Good morning Farmer Family and good start to the week …
US farm markets were lightly mixed past Friday.
However, they have been schooling some folks during the week, of course.
As we konow, August can still be a time of very volatility and uncertainty about crop production and if you trade the news, or the weather forecasts, instead facts, you often lose!
Just to remember, “last year taught us that crops can survive (and even thrive) on minimal, just-in-time rains”.
In this context, corn price ended the end week session with a 1.33% gain, but was still down a net 0.97% for the week.
Beans also went home fractionally higher on Friday, with Sep posting a 0.14% gain; soymeal ended the day double digits weaker with 3.53% losses; soy oil, in contrast, rallied 4.08% on the day.
For the week, soybeans gave up 1.6%, however; product values fell back as well, with meal down 1.1% and soy oil down 2.3%.
The wheat complex drifted lower into the weekend, meantime.
Chicago SRW contracts, indeed, closed with 0.86% losses on Friday.
Kansas City HRW went home 1.39% lower.
Minneapolis spring wheat prices closed down by 0.87% on the day.
During the week, prices continued to go back and forth, however, the week’s balance was negative sure.
Particularly, Chicago SRW was down 4%; Kansas City HRW fell 3%; spring wheat shedded 2.2%.
On Friday U.S. soybean prices fell for a fourth session on five, pressured down by forecasts for spotty Midwest rains that could boost the health of it crop as it passes through key development periods.
Indeed, though hot, dry temperatures prevailed in many areas, conditions varied across grain-growing regions past week.
Rain in the Texas Panhandle and northern Oklahoma eased drought conditions with above-normal temperatures continuing in the region.
Colorado and western Kansas experienced heavy rain past week related to monsoon activity, making minor improvements to drought conditions.
The rest of Kansas, southeast Colorado, central and southern Nebraska, southern South Dakota, and North Dakota experienced dry weather and temperatures 2 to 4 degrees above average, worsening moisture deficits.
A heat wave developed in the Pacific Northwest, pushing temperatures well above average in Washington and Oregon.
Most of the central U.S. have seen some measurable moisture during the weekend, with large parts of Minnesota and Wisconsin that gathered another 1.5” or more.
A “significant” US rain event is expected to bring temporary relief from crop stress in the western Corn Belt later this week.
World Weather Information Service says amounts and coverage levels from this rain event will be critical for the driest areas as a period of hot and dry conditions will follow for a week to 10 days.
Conditions are expected to remain favourable for much of the eastern Corn Belt.
In this context, IHS Markit Agribusiness forecasted 2022 soybean production of 4.530 billion bushels, with an average yield of 51.8 bushels per acre.
Both the yield and production forecasts were bigger than the U.S. Agriculture Department’s July estimates.
The firm, meantime, reduced their outlook for the US national corn yield from 179.5 to 176.9 bpa.
Consequentially corn prices firmed a bit on Friday while wheat slipped, hitting a six-month low earlier past week.
Traders, continued to monitor the progress of exports from Black Sea ports.
Three ships carrying a total of 58,041 tonnes of corn have been authorised to leave Ukrainian ports last Friday, while the first Ukrainian grain vessel to leave the Black Sea, passed through the Bosporus on Aug. 3 carrying 27,000 MT of corn bound for Lebanon.
Also, the first inbound vessel has been cleared to transit after inspection and arrived in Ukraine on Saturday.
In this context, Ukraine could start exporting wheat from this year’s harvest from its sea ports in September under the landmark deal brokered by Turkey and the United Nations, Ukraine’s first deputy minister of agriculture said.
Signs of a renewed international demand past week helped to limit losses.
On this wake, on Friday we saw private exporters to report to the USDA the sale of 132,000 tonnes of soybeans to China and the sale of 132,000 tonnes of soybeans to unknown destinations.
These sales had been rumored already on Thursday morning.
The funds were net buyers on Friday for 3,000 lots of corn but net sellers for 3,500 lots of soybeans and 2,500 lots of wheat.
