US farm markets plunged past week.
Old crop corn futures, for May delivery, were down 1.84% on Friday and 2.52% for the week.
Soybeans were down 2.19% on Friday, giving back all of prior week’s gain and more, as May was down 7.46% for the week.
Soy meal was down 3.74% on Friday and 7.77% during the week.
Soy oil was down 4.75% for the week, despite gained 1.8% on the end week session.
Chicago wheat was down 2.14% on Friday and plumbted 10.68% on the week.
Kansas wheat fell 1.63% on Friday, losing 8.8% since to the prior Friday.
MGE wheat, took it a little better than the rest of the complex, slipping “only” 3.53% for the week of which 1.32% on Friday session.
In energy markets, oil settled lower on Friday as members of the International Energy Agency (IEA) agreed to join in the largest-ever U.S. oil reserves release, annunced by U.S. President Joe Biden on Thursday.
Brent crude futures were down 32 cents, or 0.3%, at $104.39 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $1.01, or 1%, at $99.27.
Both Brent and U.S. crude benchmarks settled down around 13% past week.
That was their biggest weekly falls in two years.
Particularly, Biden announced a release of 1 million barrels per day (bpd) of crude oil for six months from May, which at 180 million barrels is the largest release ever from the U.S. Strategic Petroleum Reserve.
Member countries of the International Energy Agency did not agree Friday on volumes or the commitments of each country.
Additional details could be known within this week or so.
However, the release of oil inventories is not a persistent source of supply, and if stranded Russian barrels average more than 1 million bpd next year, this will leave 2023 in a deep deficit.
OPEC+, on Thursday stuck with plans for an increase of 432,000 bpd to their May output target despite Western pressure to add more.
U.S. energy firms in the week ending March 25, added oil and natural gas rigs for a second week in a row, though growth in the rig count remains slow.
On thi wake, JPMorgan said in a note it had kept its price forecasts unchanged at $114 a barrel for the second quarter and $101 a barrel in the second half of this year.
Meantime, oil prices inched higher on this morning as worries about tight supply persisted.
Indeed, Russian oil and gas condensate production fell to 11.01 million barrels per day (bpd) in March, from an average output of 11.08 million bpd in February, industry sources said.
Estimates of the Russian oil supply loss range from 1 million to 3 million bpd.
Thus, Brent crude was up 63 cents, or 0.6%, to $105.02 a barrel by 08:05 GMT. U.S. West Texas Intermediate crude gained $1.08, or 1.1%, to $100.35.
Both contracts slipped $1 when markets opened on Monday.
On the bearish side, the United Nations has brokered a two-month truce between the Saudi-led coalition and the Houthi group aligned with Iran for the first time in the seven-year conflict.
Saudi oil facilities have come under attack by the Houthis during the conflict, adding to supply disruption from Russia.
Also, demand concerns from China persist as its most populous city, Shanghai, has extended COVID-19 lockdowns.
China’s transport ministry expects a 20% drop in road traffic and a 55% fall in flights during the three-day Qingming holiday that starts on Sunday due to a flare-up of COVID-19 cases in the country.
In the freight markets, the Baltic Exchange’s dry bulk sea freight index registered a third consecutive weekly decline past Friday, pulled down by falling rates for panamax and supramax vessels.
The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, indeed, fell by one point to 2,357 points, its lowest since March 8.
The index fell 7.4% over the week.
The panamax index dipped 68 points, or 2.2%, to 3,073 points for its lowest level since March 21, down almost 10% on the week.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, lost $613 to $27,660.
The capesize index gained 104 points, or 5.9%, to 1,864 but was down 1.2% for the week.
Average daily earnings for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, increased $867 to $15,460.
The supramax index dropped 53 points to 2,755 points, down 8.8% for the week.
In equity markets, U.S. stock indexes last Friday recovered from early losses and closed slightly higher thaks optimism that the U.S. economy is strong enough to weather interest rate hikes from the Fed.
Indeed, the Mar unemployment rate fell -0.2 to a 2-year low of 3.6%, showing a stronger labor market than expectations of 3.7%.
U.S. Mar nonfarm payrolls rose +431,000, weaker than expectations of +490,000, although Feb payrolls were revised upward to +750,000 from the previously reported +678,000.
U.S. Mar average hourly earnings rose +5.6% y/y, stronger than expectations of +5.5% y/y and the biggest increase in 22 months.
U.S. Feb construction spending rose +0.5% m/m, weaker than expectations of +1.0% m/m.
Stocks, in contrast, early Friday had weighed down after U.S. manufacturing activity last month unexpectedly declined.
