Consuales Ludi …
Good morning Farmer Family, and wellcome back …!
“The Consualia or Consuales Ludi was the name of two ancient Roman festivals in honor of Consus, a tutelary deity of the harvest and stored grain.
Consuales Ludi harvest festivals were held on August 21, and again on December 15, in connection with grain storage.
The shrine of Consus was underground, it was covered with earth all year and was only uncovered for this one day.
Mars, the god of war, as a protector of the harvest, was also honored on this day, as were the Lares, the household gods that individual families held sacred.
During the celebration horses, mules, and asses were exempted from all labour, and were led through the streets adorned with garlands and flowers.
Chariot races were held this day in the Circus Maximus, which included an odd race in which chariots were pulled by mules.
In Roman mythology, however, the Consualia was founded by Romulus as an occasion to gather his Sabine neighbors.
When the community was assembled in a state of drunken festivity, Romulus’s men abducted the daughters of the Sabines to become their brides (“The Rape of the Sabine Women”)!
The rapt was explained by Plutarch not so much as a gesture of pride, but rather as an act of necessity, in order to mix the two peoples.
The rapt took place on 21 August on the day in which the Consualia feasts were celebrated.”
Like in Roman mythology, many operators were being assembled in a state of drunken festivity last week, while a lot of commodities and other assets were being sold off.
Meantime on US farm markets, grain prices fell low enough to attract new bargain buyers on Friday.
The result was dramatic as most wheat contracts climbed 3% to 4% higher.
Particularly, Kansas City HRW wheat, led the charge as was 3.97% higher.
Chicago SRW was up 2.97%.
Minneapolis spring wheat was 2.58% strongher.
Corn prices were also firm, trending more than 1% higher by the close.
The soybean complex finished with narrowly mixed results.
Soybean prices firmed up after trading mostly weaker on Friday, however, settled 0.45% down for the session.
Soymeal closed 0.16% weaker.
Bean oil prices bounced with triple digit Friday gains, as they were 2.48% higher by the close.
However, all ag commodities were unable to recover from the losses suffered during the week.
Particularly, corn prices retreated by 2.16% for the full week.
Soybeans headed 3.02% lower along week, with September prices back below $15.
Product values were also weaker, with meal 3.44% lower and soy oil down 2.34% for the week.
The wheat complex was a weak spot for the grains this week, with all three exchanges seeing the active front months down more than 40 cents.
Particularly, Chicago SRW led the way, down 6.55%.
Kansas City HRW was 5% lower on the week.
Minneapolis spring wheat saw a drop of 4.87% from the previous week.
Going inside the numbers, during the week, corn prices, closed down $0.138 at $6.26/bu.
Soybean prices finished the week $0.463 weaker at 14.89/bu.
Soymeal tumbled $16/smt, closing at $448.70 smt.
Soy oil, fell $1.63, to close at $67.90.
CBOT soft red winter (SRW) prices shedded $0.528 to close at $7.53/bu.
KCBT hard red winter (HRW) prices was $0.445 weaker, ending at $8.45/bu.
MGE hard red spring (HRS) prices lost $0.448 to close at $8.75/bu.
Meantime, corn basis bids improved 5 cents at an Ohio elevator and firmed 1 to 3 cents at two interior river terminals while holding steady elsewhere across the central U.S. on Friday.
Soybean basis bids were mostly steady across the central U.S. but did slide a penny lower at an Ohio elevator.
Farmer sales have been generally sluggish past week.
As for wheat, basis was up in both the Gulf and Pacific Northwest (PNW).
In the Gulf, HRS, HRW, and SRW basis for nearby delivery was up slightly.
SRW basis after September softens as demand eases and competition with other origins increases.
In the PNW basis followed the same pattern.
Soft white prices made a larger shift lower as improved weather this year has boosted the crop.
Some wheat traders noted that farmer selling is slow as harvest advances.
Farmers are eager to evaluate their crop quality while also keeping an eye on wheat futures.
However, one grain trader observed demand as “inelastic.”
One example is the reentry of Ukraine into the export market, which has pushed future prices lower in August.
Past Monday Crop Progress report from NASS showed 62% of the corn crop in the dough stage as of 8/14, 3% slower than the 5-year average pace.
The crop was also shown at 16% dented compared to 20% on average.
Crop conditions slipped 1% for the week, with gd/ex ratings to 57%.
NASS reported 74% of the soybean crop was setting pods, 3% point behind the average.
The crop conditions dropped by 1% with 58% in gd/ex category.