Meantime, corn basis bids were steady to soft after weakening 5 to 15 cents across five Midwestern locations.
Soybean basis bids were largely steady but did show some significant variability across a handful of locations, moving as much as 15 cents higher at an Illinois river terminal and as much as 20 cents lower at an Indiana elevator.
As for wheat, basis was mixed in both the Gulf and Pacific Northwest (PNW) past week.
In the Gulf, HRS basis was down while HRW was flat and SRW remains firm.
Out of the PNW, HRS was flat and HRW was up, while Soft White was down.
Demand for HRS remained sluggish as many buyers look ahead to harvest.
Slow movement of HRW from the country elevators to the export market kept Gulf HRW quiet past week.
Increased export business out of the PNW firmed basis, though a progressing Soft White harvest has placed downward pressure on prices.
The first durum fields has been harvested in Montana where the crop was 5% harvested, 95% headed and 39% turning color as of past Monday.
In North Dakota, heat has accelerated growth, but the crop was still behind average with 93% headed and 17% turned color.
USDA conditions for the Northern Durum crop remain very high with North Dakota rated 84% good to excellent.
Montana ratings increased slightly to 51%.
Hot, humid conditions have increased disease and insect pressures with producers managing.
Meantime, weekly CFTC data showed on Friday managed money spec funds were buying corn through the week that ended 8/2.
The 6.3k new longs and 2.8k fewer shorts left the spec funds 129,921 contracts net long.
Commercials were also adding 4k new hedges through the week, taking their net short to 362,067 contracts.
As for soybean, the report had the managed money group at 99,471 contracts net long as of 8/2.
That was a weekly 11,795 contract bull swing via 6k spec rotation from open shorts to new longs.
Commercial soybean traders closed 7.7k long hedges for a 149,443 contract net short.
In the products, CFTC reported the funds were 6.6k contracts more net long to 80,018 for meal and 7.2k contracts more net long to 22,141 in soy oil.
As for wheat, the report showed the managed money spec funds were getting more bearish in CBOT wheat, as they were extending their net short in SRW through the week that ended 8/2.
Particularly, managed money opened 9.2k new shorts through the week and opened 4.7k new longs, for a net 14,970 contract short position as a group.
In KC wheat, the CoT report showed managed money firms were 9,992 contracts net long, reducing the position by 1,049 contracts.
That was their smallest net long in that market since September 2020.
Spring wheat spec traders were closing more longs than shorts through the week of 8/2, and flipped net short for the first time since 10/13 of 2020.
Their net short was reported at 652 contracts.
On this morning, as of 04:26 GMT, Chicago wheat price edged higher 0.3%, recouping some of the previous session’s losses but pressure from expectations of higher sea-borne grain exports from Ukraine curbed gains.
Corn lost 0.2%, falling for the first time in four sessions.
Soybeans ticked higher 0.2%, although higher U.S. production and weakening Chinese demand limited gains.
In energy markets, oil prices settled higher last Friday, recouping some of past week’s losses on strong U.S. job growth data.
However, they closed the week at their lowest levels since February, rattled by worries a recession could hit fuel demand.
Brent crude, indeed, settled up 80 cents to $94.92 a barrel, but 11% off prior Friday’s settlement.
U.S. West Texas Intermediate crude settled up 47 cents to $89.01, but off 8% in the week.
Oil traders past week have fretted about inflation, economic growth and demand, but signs of tight supply kept a floor under prices.
Supply concerns, indeed, are expected to ratchet up closer to winter, with European Union sanctions banning seaborne imports of Russian crude and oil products set to take effect on Dec. 5.
Russian crude and oil products exports, however, continued to flow.
The OPEC+ producer group agreed past week to raise its oil output goal by 100,000 barrels per day (bpd) in September.
Meantime, the number of oil rigs, an early indicator of future output, fell seven to 598 in the week to Aug. 5, the first weekly decline in 10 weeks.
On this morning, oil prices bounced higher from multi-month lows.
