding 2 cents lower at a Nebraska elevator and 5 cents lower at an Illinois river terminal.
Soybean basis bids tumbled 16 cents lower at an Illinois river terminal and dropped 5 cents at an Ohio elevator while holding steady across other Midwestern locations.
Wheat basis past week in both the Gulf and Pacific Northwest (PNW) was down for HRW compared to prior week and flat for HRS and SRW.
Soft white prices were also lower.
Transportation logistics have improved since the beginning of the year.
Buyers who make up the foundation of U.S. wheat exports continue filling their regular tenders at U.S. ports.
For other importers, volatile futures prices are encouraging a more “just-in-time” buying pattern that reflected the wide range of last weekly export sales.
Meantime, the funds were net buyers on Friday for 4,500 lots of corn, 5,000 lots of soybeans and 13,500 lots of wheat.
From South America, CONAB projection for corn is at 112.34 MMT.
Conab reduced its estimate for Brazilian soybean production to 125.5 MMT.
That was a major drop from 140 MMT last month and well below USDA’s new 134 MMT figure.
Meantime, the harvesting of Brazil’s 2021/2022 soybean crop reached 25.6% of the estimated area, the agribusiness consultancy Safras & Mercado said last Friday.
The average of the last five years for the period is 16.2%, the data showed.
According to the consultancy, this season’s harvest is being boosted by the strong performance of the Brazilian state of Mato Grosso, the main producer of soy in the country, with 60% of harvested areas – an advance of 14 percentage points this week.
The figure also exceeds the 22% registered a year earlier and the historical average for the period, of 41.6% in Mato Grosso.
Safras & Mercado, became the latest private forecaster in Brazil to cut its 2021/2022 soybean crop estimate due to dry weather. The firm pegged the harvest at 127.1 million tonnes, down 5 million tonnes from January.
On the other hand, the Buenos Aires Grains Exchange mentioned that 51 MMT of corn in Argentina is still in play with timely rains, though mentioned persistent dryness would warrant further cuts.
Rosario Grains Exchange also maintained their corn estimate, though at 48 MMT for February.
The Rosario Grains Exchange revised their Argentina soy output 500k MT higher to 40.5 MMT.
Paraguay’s soybean harvest could fall by as much as 50% to some 5 million tons in what would be its lowest level in the last decade due to a drought affecting the region, Paraguay’s Agriculture and Livestock minister, Santiago Bertoni, told Reuters last Friday.
Paraguay, the world’s fourth-largest exporter of the oilseed, produced close to 10 million tons in the previous cycle.
But yields in the 2021/2022 season fell in most crop areas to about 1 ton per hectare, far below the average of 2.8 tons per hectare.
Bertoni said they were forecasting a 50% reduction in production volumes from the previous season to around 5 million tons.
A lack of rain in December and January affected the so-called early soybean harvest, which covers about 1 million hectares of the 3.7 million hectares harvested during the season.
The last time Paraguay produced less than 5 million tons of soybeans was in the 2011/2012 cycle, when volumes fell to just over 4 million tons, also due to a prolonged drought, according to data from the Paraguayan Chamber of Soybean Exporters.
Paraguay exports over half of the soybeans it produces and its economy depends heavily on shipments abroad of raw materials.
Bertoni estimated a reduction in foreign exchange income of between $1.5 billion and $2.0 billion this year due to the drop in soybean production.
Falling soybean output has prompted mills to consider importing the oilseed for the first time from neighboring countries Argentina, Brazil or Bolivia, which are reeling from the drought.
In Europe, Euronext ended past week on a positive note in a market still marked by the Ukrainian crisis.
The Russian announcement of the deployment of maritime troops in the Black Sea and in the Sea of Azov indeed reinforced the risk premiums and got more credibility to the scenario of a military invasion in Ukraine.
The impact of the “military exercises” on Ukrainian trade flows was however still subject to debate among local observers as Russia’s naval exercises and the closure of traditional shipping routes have so far not affected the Ukrainian grain export market, traders said last Friday.
“It could be a big event or nothing”.
“The main question is if and for how long shipping could be disrupted by Russian naval exercises.”
However, this news caused waves in the market past Friday, with a renewed debate about whether export demand could be transferred to west Europe.
Meantime, France’s farm ministry last Thursday lowered its estimate of the area sown with winter soft wheat for the 2022 harvest to 4.75 million hectares (mln ha) from 4.92 mln ha in its initial projection in December.
The reduced estimate was down 4.3% compared with the 4.96 mln ha harvested in 2021 and was also 1% lower than the average area of the past five years, the ministry said in a crop report.
Ditto for durum for which the projected area for the 2022 harvest is at 277.000 ha, down 2.5% compared with the 284.000 ha in 2021 and also lower than the average area of the past five years.
The expected winter barley area was increased to 1.25 mln ha from 1.23 mln ha previously, now up 4.6% from last year’s harvest but 1.6% below the five-year average.
For winter rapeseed, France’s main oilseed crop, the area for 2022 was revised up to 1.16 mln ha from 1.10 mln ha in December.