The spring-wheat harvest rolled on as 16% was in the bin at the start of the week.
Still, that’s less than half the 35% that normally is in the bin at this point.
This week’s USDA Crop Progress report indicated that about 5% of the North Dakota spring wheat had been harvested.
The crop that has been harvested was planted early, before the rains and snow delayed planting, and likely has some of the higher yield potential.
Reported yields have been good.
Protein levels so far have been at least 14% and test weights have been strong.
Harvest has progressed more rapidly in other spring wheat states. The South Dakota crop was now about 72% harvested.
In Montana, just over a fourth of the spring wheat has been harvested and about 12% has been harvested in Minnesota.
Durum harvest is also underway.
The North Dakota Crop Progress report indicated that about 10% of the state’s durum has been harvested, primarily in the southwest portion of the state.
Of the remaining crop, 47% was mature and 70% was starting to turn color.
Crop condition ratings dropped slightly past week with 74% of the durum rated in good to excellent condition.
Durum harvest was slightly more advanced in Montana at 19% complete, slightly behind the average of 26%.
Winter wheat in the U.S. was 90% harvested, down from the prior five-year average of 94%.
Meantime, past week, large areas of Colorado and Wyoming benefitted by scattered rainfall, which reached also western Nebraska.
Central Texas stretching northward to Oklahoma, also received some rainfall.
Kansas and both North and South Dakota experienced light rainfall, but rainfall has been just 25% or less of normal amounts for those states.
Abnormal dryness and moderate drought expanded in central Montana, exacerbated by above-normal temperatures.
Further west, parts of Washington and Idaho also saw a slow intensification of dry conditions.
The Thursday Export Sales report indicated old crop corn sales at 99,300 MT for the week of 8/11.
New corn crop sales were a 16-week high, with 750,000 MT.
US old crop corn export commitments (shipped plus outstanding sales) are now at 60.950 MMT, matching the USDA projection, vs. the 103% average pace.
That is still 13 below last year at this time.
Shipments are 92.5% of the forecast vs. the 96% average pace.
As for soybean, the report indicated actual net sales old crop soybeans of 96,600 MT.
New crop export sales the third largest weekly total this MY at 1.3 MMT.
Old crop export commitments are 101% of the full year forecast (typically 104% on this date).
Accumulated shipments YTD are 94% of the WASDE forecast, with the average at 95% for this date.
As for wheat, the report showed all wheat sales at a MY low for the new marketing year at just 207,200 MT for the week that ended on August 11.
Sales commitments YTD are 8.883 MMT, now 3% below last year.
That is also 40% of the new USDA forecast, behind the average pace of 43% for this date.
Meantime, Friday’s CFTC Commitment of Traders report indicated managed money spec funds adding in corn 11,778 contracts to their net long position during the week that ended August 16.
That put them net long 153,840 contracts by Tuesday – a 6 week high.
Commercial corn traders reduced long hedges and added new shorts for a 9,978 contract larger net short of 383,520 contracts.
As for soybean, the report had spec funds 99.336 contracts net long in soybeans as of August 16.
That was down 2,173 contracts from the previous week.
Commercial bean hedgers added 13k new long hedges taking their net short down to 137,396 contracts.
Spec traders added more meal longs than shorts for a net 1,882 contract stronger net long of 86,264 contracts as of 8/16.
In soy oil, the funds were 11,025 contracts more net long wk/wk to 33,235 contracts via rotation from short to long.
As for wheat, the report showed money managers in CBT wheat futures and options trimming their net short position by 2,241 contracts as of 8/16 to 18,107 contracts.
In KC wheat they sliced 503 contracts from their net long position to 7,520 contracts by Tuesday.
Spring wheat spec traders were less net short by 258 contracts to 757 by covering a few shorts through the week.
In this context, as of Aug 18, 2022, FOB prices saw US wheat No 2 Hard Red Winter (HRW) valued at $363/mt (down $24/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was at $318/mt (down $26/mt from last week).
Northern Durum offers from the Great Lakes for September 2022 delivery was quoted at $14.15/bu, unchanged week on week ($520.00/MT).
As for corn, US corn 3YC (Gulf) was at $298/mt (down $7/mt from last week).
As for soybean, US soybean 2Y (Gulf) quoted at $617/mt (down $10/mt from last week).
The weekly Ag Energy Roundup report from USDA had the week’s average corn oil price from unchanged to 5c/lb higher wk/wk as was 68.05 to 77.9 cents regionally.