Brent crude futures had risen 81 cents, or 0.9%, to $95.73 a barrel by 06:38 GMT.
U.S. West Texas Intermediate crude was at $89.76 a barrel, up 75 cents, or 0.8%.
On Sunday, China surprised markets with faster-than-expected growth in exports.
China, imported 8.79 million barrels per day (bpd) of crude in July, up from a four-year low in June, but still 9.5% less than a year earlier, customs data showed.
Chinese refiners drew down stocks amid high crude prices and weak domestic margins even as the country’s overall exports gained momentum.
Oil demand for 2022 is now estimated to rise by 1.8 million bpd year-on-year and settle at 99.7 million bpd, just short of pre-pandemic highs, analysts said.
However, the U.S. clean energy sector received a boost after the Senate on Sunday passed a sweeping $430 billion bill intended to fight climate change, among other issues.
In freight markets, the Baltic Exchange’s main sea freight index dipped to a near 6-month trough past Friday and registered its worst week in more than two months on weakness across vessel segments.
The overall index, which factors in rates for capesize, panamax, and supramax shipping vessels, indeed, was down 43 points, or 2.7%, at 1,560 points, its lowest since Feb. 8.
The main index fell 17.7% for the week, its third consecutive decline.
Particularly, the capesize index lost 69 points, or 4.7%, at 1,411 points, its lowest since April 20. It shed about 32% on the week.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down $571 to $11,700.
The panamax index was down 16 points, or 0.81%, at 1,967 points, its lowest since July 19. It lost 4.1% in the week.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $150 to $17,699.
The supramax index fell 47 points to 1,700 points, its lowest since Feb. 7. It shed 13.7% in its worst weekly decline since Nov. 5.
In equity markets, U.S. stock indexes past Friday settled mixed.
They were under pressure as U.S. July nonfarm payrolls rose +528,000, stronger than expectations of +250,000 and the biggest increase in 5 months.
The July unemployment rate fell -0.1 to 3.5%, matching a five-decade low and showing a stronger labor market than expectations of no change at 3.6%.
U.S. July average hourly earnings rose +0.5% m/m and +5.2% y/y, stronger than expectations of +0.3% m/m and +4.9% y/y.
U.S. June consumer credit rose +$40.154 billion, stronger than expectations of +$27.000 billion.
That, on the one hand, bolstered the outlook for the Fed to raise interest rates by another +75 bp at the September FOMC meeting, but pushed up the T-note yields.
Particularly, the two-year Treasury yield, which tends to track expectations for Fed action, jumped to 3.23% from 3.05% late Thursday. The 10-year yield, which influences rates on mortgages, rose to 2.84% from 2.69%.
In the meantime, Friday’s economic data, also eased recession fears and sparked a rally in bank stocks, supporting the overall market and kept the Dow Jones Industrials in positive territory.
Also, solar stocks jumped Friday after Barclays upgraded the sector, saying the sector “is as attractive as it’s ever been.”
Strength in energy stocks past Friday was a bullish factor for the overall market as crude prices rose more than +0.5%.
Tensions with China on Taiwan, in contrast, weighed on U.S. stocks.
In this context, the end week session, was a roller-coaster day as the benchmark S&P 500 ultimately ended just 0.2% lower, slipping 6.75 points and closing at 4,145.19 after recovered from the early slide.
Stocks of technology and other high-growth companies once again took the brunt of the selling amid the rising-rate worries.
Consequentially, the tech-heavy Nasdaq composite cut its early losses but still closed down 63.03 points, or 0.5%, at 12,657.55.
The Dow Jones Industrial Average, whose stocks tend to move more with expectations for the overall economy, added 76.65 points, or 0.2%, to close at 32,803.47.
Smaller company stocks also weathered the turbulent trading to notch gains.
The Russell 2000 index, indeed, rose 15.37 points, or 0.8%, to close at 1,921.82.
For the week, the S&P 500 rose 0.4%, the Dow fell 0.1% and the Nasdaq added 2.2%.