That was now 18% above the 2021 level although 6.9% below the five-year average.
Weather conditions were currently favourable for crop development, the ministry said.
For spring sowing in the coming months, it said a survey of farmer intentions carried out in December suggested that the spring barley area would be stable to lower compared with last year.
Among other spring crops, farmer plans pointed to a drop of at least 6% in the overall area of grain and fodder maize (corn).
For sugar beet, the area was seen stable to down 3%, while for sunflower seed sowings were expected to decline by at least 3%.
Expectations for EU soft wheat production in 2022/23 is currently at 128 MMT.
Warm winter weather means wheat crops are in good condition in the four main European production countries with positive conditions created for the summer 2022 harvest, crop experts said last Friday.
Wheat in France, Germany, Britain and Poland has generally not suffered frost damage, although frost is still possible in coming weeks.
Wheat in top producer France benefited from moderate weather this winter while rainfall in the coming days may maintain favourable growth.
German wheat has not suffered significant frost damage so far. “Widespread rain in the past week was also welcome and water shortages are not a serious problem,” one German grains analyst said.
Germany’s winter wheat area for the 2022 crop was increased 0.4% on the year to 2.87 million hectares.
Britain’s wheat crop is in generally good condition and production could potentially rise slightly from last year although high fertilizer costs could limit the extent of any increase.
Britain’s wheat area for this year’s harvest has increased 1.3% to 1.81 million hectares.
Poland’s winter wheat is in good condition with no major frost damage so far and rain has also been adequate, said Wojtek Sabaranski of analysts Sparks Polska.
Poland’s winter wheat area is estimated to be little changed at over 2.1 million hectares.
Bulgaria prospects for MY2022/23 winter grain crops remain favorable due to the relatively mild winter, sufficient soil moisture reserves, and snow cover.
Higher input costs, however, may have a negative impact on the average yields due to expected lower application of inputs.
There are market speculations for reduced corn plantings in the spring in favor of higher sunflower area planted due to the increasing cost of products.
Grain exports in MY2021/22 had a strong start early in the season but slowed down in December and January.
Due to the current complex market/logistics situation in the Black Sea region, wheat exports may lose their competitiveness and the country may generate higher than usual ending stocks.
Local feed consumption remains limited due to high feed prices and low to negative margins in the livestock and poultry industries as accelerating food inflation takes its toll on staple products such as bread, bakery, and confectionary products.
Meantime, Consultancy Strategie Grains lowered past week its estimates for 2021/22 EU soft wheat exports to 30,4 MMT, citing increased competition from South America and the Black Sea region, along with lower expectations for imports by Algeria and Egypt.
However, according to Agritel analysts, French wheat exports to Europe must be revised upwards, even though the third country export target of 9 million tonnes could be difficult to achieve, barring military conflict in the Black Sea basin which would then encourage importing countries to further secure their supplies from Western Europe.
From North Africa, Egypt’s supply minister said that tensions between Russia and Ukraine, raised uncertainty in the market, with the government currently working on several protective measures, according to state news agency MENA.
Thus, the government is working on diversifying its wheat import origins in an effort to safeguard its strategic reserves, Supply Minister Ali Moselhy told MENA.
He added that studies regarding hedging against a rise in commodity prices are still ongoing.
Meantime, Egypt’s strategic reserves of wheat currently stand at 5.4 months, he added.
Egypt, shipped around 50% of its wheat purchases from Russia last year and around 30% from Ukraine, according to data from two regional traders.
From the Black Sea basin, per latest data released by Rosstat, Russian gross grain harvest in 2021 amounted to 121.4 MMT in net weight, while in December it was estimated at 120.66 MMT.
The result is 9% lower than in 2020, when 133.5 MMT were harvested.
Corn is increased from December 14.6 MMT to 15.2 MMT.
Wheat increased from 75.9 MMT to 76 MMT.
Barley – from 17.98 MMT to 18 MMT.
On the weather side, according to data from the Russian Hydrometeorological Center, in the first ten days of February, the overall conditions for winter crops remained satisfactory.
During this period, in the southern and northern Caucasus federal districts, temperatures were above seasonal norms, in some areas by 3-7 degrees.
It should be noted that the early vegetation of the crops would make them vulnerable in the event of late frosts.
This winter, there was a lot of snowfall in the main Russian wheat-growing regions, which protects the crops well.
Nevertheless, local operators closely monitor the temperatures: in the event of a significant oscillation between day and night, the risk of formation of an ice crust would be high.
Meantime, Russia’s 2022 grain crop is expected to reach 127 million tonnes, including 82.5 million tonnes of wheat, Russian agriculture consultancy IKAR said on Friday.
IKAR forecast grain exports in the 2021/22 season at 46 million tonnes.
Meantime, according to the Interfax news agency quoting an executive of state-controlled United Grain CompanyRussia’s, grain intervention fund plans to buy 1.2 million tonnes this year.
It reported no details such as how much wheat would be in the planned purchases.