Ethanol cash price averaged from 2.34 to 2.60 $/gal, up compared last week, when were between 2.27 and 2.48 $/gal.
The B100 cash price for the week was down 4 cents/gal in MN to $6.56 and unq in IL/IN/OH.
DDGS at the plant ranged from $190 to $265/ton regionally for the week that ended 8/19.
In energy markets, oil prices steadied last Friday, but fell for the week on a stronger U.S. dollar and fears that an economic slowdown would weaken crude demand.
Thus, Brent crude futures settled at $96.72 a barrel, gaining 13 cents in the end week session.
U.S. West Texas Intermediate crude ended 27 cents higher at $90.77.
Both benchmarks fell about 1.5% on the week.
Oil jumped on Friday after comments by Federal Reserve officials of which “the drive to raise rates needs to be balanced with the impact rate hikes have on the economy”.
Data early past week showed U.S. crude inventories fell sharply as the country exported a record 5 million barrels of oil per day during prior week, with oil companies finding demand from European nations looking to replace Russian crude.
European buyers, indeed, started to seek alternative supplies to replace Russian oil ahead of European Union sanctions that take effect from Dec. 5.
The EU will need to replace 1.2 million barrels per day.
However, the number of U.S. oil rigs, an early indicator of future supply, was unchanged at 601 past week.
Also, strength in the U.S. dollar, which hit a five-week high, capped gains.
Meantime, the new secretary general of OPEC, is optimistic about oil demand into 2023 and said, “OPEC is keen to ensure Russia remains part of the OPEC+ group”.
According to the U.S. Commodity Futures Trading Commission, money managers, cut their net long U.S. crude futures and options positions in New York and London by 18,389 contracts to 154,824 in the week to Aug. 16.
In freight markets, the Baltic Dry index, which measures the cost of shipping goods worldwide fell 3.1% to 1,279 points on Friday, the lowest since December of 2020 and extending losses for the second straight session.
On the week, the Baltic Dry index lost 13.4%, its fifth consecutive decline, pressured by weak demand across the larger vessel segments.
Particularly, the capesize index, which tracks iron ore and coal cargos of 150,000 tonnes, slumped by 12.8% to 756 points on Friday.
The market continued to soften this week leaving little ambiguity about the state of the market as the 5TC posted at a low of $6,267 on Friday.
While the Pacific rates have already been bottoming out in recent times, the Atlantic trade routes were the movers this week shedding value as hopes of a trend-bucking rally diminish.
The Transatlantic lost -7833 week on week to settle at $7917.
With minimal cargo out of Eastern Canada and the US, fronthaul valuations are now increasingly linking North Atlantic vessels to Brazil cargoes pushing the Fronthaul C9 route down to $24,563.
As iron ore prices and demand from China continue to struggle the talk of a stimulus package raises hopes, yet has little substance at this stage.
As Capesize tonnage levels build in the Pacific, for the more constant stream of Australian iron ore cargoes the outlook for the remainder of Q3 looks dismal.
The panamax index, which tracks about 60,000 to 70,000 tonnes of coal and grains cargoes, was down for the 19th straight session on Friday, falling 3.5% to 1,688 points.
We witnessed a very quiet start to the week – and it never really got going – with weakness shown across the board.
Rates came off in both the Pacific and Atlantic basins.
There was also talk of Ultramax vessels offering discounts for Charterers to consider, which further eroded rates as we witnessed falls on the Panamax routes all week.
There was limited period activity, with a ten year old 82,000-dwt fixed for eight to 11 months at $17,000.
There was some hope midweek in the Pacific basis NoPac and Indonesian demand.
But this resulted in no positive moves and a widening bid-offer spread meant there was little fixing activity to report.
Front haul trips from east coast South America were softening.
And, as the tonnage list continues to grow, there could be further weakness towards the end of summer.
Meanwhile, the supramax index gained 37 points to 1,735 points on Friday, rising for the sixth consecutive session.
Overall it was a rather optimistic week for the sector, despite summer holiday season in the Atlantic region, as sentiment moved into positive mode in many areas.
Although period activity remained slow, a 53,000-dwt open Tuticorin was heard to have been fixed for three to five months trading in the low to mid teens.
As the week closed, brokers said that more enquiry for September dates was entering the market from key areas such as the US Gulf although little fixtures surfaced.
Better activity was also seen from the East Mediterranean, a 63,500-dwt fixed from here redelivery West Africa at $21,000.
Stronger levels were also seen in Asia with tonnage availability becoming a bit ‘tight’, brokers said.