On this morning, Asian stocks were mixed after strong U.S. jobs data cleared the way for more interest rate hikes and Chinese exports rose by double digits.
Shanghai and Tokyo advanced while Hong Kong and Seoul retreated.
Particularly, the Shanghai Composite Index rose 0.2% to 3,233.07 after China’s July exports beat forecasts.
The Hang Seng in Hong Kong fell 0.8% to 20,040.21 while the Nikkei 225 in Tokyo gained 0.2% to 26.230.90.
The Kospi in Seoul gained less than 0.1% to 2,491.91 and Sydney’s S&P-ASX 200 shed less than 0.1% to 7,009.80.
India’s Sensex opened up 0.4% at 58,613.39. New Zealand and Southeast Asian markets retreated.
In currency trading, the dollar rallied across the board past Friday, notching its biggest daily percentage gain since mid-June against the yen.
The U.S. dollar index , which measures the greenback against a basket of currencies, indeed, sharply extended gains following the U.S. July nonfarm payrolls report, posting the largest gain since February.
Particularly, the dollar index, which remains below its mid-July high nevertheless, was last up 0.8% at 106.57.
It was up about 0.2% just before the release of the U.S. Labor Department’s employment report.
The index was up about 0.6% for the week.
The dollar was stronger against almost everything.
Against the yen, the dollar was last up 1.5% at 134.99 yen.
For the week, the dollar was up 1.3% against the yen.
Sterling was down 0.8% against the dollar at $1.2066, a day after the Bank of England (BoE) raised rates by the most in 27 years.
The euro was down 0.7% against the greenback at $1.0178.
The dollar index is up more than 11% for the year so far amid the outlook for higher rates.
In Canada, harvest has begun in the province of Saskatchewan past week.
These few fields are mainly in west central and southwest regions where crops are further ahead in development.
Parts of these regions received rainfall and this has delayed further harvest activities such as combining and desiccating.
In the eastern regions harvest was seven-10 days away, since crops were behind in development and in some areas were just beginning to fill with seed, although some earlier seeded crops were close to being ready for desiccation.
Cropland topsoil moisture was rated as four per cent surplus, 64 per cent adequate, 25 per cent short and seven per cent very short.
Hay and pasture land topsoil moisture was rated as two per cent surplus, 65 per cent adequate, 20 per cent short and 13 per cent very short.
Pasture conditions were rated as 16 per cent excellent, 41 per cent good, 25 per cent fair, 12 per cent poor and 6 per cent very poor.
The Manitoba Agri-Food and Rural Development division crop report from w/e 2 August said 2022/23 spring wheat fields have completed flowering and kernel development was underway.
The majority of the later seeded wheat has finished flowering.
The spring wheat crop was rated mostly (around 55%) from good to excellent, with some exceptions due to extreme moisture.
Fusarium head blight fungicide application in spring wheat was complete.
Armyworm damage on cereals has been discovered in the Beausejour area, control was underway as needed on specific fields where careful scouting was required.
Higher wheat midge counts were observed in the Roblin areas.
Barley crops rangeed from flowering to head filling (milky dough) stages, with malt crops most advanced, and greenfeed or very late-seeded fields further behind.
Oat crops have finished flowering and are becoming heavier with grain fill developing.
Fall rye was turning colour and was at the hard dough stage, leaves have dropped off and stems was browning.
Winter wheat has mostly reached the hard dough stage, the crop is starting to turn colour.
Pre-harvest aid application could started past week in the Eastern region.
Canola crop conditions were variable, broadly estimated at 75pc good-to-excellent.
From South America, Argentina’s BAGE reported corn harvest reached 81.4% complete as of 8/4.
Argentina’s 2022/2023 wheat crop got a much needed boost when rains eased drought conditions afflicting key agricultural areas, the Buenos Aires Exchange said past Thursday.
Persistently dry conditions in recent months have pushed the exchange to cut its estimate for the country’s planted wheat area five times, down to 6.1 million hectares (15 million acres) from the 6.6 million hectares initially expected in May.