The U.S. Mar ISM manufacturing index, indeed, unexpectedly fell -1.5 to a 1-1/2 year low of 57.1, weaker than expectations of an increase to 59.0.
The Mar ISM prices paid sub-index rose +11.5 to a 9-month high of 87.1, stronger than expectations of 80.0.
Also, stocks Friday morning initially moved lower after signs of wage and prices pressures pushed T-note yields higher.
Such expectations drove shorter-term Treasury yields in particular, thus the two-year yield leaped to 2.45% from 2.28% late Thursday.
The two-year yield again rose above the 10-year yield, which was also climbing, but not as quickly.
The 10-year yield rose to 2.38% from 2.33%.
Past Tuesday, the two-year yield briefly had topped the 10-year yield for the first time since 2019, a potentially ominous sign.
In this context, the S&P 500 rose 15.45 points or 0.3% to 4,545.86.
The Dow added 139.92 points or 0.4% to 34,818.27, while the Nasdaq rose 40.98 points or 0.3% to 14,261.50.
Small company stocks outgained the broader market, driving the Russell 2000 by 20.99 points or 1% higher to 2,091.11.
For the week, the Dow slipped 0.1%, the S&P edged up 0.1% and the Nasdaq advanced 0.7%.
The S&P 500 closed out the first quarter last Thursday with its biggest quarterly decline since the COVID-19 pandemic started.
Its loss since the beginning of the year is 4.9%.
In contrast, both the Dow Jones and Nasdaq Composite indexes notched gains for March, thanks largely to a market rally in the two prior weeks.
Meantime, shares in Asia were mostly higher this morning on the wake of upbeat finish last week on Wall Street.
Shanghai was closed for a holiday.
Shares in Hong Kong-traded Chinese companies rose after regulators in Beijing revised rules regarding access of overseas regulators to their audits of companies that have shares listed in overseas markets.
The Chinese financial magazine Caixin reported that China proposed the revisions of rules restricting sharing of financial data of offshore-traded companies to help resolving a longstanding dispute with the U.S. that could result in more than 200 Chinese stocks being kicked off American exchanges.
That would remove a requirement that on-site inspections of overseas-traded Chinese companies mainly be conducted by Chinese regulators, Caixin said.
“Signs of a potential compromise to keep Chinese stocks listed in the U.S. may aid to relieve some of the delisting fears, which is one of the factors weighing on Chinese equities” in the past year, Jun Rong Yeap of IG said in a commentary.
Also, Hong Kong’s embattled leader Carrie Lam, who has governed the global financial hub through the unprecedented upheaval of anti-government protests and COVID-19, said on Monday she will not seek a second five-year term of office..
Lam’s five-year tenure has been marked by huge protests.
Her successor will be picked in May.
Thus, Hong Kong’s Hang Seng index climbed 2.1% to 22,502.31.
In Tokyo, the Nikkei 225 gained 0.3% to 27,736.47.
The Kospi in Seoul rose 0.7%, to 2,757.90.
Sydney’s S&P/ASX 200 gained 0.3% to 7,513.70, while India’s Sensex jumped 1.9% to 60,411.20.
In currencies trading, the dollar index on Friday rose by +0.267 (+0.27%) to 98.627.
However, for the week, the dollar index fell by 0.2%.
The EUR/USD moved lower 0.0024 (-0.22%) to 1.1065 Friday on weaker-than-expected Eurozone economic data and inflation concerns.
The USD/JPY Friday moved moderately higher by +0.88 (+0.73%) to 122.54.
The jump in US T-note yields Friday weighed on the yen and pushed USD/JPY higher, while a slide in Japanese business confidence pressured the yen.
For the week, the EUR/USD was up 0.75%, while the USD/JPY was up 0.39%.
On the weather side, increasingly stormy conditions expected to impact the Pacific Northwest, to the northern High Plains for the next couple of days as a deep low pressure system moves onshore.
Heavy rain and severe thunderstorm threat expand across the Deep South for the next couple of days as rain/snow moves across the northern tier.
Critical Fire Weather Risk today over the Northern/Central Plains.
On the demand side, weekly export sales data indicated corn sales slowing another 35% to 636,900 MT.
New crop sales were tallied at 286,800 MT, better than prior week.
US old crop corn export commitments (shipped plus outstanding sales) are now at 53.654 MMT, 18% below last year at this time.
They are now 84% of the full year WASDE forecast, slightly behind the average pace of 86%.
Accumulated exports are 51% of the updated WASDE full year projection, now 2% above normal.