A 58,000-dwt fixing from SE Asia via Indonesia redelivery CJK in the upper $20,000s.
Further north, a 63,000-dwt was reported fixed delivery Mokpo for a trip via US NoPac redelivery Chittagong at $22,000.
It remains to be seen if this trend will continue over the course of the upcoming weeks.
In equity markets, U.S. stocks fell and the dollar rose on Friday, while Treasury yields gained, with traders anxious about inflation and what the Federal Reserve will do to combat it.
Thus, the U.S. benchmark 10-year Treasury yield rose to a month high of 2.9776%, just shy of the 3% threshold it crossed in May for the first time since 2018.
With higher rates looming, large technology stocks such as Amazon.com Inc and Alphabet Inc fell more than 2%.
Microsoft fell 1.3%.
Cryptocurrencies fell broadly as Bitcoin slumped 8.5% to $21,434, according to CoinDesk.
Retailers, banks and communications companies also fell sharply amid the broad slide.
Meme stock Bed Bath & Beyond sank 43.8% after the high-profile activist investor Ryan Cohen confirmed that he’s sold his stake in the company.
Major banks such as JPMorgan Chase & Co, Bank of America Corp, and Deutsche Bank AG declined more than 2%, a reversal of the sector’s late-summer rebound.
And an earnings miss by heavy equipment maker Deere & Co. added to the risk-off mood.
Bright spots included General Motors, which rose 2.9% and Foot Locker soared 21.1%.
In this context, the Dow Jones Industrial Average fell 292.30 points or 0.86%, to 33,706.15, the S&P 500 lost 55.26 points or 1.29%, to 4,228.37, and the Nasdaq Composite dropped 260.13 points or about 2%, to 12,705.22.
Small company stocks also lost ground, pulling the Russell 2000 index 2.3% lower, to 1,957.35, as lost 43.38 points.
Thus, all three major indexes registered losses for the week.
Particularly, the S&P 500 fell about 1.2% and the Nasdaq slid 2.6% in their first weekly declines after four weeks of gains.
The Dow lost about 0.2% for the week.
In Europe, European shares fell on Friday and posted a weekly loss as the highest-ever jump in German producer prices in July added to gloom over the economic outlook.
The pan-European STOXX 600 ended 0.8% lower.
The MSCI world equity index, which tracks shares in 47 countries, was down 1.3%.
Next week, investors will be paying close attention to minutes from the European Central Bank’s July meeting, as well as comments by Fed Chair Jerome Powell when he addresses the annual global central banking conference in Jackson Hole, Wyoming, on Aug. 26.
“Incoming data, on net, suggests the U.S. economy retains fairly healthy momentum”, as there are improving motor vehicle assembly and retail sales data, even if there is a declining housing numbers.
However, even if incoming data was not uniformly strong, a stronger momentum will ultimately be met with additional policy rate firming, analysts said.
In currency trading, with more hawkish Fed official comments on Thursday helped push the dollar index up on Friday around 0.5%, a one-month high.
The euro was down 0.44% at $1.003.
In currency trading, the dollar index on Friday rose by +0.60%, extending Thursday’s gains up to a 5-week high.
Expectations for the Fed to maintain its aggressive rate-hike path are boosting T-note yields and supporting the dollar.
Also, weakness in the Chinese yuan is giving the dollar a boost as central bank divergence between the PBOC and Fed pushed the yuan down to a 1-3/4 year low Friday at 6.8188 yuan/USD.
In addition, Friday’s stock slide has boosted the dollar’s liquidity demand.
In this context, the EUR/USD on Friday fell by -0.51% to 1.0037 and posted a 5-week low.
Soaring German producer prices was bearish for EUR/USD after Friday’s data showed German July PPI rose a record +37.2% y/y, stronger than expectations of +31.8% y/y.
The euro was also under pressure on concern that the ongoing energy crisis in Europe will throw the Eurozone economy into recession.
Losses in EUR/USD were limited after the 10-year German bund yield Friday rose to a 4-week high, strengthening the euro’s interest rate differentials.
The USD/JPY on Friday rose +0.77% to 136.93.
The yen Friday fell for the fourth straight session and dropped to a 3-week low against the dollar.
The yen was under pressure Friday from higher T-note yields after the 10-year T-note yield climbed to a 4-week high.
Also, central bank divergence continues to undercut the yen with the Fed in the middle of a rate-hike cycle while the BOJ maintains QE and record-low interest rates.