Rains over Argentina’s central and southern agricultural areas slowed the deterioration of wheat plants that have already begun growing, while promoting the growth of plants “that presented delays due to the lack of humidity and low temperatures,” the exchange said in its weekly report.
The exchange, however, warned that the panorama for farmers was still a concerning one.
In Europe, August loadings in France were seen exceeding an exceptionally busy July programme of around 1 million tonnes.
In Germany, August loadings were starting with a vessel past week taking 30,000 tonnes of wheat for Guinea and another this week is set to load about 60,000 tonnes for an undisclosed destination.
Sellers of standard 12% protein wheat for September delivery in Hamburg were offering around 33 euros a tonne over the Euronext December, with buyers seeking about 30 euros over.
Falling Rhine water levels in hot, dry weather has increased costs for grain transport.
Prices for river shipping have more than tripled since June.
In France, the farm ministry raised by 1 million tonnes its estimate of the soft wheat harvest to 33.9 million tonnes, although this was still below last year’s crop.
Durum wheat production was estimated at 1.36 million tonnes against 1.58 in 2021.
Barley production was estimated at 11.4 million, on the same level as last year.
The new figures, however, were broadly in line with market expectations after strong yields in northern zones offset drought-hit results in the south.
Also, France’s Ag Ministry estimated the corn crop at 12.66 MMT, down 19% from last year’s crop citing dryness.
FranceAgriMer reported 63% of the crop was good/very good.
From North Africa, Morocco’s 2022 drought-hit cereals harvest was down 67% from last year at 3.4 million tonnes, including 1.89 million tonnes of soft wheat, the agriculture ministry said on Monday.
The durum harvest stood at 0.81 million tonnes and barley at 0.7 million tonnes.
From the Black Sea basin, Russian President Vladimir Putin and Turkish President Tayyip Erdogan agreed past Friday to boost cooperation in the transport, agriculture, finance and construction industries, they said in a joint statement after a four-hour meeting.
In the statement, Putin and Erdogan stressed the need for “the full implementation of the Istanbul agreement, including the unimpeded export of Russia’s grain, fertiliser and raw materials for their production.”
The Kremlin said on Thursday the deal to unblock Ukraine’s grain exports from the Black Sea was not a “one-time mechanism,” and that it hoped it would continue to work effectively.
The two leaders also agreed to switch part of the payments for Russian gas to roubles, Russian Deputy Prime Minister Alexander Novak told reporters after the talks.
Meantime, three ships loaded with grain left Ukrainian ports on Friday under the safe passage deal.
Particularly, two grain ships set off from Chornomorsk and one from Odesa, with a total of about 58,000 tonnes of corn.
The Panama-flagged Navistar, carrying 33,000 tonnes of corn bound for Ireland, departed from Odesa.
The Maltese-flagged Rojen, carrying 13,000 tonnes of corn, departed from Chornomorsk port bound for Britain.
The Turkish-flagged ship Polarnet, carrying 12,000 tonnes of corn, shipped from Chornomorsk for the Turkish port of Dernice, on this morning completed its rout to be unloaded.
Meantime, the Turkish bulk carrier Osprey S, flying the flag of Liberia, arrived in Ukraine’s Chornomorsk port.
It has been the first ship to arrive at a Ukrainian port during the war.
A second ship travelling to Ukraine, the Osprey S, was inspected in Istanbul on Sunday and was nearing Ukraine on Monday morning.
Four more ships carrying almost 170,000 tonnes of corn and other foodstuffs sailed on Sunday.
Ukraine would soon also start exporting grain from its Black Sea port of Pivdennyi, an expansion that would let it send out a total of at least 3 million tonnes of goods a month.
The ships that left Ukrainian ports included Glory, with a cargo of 66,000 tonnes of corn bound for Istanbul, and Riva Wind, loaded with 44,000 tonnes of corn, heading for Turkey’s Iskenderun.