As for soybean report indicated a robust level of buying in the week ending 3/24, with old crop sales at 1.31 MMT.
Soybean bookings for the new crop were at 54,000 MT.
US soybean exporters have either sold or shipped 55.342 MMT of the 21/22 crop, now just 9% smaller than last year’s record buying pace.
Total export commitments are 97% of the USDA full year estimate, outpacing the 92% average for this date.
Shipments are 77% of that projection, 1% better than the average pace.
As for wheat, the weekly Export Sales report showed old crop wheat sales slowing again to 95,000 MT for the week ending 3/24.
New crop sales were slightly below the previous week, at 349,200 MT.
Old crop wheat export commitments are now 19.258 MMT.
That is just 88% of USDA’s full year forecast, lagging the average pace of 100% by now.
Shipments to date are still 21% smaller than a year ago, at 15.696 MMT.
That is 72% of the USDA projection vs the average of 78% by now.
Meantime, private exporters on Friday reported to the USDA other sales of 136,000 metric tons of corn for delivery to unknown destinations during the 2021/2022 marketing year.
On the other hand, the weekly Commitment of Traders report showed managed money spec funds were net long 354,604 contracts as of 3/29.
That was down 29,497 contracts week/week.
Commercial corn traders also lifted hedges going in, reducing their net short 42,818 contracts on a 46,254 contract lighter OI.
As for soybean, CFTC’s weekly Commitment of Traders report indicated spec traders in soybean futures and options pared 17,919 contracts from their net long in a week.
That took the net position to long 156,273 contracts.
The record large fund long is 253,889 contracts, set in 2012
Commercial soybean traders reduced their net short by 21k contracts as short hedges were lifted and longs were added.
As for meal, the weekly CoT report showed a 1,216 contract reduced net long position from the funds.
That left the group 99,948 contracts net long.
Soybean oil spec traders were 5,477 contracts less net long to 78,601 as of 3/29.
As for wheat, Friday’s CFTC Commitment of Traders report showed spec funds in CBT wheat futures and options net long 19,439 contracts as of March 29, down a net 72 contracts from the previous week.
For KC wheat, they trimmed 479 longs from their net long position in the week ending Tuesday, taking it to 45,310 contracts.
Managed money firms were reported as 217 contracts less net long in spring wheat through the week ending 3/29.
Meantime, the funds were net sellers on Friday for 4,000 lots of corn, 14,500 lots of soybeans and 3,500 lots of wheat.
From South America, weather is looking good for the Safrinha corn crop.
StoneX increased its estimate from 89.4 million tonnes (Mt) to 91.9Mt.
Thus, Brazil could produce 118.6 million tonnes of corn this year, up from its last estimate of 116.1 million.
Datagro estimates the Brazilian soy crop as 125.1 MMT, down from their prior estimate of 130.3 MMT.
USDA is at 127 MMT.
Reports of light overnight frost in and around Buenos Aires are being monitored concerning the later planted crop in Argentina.
Currently BAGE has soy output estimated at 42 MMT.
In Europe, markets ended the week on a negative note.
Grain crops in France, remained mostly in good shape, farm office FranceAgriMer said on Friday.
For soft wheat, 92% of crops were rated good or excellent in the week to March 28, stable compared with the previous week and the highest score for the period in at least five years.
Winter barley and durum wheat, sown in autumn like soft wheat, also remained at a five-year high for crop ratings, with good/excellent scores of 88% and 87% respectively, it said.
In a first rating for recently sown spring barley, the office estimated 92% of crops were in good or excellent condition.
However, attention has turned to a cold spell which brougth widespread frosts, though temperature forecasts and the development stage of plants suggested limited risks for cereals, crop institute Arvalis said.
Grain markets in Europe are also monitoring upcoming spring planting to see if farmers’ plans would be altered by tensions in fertiliser supply and calls to raise production to compensate for war-hit exports from Ukraine.
Sunflower seed could attract extra plantings as it uses less fertiliser than corn.
Thus, France’s sunflower seed area may reach 750,000-780,000 hectares this spring, compared with about 700,000 initially expected, Afsaneh Lellahi of oilseed crop institute Terres Inovia said.
However, according to Claude Tabel, head of seed industry group UFS, a big shift in planting trends was not expected as French farmers generally follow rotation patterns, while the EU’s decision to allow fallow land to be cultivated this year came late for growers to change plans.
Meantime, consultancy Strategie Grains’ latest monthly estimates for oilseed crops in the European Union’s 27 member countries have seen, rapeseed production for 2022-23 season at 18.20 MMT, sligtly down from previus forecast of 18.21 MMT, but still up 7.1% from 16.99 MMT realized in 2021-22 season.