In Canada, the condition of the spring wheat crop in Alberta lost 3% over the past two weeks to 76.8% Gd/Ex.
As for durum, Alberta’s durum crop condition is 46.2% Gd/Ex, down 2% from when they were last reported two weeks ago.
However, Alberta Ag increased their yield prospects from 52.3 to 52.8 bushels per acre.
In Manitoba, harvest has started in winter wheat and fall rye, with a good portion of those crops already combined.
Reported yields are average for both crops.
Crop condition looks good to very good in most parts of the province.
Widespread harvest is expected to begin for spring cereals in about two weeks.
Many winter wheat fields are harvested, yield reports are between 60 to 75 bu/acre.
Quality has been variable.
Spring wheat is beginning to turn colour in the heads, and kernel development is reaching hard dough in most locations.
The spring wheat crop is rated mostly good to excellent (85% avg), and pre-harvest application may begin in approximately 10 days on the earliest crops.
Pre-harvest application may be more common this year as crop maturity is less uniform in some locations due to delayed seeding/emergence.
Wheat crops have elevated levels of disease due to favourable conditions, fusarium, septoria, and smut are more common this year.
Saskatchewan’s wheat harvest reached 5% complete, compared to their 8% average pace and 20% last season when drought speeded things up.
Producers made the most of the hot dry weather by harvesting as much as possible before thunder and rainstorms rolled through the province on the weekend.
The southwest is leading harvest with 17 per cent of their crop now in the bin, followed by the west-central with eight per cent.
Some producers in the southeast have begun harvesting earlier seeded crops that matured and they now have two percent of their crop in the bin.
The east-central region has one per cent of their crop harvested and the northern regions have not yet started harvest operations on a large scale.
Producers in the southwest and west-central are reporting that they are seeing yields well below average.
Thirty-six per cent of the winter wheat, 22 per cent of the fall rye, 16 per cent of the field peas, 24 per cent of the lentils and two per cent of canola has been combined.
Many fields have been swathed and are close to being ready to be combined.
There was precipitation in every region.
Rain was now too late for annual crops in the driest areas of the province.
Cropland topsoil moisture across the province is rated as three per cent surplus, 60 per cent adequate, 24 per cent short and 13 per cent very short.
Hay and pasture land topsoil moisture is rated as two per cent surplus, 58 per cent adequate, 24 per cent short and 16 per cent very short.
Crop damage causes for the period were attributed to insects such as aphids, diamondback moths and grasshoppers, strong winds, heavy rains and hail.
There were several reports across the province concerning hail damage; some crops only received minor damage and are expected to recover while others were completely cut down.
Grasshoppers have caused significant crop damage all season, and producers who are now harvesting report they are dealing with plugged equipment from harvesting fields infested with this pest which creates delays and will require them to clean their seed.
Meantime, Canada exported 298.4k mt of wheat in the second week of the shipping season, while of durum wheat were exported 58.8k mt.
Durum exports seasonally stay low in August-September and then pick up into October-November.
There are still 1.8 million mt of visible old crop supplies in the Canadian elevator system which will keep export channels full until new crop is available.
The large crop in Western Canada means that there will be a lot of demand for allocation at the elevator, so there are worry that rail service could be inadequate due to large coal shipments this fall.
In this context, as of August 15, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $473.90 per tonne, up C$15.07/t from prior week;
– for the N2 class CWRS 13.0% – $468.10/t, up C$15.05 wow;
– for the N3 CWRS – $475.80/t, up C$18.86 from prior week.
As of August 15, 2022, for the N1 CWAD 13% (durum wheat first class) average street price were at C$433.95, shedding by C$0.73 week on week.
Export basis West Coast & Central SK, however, sligthly increased from C$ 233.95 to 236.62 a tonne.
Thus, delivered FOB price Great Lakes was posted at C$670.57.
That was up C$1.94 from prior week.
Meantime, per latest data from European Commission, as of August 17, 2022, Durum wheat – CA St Lawrence (CWAD) was offerd at C$597.68/t, down C$41.02 from a week earlier.
As of August 12, 2022, for the N1 CWAD 13% (durum wheat first class), average street price in REGIONAL ZONES were at C$421.69 per tonne, down C$17.27 from prior week.
(1USD=Cnd$1.2993, up from 1.2774 a week earlier).
From South America, Argentina’s corn harvest for the current 2021/2022 season is estimated to reach 52 million tonnes, climbing 6% higher than the group’s prior estimate of 49 million tonne forecasted a week ago, due to better-than-expected yields in the Chaco and Salta provinces, along with an upward revision to planted acres to 7.7 million hectares, from 7.3 million previously.