The other two vessels that left Ukraine were Star Helena, with a cargo of 45,000 tonnes of meal heading to China, and Mustafa Necati, carrying 6,000 tonnes of sunflower oil and heading for Italy.
Two more ships, carrying corn and soybeans, departed on this morning, taking the total to ten since the first ship sailed last week.
Particularly, the Sacura, which departed from Pivdennyi, is carrying 11,000 tonnes of soybeans to Italy, while the Arizona, which left Chornomorsk, is carrying 48,458 tonnes of corn to Iskenderun in southern Turkey.
So far, around 243,000 tonnes of corn has been exported from Ukraine on seven ships since the first departure on Aug. 1.
Meantime, Ukraine has called for the grain deal to be extended to include other products, such as metals.
Ukrainian farmers have threshed 17.5 million tonnes of the 2022 grain harvest so far with the average yield of 3.64 tonnes per hectare, Ukrainian grain traders union UGA said on Friday.
The union’s statement said the volume included 12.6 million tonnes of wheat with an average yield of 3.6 tonnes per hectare and 4.4 million tonnes of barley with a yield of 3.38 tonnes per hectare.
The UGA said that farmers also harvested 2.5 million tonnes of rapeseed with a yield of 2.68 tonnes per hectare.
The ministry said farmers had harvested 4.8 million hectares of grain and the area included 3.5 million hectares of wheat, 1.3 million hectares of barley and 101,000 hectares of peas.
It also said Ukraine’s southern Odesa and Mykolaiv regions had almost completed the 2022 wheat harvest.
Thus, if the corridor seems respected for the moment, the logistical challenge remains immense to empty the port silos of the 2021 harvest, with the 2022 harvest which is in progress.
From Russia, the Ag Ministry reported 51 MMT of grain was reaped through 8/2.
Cereals and leguminous crop harvested from 11.9 MHA area, including 43.9 MMT of wheat harvested from 9.9 MHA.
However, rains in several regions of Russia have hit the quality of winter wheat, typically accounts for 70% of Russia’s crop, although improved the set-up for spring wheat.
More rains arrived during the past week, consequentily, Russia will downgrade its forecast for grain exports in the 2022/23 July-June season from the current 50 million tonnes if its harvest fails to reach the target of 130 million tonnes, the agriculture ministry said on Friday.
The pace of crop harvesting in Russia, is currently slower than the ministry expected due to a cold spring leading to a late start, as well as rain and a lack of spare parts for foreign agricultural equipment, it said.
Meantime, suppliers offered Russian wheat at lower prices past week in Asia.
Russian wheat with 11.5% protein was offered around $405-$410 a tonne, including cost and freight (C&F), to Southeast Asia.
However, most millers were unwilling to sign deals in the face of economic sanctions against Moscow.
Buyers, indeed, are not willing to take chances with Russian supplies as cargoes might get into trouble, even though food is not under sanctions.
On domestic side, consumer prices declined for the fourth week running, data showed past Wednesday, as the rouble’s appreciation in the past few months and a drop in consumer demand weighed on the pace of price growth.
The consumer prices index (CPI), indeed, dipped 0.14% in the week to Aug. 1 after easing 0.08% a week earlier, the federal statistics service Rosstat said.
The CPI extended its fall even after the central bank slashed its key rate by 150 basis points to 8% last month and indicated it was ready to consider further monetary easing to limit the depth of economic recession.
In a separate set of data, the economy ministry said annual consumer inflation remained steady at 15.30% as of Aug. 1, the same level seen a week earlier.
Inflation remains high but is slowing after prices of nearly everything, from vegetables and sugar to clothes and smartphones, have jumped sharply since started war.
So far this year, consumer prices have risen 11.16% compared with a 4.69% increase in the same period of 2021, Rosstat data showed.
Meantime, last Friday Russia has set out its grain export taxes for Aug 10 – 16.
According to the agriculture ministry the export duty will increase for all products wheat, barley and corn.
Particularly, for wheat the duty will move to 5,219.6 roubles/tonne, from 4,626.8 roubles/tonne of a week earlier.