For sunseed, they had 10.2 MMT, up from previus 9.82 MMT estimates, but still down 1.6% from 10.37 MMt of 2021-22 season.
As for soybean they had 2.9 MMT in 2022-23 season unchanged from previus estimates and up 8.4% from 2.7 MMT in 2021-22 season.
From Africa, Kenya has spent 5.73 billion shillings ($50 million) to buy 114,000 tonnes of fertilisers that it will sell at subsidised prices to cushion farmers against rising costs due to higher prices in world markets, its agriculture minister said.
Ministry said that, for instance, one type of fertiliser – diammonium phosphate – costs 6,000 shillings per 50 kg bag from 3,200 shillings a year ago and this is expected to rise further.
With the government’s subsidy, a bag of the fertiliser will now cost 2,800 shillings.
“The fertilisers will be available at NCPB (National Cereals and Produce Board).
The fertilisers would help farmers cultivate 1.13 million acres of land.
($1 = 114.9500 Kenyan shillings).
From the Black Sea basin, the Russian Ag. Min has amended the export tax for wheat, barley and corn for the week of April 6-12, 2022.
Particularly, the export duty will be $96.1 on wheat, $75.4 on barley and $65.8 on corn.
Indicative prices will be $337.3 for wheat, $292.8 for barley and $279 for corn.
That is compared, with prior week (March 30 – April 5) when the tax was $87 for wheat, $75.6 for barley and $58.3 for corn, while indicative price were $324.3 for wheat, $293.1 for barley and $268.3 for corn.
Meantime, the rouble strengthened in Moscow trade during past week, heading back towards a near four-week high against the dollar.
Russian President Vladimir Putin said on Thursday that he had signed a decree saying foreign buyers must pay in roubles for Russian gas from April 1, and contracts would be halted if these payments were not made.
“In order to purchase Russian natural gas, they must open rouble accounts in Russian banks.”
It is from these accounts that payments will be made” Putin said.
Russia has ban exports of sunflower seeds from last Friday until the end of August and impose an export quota on sunflower oil to avoid shortages and ease pressure on domestic prices.
Particularly, seed exports has banned from April 1 to Aug. 31 and an export quota of 1.5 million tonnes will be imposed on sunflower oil from April 15 to Aug. 31, the ministry said.
There will also be a 700,000-tonne export quota for sunflower meal, it added.
Also, the government of Russia has imposed duties on export of sunflower meal and flaxseed from Russia outside the EAEU for the period from May 1 until August 31, 2022.
Flaxseed export duty is set at 20%, but not less than 100 USD/t.
The duty on export of sunflower meal will fluctuate and calculated via a certain formula as a difference between an indicative price (monthly average market price) and a base price (185 USD/t) multiplied by the value of the adjusting factor (0.7).
One more decision provides for limiting the number of checkpoints through which the export of soybean is possible.
For the period from April 1 until August 31, soybean export by road, rail and water transport is possible only through checkpoints in the Far Eastern Federal District.
For soybean meal, the export is possible via the sea checkpoint in the Kaliningrad oblast and checkpoints in the Far Eastern Federal District.
Meantime, Dmitry Medvedev warned last Friday that Russia, could limit supplies of agriculture products to “friendly” countries only.
The priority in food supply is Russia’s domestic market and price control within it, Medvedev said.
($1 = 83.9500 roubles).
Ukraine’s March grain shipments overseas included 1.1 million tonnes of corn, 309,000 tonnes of wheat, and 118,000 tonnes of sunoil, the country’s economy ministry said on Sunday.
Ukraine’s railways are struggling with a backlog of grain wagons on the country’s western border as traders look for alternative export routes.
APK-Inform said Ukrainian Railways had opened 12 terminals for traders, but wagons were backing up and the railways would need two or three weeks to process them and send to consumers.
The cost of delivering Ukrainian grain to the Romanian port of Constanta was 120-150 euros ($133-$166) per tonne.
Before the war, traders paid around $40 to transport grain to Ukraine’s Black Sea ports.
Meantime, the southern coastal city of Odesa came under attack Sunday morning, with a local official saying a Russian missile strike had hit “critical infrastructure.”
A fuel depot in the city is burning, according to a CNN team on the scene.
Meanwhile, on Friday, U.S. government images showed what a U.S. official said was damage to grain storage facilities in eastern Ukraine.