On the other hand, last Friday the Russian agriculture ministry has amended the export tax for wheat, barley and corn for the week of February 16-23, 2022, will be $92.8 on wheat, $74.1 on barley and $52.7 on corn.
Indicative prices will be $332.7 for wheat, $290.9 for barley and $260.3 for corn.
That is compared, with prior week (Feb 09-15) when the tax was $93.2 for wheat, $73.3 for barley and $52.7 for corn, while indicative price were $333.2 for wheat, $289.8 for barley and $260.4 for corn.
According to Svetlana Malysh, Balck Sea Agriculture Market Analyst from Refinitiv, “stiff competition with Ukrainian wheat and lack of demand from Turkish buyers undermined Russian wheat bids for coaster-size lots from Azov and returned prices to the October 2021 level.
However, Ukrainian offers remained below the Russian ones.
High wheat stocks amid a record 2021 crop and no export restrictions enable Ukrainian exporters to respond to the market changes quickly and adjust their prices accordingly.
Meantime, some hectic sales of Ukrainian wheat were done though on Russia-Ukraine tensions.”
From the Middle Kingdom, China’s soymeal futures soared to record highs past week on concerns about the scale of South America’s drought-hit soybean crop and tightening meal supplies in domestic markets.
Elevated prices of soymeal, the top protein ingredient in animal feed, could lift production costs for Chinese hog farmers who are already struggling with huge losses, and may push some to exit the market, traders and analysts said.
Particularly, the most actively traded soymeal futures on the Dalian Commodity Exchange rallied to 3,792 yuan ($596.22) per tonne past week, the highest price on record, and up 13% from before the week-long Chinese New Year holiday.
In Shandong, a major processing hub in eastern China, cash prices of soymeal in the district jumped about 10% to more than 4,000 yuan per tonne past week because of tightening supplies after a protracted stretch of low crushing activity.
Meantime, farmers in Shandong, were losing 288 yuan with each pig raised last week.
“If soymeal prices remain high, it will increase farming costs, pushing more farmers – big and small – to further cut production capacity,” said Li Ming, analyst with the agriculture section of Mysteel, a China-based commodity consultancy.
China’s sow herd was 43.29 million head by end of December 2021, down 2.9% from the previous quarter, according to official data.
Soymeal prices rose more than 500 yuan per tonnes after Spring festival”.
“The end users can’t take this. Farmers can’t afford the losses any more, especially the smaller and medium ones, they had been losing since last year”.
($1 = 6.3601 Chinese yuan renminbi).
Meantime, China’s Inner Mongolia region, the country’s second-largest soybean growing area, will expand planting of the oilseed by 287,000 hectares in 2022, state media reported on this morning.
Planting acreage of soybeans in Inner Mongolia in 2021 was about 1.15 million hectares, 13.7% of the country’s total planting acreage of 8.4 million hectares.
The local government will also guide farmers to develop corn-soybean inter-cropping to expand acreage of the oilseed.
From Australia, Australia exported 2,213,001 tonnes of wheat in December, up 45 per cent from the 1,524,772t shipped in November, according to the latest data from the Australian Bureau of Statistics (ABS).
China on 714,842t was the biggest customer by far, taking around one third of total exports, followed by Indonesia on 231,859t, followed by Japan on 173,933t and Malaysia on 172,202t.
In containerised exports, Vietnam on 60,236t was the biggest buyer, followed by Thailand on 25,316t and Taiwan on 25,024t.
It should to note that no shipments were for Italy in December for the second month in a row.
Monthly totals are expected to increase further in January before peaking in February, as full volume from all states is achieved.
In its most recent Australian Export Vessel Lineups report, Lachstock Consulting said the February shipping stem holds 2.5 million tonnes (Mt) of wheat.
It described wheat as “the relative battler”, with pulse, canola and barley cargoes competing successful for time on terminal berths.
“With the recent performance and the shorter month, we can expect that Feb number to roll a chunk into March.
“If achieved…it would put the Western Australian number at 1.1Mt, a record for the season, and pushing above that magic number for the first time.”
Meantime, Aussie local markets finished the week steady but canola values firmed throughout Friday.
Logistics are providing headaches on the sorghum front, with big wait times to unload at depots, but the weather forecast remains clear for another week of harvesting.
Meantime, the South Australian and Federal government have provided assistance to Eyre Peninsula to help it recover damage to paddocks and roads caused by recent heavy rain.
On the international trade scene, Bangladesh wheat tender opening on 15/02/22.
There are 6 suppliers due to offer.
Egypt’s GASC sets international tender for vegoils.
– Arrival is for April 5-25;
– Deadline is for FEB 16;
– Payment is at 180 Lcs and at sight.
Watching this week’s market, we start off with the USDA Export Inspections report will out later in the afternoon.
Today is also the expiration of the February lean hog futures and options.
Weekly EIA data will be released on Wednesday morning.
USDA will release the weekly Export Sales report on Thursday morning.
Friday is the final day for March grain options.
That’s all.
To all of you I wish you a good day and a good start to the week.
Author: Sandro F. Puglisi