For barley, will be 3,504.9 roubles/tonne, from 2,945.4 roubles/tonne the prior week.
For corn, the tax will move up to 3,802.8 roubles/tonne, from 3,311.4 roubles/tonne the previus period.
As for indicative price, for wheat it will be 369.4 $/tonne, for barley 310.6 $/tonne, and for corn 317.6 $/tonne.
That is compared with 379.9 $/tonne for wheat, 311.2 $/tonne for barley, and 320.2 $/tonne for corn of a week earlier.
From the Middle Kingdom, China is on track to be the leading international buyer of U.S. agricultural products for a third consecutive year.
The total value of US exported goods, indeed, reached record levels in the first half of 2022.
Data published by the U.S. Census Bureau past Thursday, showed U.S. agricultural and related product exports to China reached $17.5 billion between January and June, up 15% from last year’s record for the period.
Soybeans accounted for 29% of this year’s value of exports to China, corn 18%, cotton 11% and sorghum 9%.
The exported cost of U.S. corn to China in H1 2022 was 21% higher than in H1 last year, soybeans 23% higher and cotton 34% higher.
However, the 9.7 million tonnes of U.S. corn shipped to China in H1 2022 is down 24% from last year, though it would have been by far a full-year record in any other year.
US soy exports in H1 at 8.8 million tonnes were up 15% on the year and cotton shipments of 800,000 tonnes were up a whopping 71%.
However, for the current 2021-22 marketing year that began Sept. 1, through June, corn and soybean shipments to China from USA were down 33% and 20%, respectively.
Cotton shipments were down 10% between August 2021 and June 2022.
More generally, China’s soybean imports in July fell 9.1% from a year earlier, customs data showed on Sunday, as poor crushing margins and weaker consumption reduced appetite for shipments.
Particularly, China brought in total 7.88 million tonnes of the oilseed in July, versus 8.67 million tonnes a year earlier, data from the General Administration of Customs showed on Sunday.
Meantime, China will again auction off another 500.000t of its state soybean reserves on August 12.
The country has routinely offered similarly sized auctions throughout 2022 in an attempt to boost local supplies and quell high prices.
A more maked down trend, was seen for U.S. pork shipments to China that in H1 2022 plunged 53% on the year to 460,300 tonnes.
By contrast, China increased U.S. beef import, as H1 2022 exports by volume surged 49% from H1 2021. U.S. beef and beef product exports to China in H1 of 120,500 tonnes, amassing over $1 billion in value, the fifth largest item of the year behind soybeans, corn, cotton and sorghum.
That makes China the third largest destination for U.S. beef so far in 2022 behind Japan and South Korea.
China in total, imported 643,000 tonnes of meat in July, General Administration of Customs data on Sunday showed.
July’s meat imports were down 24.7% from the same month a year earlier, but up 6.6% from June 2022.
Meat imports for January to July were 4.10 million tonnes, down 30.9% from a year ago, according to China customs.
In a more general context, China total exports in July surged 18% compared with a year earlier while imports rose just 2.3%, Chinese customs data showed Sunday.
In this context, the country’s global trade surplus swelled to a record $101 billion.
Meantime, China has waived requirements and will be able to import Brazilian corn in 2022.
China could purchase between 1 million-1.5 million mt in 2022 to replace a possible reduction in Ukrainian exports, according to market participants.
From South East Asia, flour millers in India have asked the government to scrap a 40pc import duty on wheat to soften local prices that have jumped 12-16pc in the past fortnight.
Domestic wheat prices ended last week at a record 24,000 rupees ($301.57) per tonne.
Domestic prices, however, are still nearly a third lower than global prices and the government has limited options to intervene in the market this year since its procurement has fallen 57% to 18.8 million tonnes.
The new crop would become available only after 9 months.
Malaysian palm oil prices jumped more than 2% past Friday tracking Chicago soyoil, but the contract logged its first weekly loss in three on expectations of rising supplies.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange, indeed, gained 79 ringgit, or 2.07%, to 3,900 ringgit ($875.62) a tonne.