Uzbekistan plans to buy up to 600,000 tonnes of grain from Kazakhstan, to boost state stockpiles and ensure domestic food security as global food prices spike, the government said in a notice on Monday.
Particularly, Uzbekistan plans to buy 100,000 tonnes of wheat, including flour, from Kazakhstan in April-July, according to the notice in a document published on the government’s website.
The document also said that Uzbekistan would import an additional 500,000 tonnes of grains subject to the situation in the domestic and global food markets.
Meantime, Uzbekistan’s wheat crop is expected to rise by 1 million tonnes this year to 7.7 million tonnes, its agriculture ministry said in mid-March.
The country increased grain imports by 39% to 276,700 tonnes in January-March, according to the RIA news agency.
It imported 2.8 million tonnes of grain in 2021, RIA added.
From the Middle Kingdom, China will adopt strong and effective measures to ensure the stable production and supply of corn and rice, state media cited Chinese Vice Premier Hu Chunhua as saying on Friday.
Areas with declining corn planting should speed up the recovery, Hu said.
He emphasized that joint efforts should be made to ensure corn planting areas and output in the corn regions stabilise at last year’s levels.
China should strengthen regulation on the demand for the processing of corn, and strictly control the use of corn for fuel, Hu was quoted as saying.
This year’s corn production is threatened by China’s recent COVID-19 curbs that caused a supply crunch of fertilisers.
From South East Asia, India’s palm oil imports jumped 21% in March from the previous month.
In March, indeed, 550,000 tonnes of palm oil landed in India, up from 454,794 tonnes in February.
Even in April, palm oil imports will remain robust.
Indian demand contributed to the palm oil price, as indicated by the futures contract, reaching an all-time record of 7,268 ringgit per tonne on March 9, although it has since fallen to 5,741 ringgit per tonne.
Meantime, India imported 210,000 tonnes of sunflower oil in March, up from 152,220 tonnes in February.
Indian refiners have been trying to import more from Russia and Argentina, however, there are limitations.
Demand is there for 200,000 tonnes, while they cannot import more than 100,000 tonnes per month in Ukraine’s absence.
Also, India imported about 310,000 tonnes of soyoil in March, 18% less than in February, dealers said.
From Australia, the Australian and Indian governments on Saturday signed the Australia-India Economic Cooperation and Trade Agreement (AI ECTA), with lentils the only bulk commodity in the grains space to benefit.
The Australian Government said the agreement will make Australian exports to India cheaper, and eliminate tariffs on more than 85 per cent of Australian goods exported to India, rising to almost 91pc over 10 years.
“This agreement opens a big door into the world’s fastest growing major economy for Australian farmers, manufacturers, producers and so many more,” Australian Prime Minister Scott Morrison said in a statement.
However, it holds no joy for Australia’s chickpea growers, who are effectively locked out of what was their biggest market by a hefty tariff imposed to reduce price pressure on India’s domestic crop.
Meantime, a cargo of Australian canola is on its way to the United States in what is believed to be the first bulk shipment of the oilseed to North America.
The parcel of around 33,000 tonnes left the Port of Portland in Victoria on Saturday, and is sailing direct to Stockton, California.
The cheap basis and plentiful supply of Australian canola has seen it meet very strong demand in the buoyant global market for oilseeds and vegetable oil.
Meantime, last week’s wheat numbers were steady, wide bid/offer spreads remaining.
Barley markets in SA continued firm as were northern feed grains.
Canola was a mixed bag, amid thin liquidity.
Current crop values bounced around all last week and ended softer.
New crop showed some further strength.
Weather remains key for growers and execution teams.
Execution teams and traders are battling east coast weather in delays for loading vessels and domestic outturns.
Growers in South Australia are now looking for signs of a break in weather as the East Coast system continue to build and fall as La Nina strengthens.
WA growers have had nice rain, perhaps a week or two early but most certainly welcome.
On the international trade scene, Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins.
The deadline for submission of price offers in the tender is April 6.
Shipment in new tender is sought in a series of possible combinations in 60,000 tonne consignments.
Possible shipment combinations are between May 16-31, June 16-30, July 1-15 and July 16-31.
A new announcement had been expected after Jordan made no purchase in its previous tender for 120,000 tonnes of wheat on Thursday.
Watching this week’s market, export inspections data will be released this afternoon.
The first NASS Crop Progress report of 2022 will out after the session close.
Census will be out on Tuesday with official export trade data for February.
EIA will publish their weekly production and stocks report for ethanol on Wednesday.
Export Sales data will be released on Thursday morning.
Friday rounds out the week with the monthly Crop Production and WASDE reports from USDA.