However, for the week, the contract fell 9.6%.
Malaysia’s palm oil inventories at end-July likely jumped to an eight-month high due to improving production and soaring imports.
But production worries due to workers shortages are raising concerns about the quality of the processed crude palm oil and yields are on the decline.
Exports from Malaysia during Aug. 1-5 rose 24.5% from the same week in July.
Traders are expecting higher overseas shipments from Indonesia after the country lowered its crude palm oil export duty reference price for Aug. 1-15, making its products more competitive than Malaysian palm oil.
($1 = 4.4540 ringgit)
From Australia, the country exported 2,797,599 tonnes of wheat in June, up 18 per cent from the May figure of 2,363,470t, according to the latest export data from the Australian Bureau of Statistics (ABS).
This lifts Australia’s total wheat and durum exports for its marketing year starting October 1 to 20.8 million tonnes (Mt).
Containerised exports for June totaled 229,137t, with Indonesia on 66,338t followed by Vietnam on 48,929t and Taiwan on 33,508t the biggest markets.
China was once again the biggest customer by far on bulk exports, and with 707,409t shipped in June, it has accounted for 4.8Mt of wheat in the marketing year to June 30, or 23pc of the total figure to all destinations.
Indonesia on 251,892t was the second-biggest bulk customer, and was the destination for 2.4Mt of wheat in Oct-Jun period.
The third-biggest bulk wheat customer in June was The Philippines on 186,672t, and it was the destination for 1.8Mt shipped Oct-June, followed by Vietnam on 174,932t for June and 1.5Mt for the reporting period.
Meantime, local markets ended last week with low liquidity bids for old crop pulling away.
New crop wheat markets ended unchanged.
Barley new crop eased $10-20/t last week.
Canola prices saw significant moves in both directions reflecting moves in international markets.
On the weather side, rainfall totals for the week ending 7 August were high across southern WA with 10-50mm received and higher falls recorded closer to the coast.
SA and Vic picked up 15-50mm with higher totals of up to 100mm in south east Vic.
NSW picked up between 100mm and 150mm in parts of the south east and north east and 15-50mm in most other cropping regions.
Qld picked up 15-50mm in the south west and CQ.
Lower totals below 10mm were recorded for most other areas.
On the international trade scene, the Philippines is believed to have rejected all offers and made no purchase in a tender to purchase for up to 150,000 tonnes of wheat and 150,000 tonnes of animal feed barley, with prices regarded as too high.
The country may wait to see if an uptick in Ukrainian exports will help prices fall.
The tender had sought shipments of various sizes each month in October, November and December 2022 and in January 2023.
Pakistan on Friday rejected Russia’s offer to supply 120,000 metric tons of wheat at a price of $399.50, demanding further reduction of 2.4% in the rate due to the falling global commodity prices.
The decision was taken by the Economic Coordination Committee (ECC) of the Cabinet after consulting with Prime Minister Shehbaz Sharif.
Pakistan had decided to import three million metric tons of wheat this year to meet its consumption and strategic reserves requirements.
The government has already procured 986,000 metric tons of wheat through three different international competitive bidding deals.
A week earlier, Pakistan had finalised the 200,000 metric tons of wheat import deal at $407.49 per metric ton.
According to the food and national security ministry, Pakistan has around 7.7 million metric tons of wheat that is sufficient for 168 days’ of consumption.
Watching this week’s market, we’ll get the weekly Export Inspections report today in the afternoon and Crop Progress overnight after the session close.
The weekly EIA ethanol numbers will be out on Wednesday.
Thursday is the weekly Export Sales report day in the US.
Friday marks the last trading day for August soybeans, meal and bean oil.
Not to be overlooked will be the first NASS Crop Production estimates for corn and soybeans, along with the monthly WASDE supply/demand updates.
That’s all, thank you.
To all of you, we wish you a good day and … Good Harvest 2022!
Author: Sandro F. Puglisi