Harvest is around 98% complete.
For the upcoming 2022/2023 corn season, in which planting will begin in the coming weeks, the exchange forecasts an area of 7.5 million hectares.
That would be smaller than the current season, due to a drop in the profitability of the crop and low soil moisture.
Meantime, the exchange maintained its forecast for land planted with wheat for the 2022/2023 cycle at 6.1 million hectares.
According to BAGE report, 70.6% of the standing area had adequate/optimal water conditions, concentrated mostly in the south of the agricultural area.
Brazil is likely to have a bumper crop this coming season, even if weather is uncooperative.
The odds favor a larger crop in Brazil simply because they will be starting with 4+ million more acres than last season, some analyst notes.
That will help partially cover any production shortfall in Southern Brazil.
Meantime, Brazil is expected to reduce fertilizer consumption to 43 million tonnes in 2022, as farmers are poised to cut applications when the planting of crops like soybeans begins in September.
Last year, Brazilian farmers used an estimated 45.85 million tonnes of crop nutrients, according to Anda, a fertilizer industry group.
Fertilizer prices have shot up in recent months.
In spite of that, Brazil, which is heavily dependent on imports, continued to buy record volumes.
Recently, Norway’s Yara YAR.OL, which operates in Brazil, said fertilizer deliveries to local farmers would stabilize or potentially fall in 2022, citing the global rise in prices that has also caused domestic logistical bottlenecks.
Brazil relies on imports for about 85% of its needs.
It imports crop nutrients from Russia, Morocco, Jordan, China and Canada, among others.
In this context, as of August 11, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $408, down $2/t from prior week.
Argentina corn feed was up $1/t for the week, closing at $281.
Brazilian corn feed (Paranagua) was valued at $291, down $2 from prior week.
Argentina feed barley, was unchanged for the week to $345.
Argentina soybean was down $15 at $596.
Brazilian soybean lost $10 finishing the week at $614.
In Europe, European Union 2022/23 soft wheat exports and maize imports rose sharply in the last week monitored, according to data from the European Commission.
However the EU’s executive has reported in recent weeks that data it compiles on exports and imports of cereal and oilseed products could be incomplete.
Particularly, for soft wheat, EU exports in the 2022/23 season that started on July 1 had reached 3.58 million tonnes by Aug. 14.
That compared with 2.49 million tonnes reported by the Commission in its previous publication that went up to Aug. 5, and put this season’s exports ahead of a year-earlier volume of 3.14 million tonnes.
Soft wheat exports from France so far this season were put at 1.53 million tonnes, up from 914,000 tonnes in the previous report and closer to what shipping data suggests.
EU corn imports rose even more steeply in the latest reporting week to reach 3.59 million tonnes compared with 1.99 million in the Commission’s previous data.
A country breakdown showed Ireland as the EU’s biggest maize importing country so far this season with 1.13 million tonnes, an unusually large amount that surpassed Ireland’s maize imports last season and could suggest a data error.
Analysts are expecting the EU to import more corn this season.
By the same week in 2021/22, indeed, the EU had imported 1.78 million tonnes of corn, the data showed.
For barley, EU exports so far in 2022/23 had reached 1.23 tonnes against 2.13 million a year ago.
However, wheat markets have been pressured past week by the resumption of sea exports from Ukraine, coupled with talk of falling wheat prices in both Ukraine and Russia, which is trying to shift an expected record harvest.
Thus, on Thursday, December wheat had fallen to 301.25 euros, the weakest second-month price on Euronext since Feb. 25.
But, a rebound in Chicago, a fall in the euro against the dollar, and talk of demand for competitively priced lower-protein wheat in France encouraged the Friday’s rebound on Euronext.
Indeed, Dec wheat rose on Friday, recovering from six-month lows, settling up 1.3% at 310.00 euros ($311.12) a tonne.
Over the week, however, the contract was down 5.6%.
The state of French maize crops declined to a new decade low, data from farm office FranceAgriMer showed on Friday.
An estimated 50% of French grain maize was in good or excellent condition by Aug. 15, down from 53% the previous week.
However, the drop in the maize score was more moderate than in previous weeks, suggesting showers and cooler temperatures during the week may have curbed stress on plants.
Rain relief for maize in France and other parts of Europe has contributed to a sharp fall in Euronext corn price past week.
Also, the hot, dry summer has helped grain maize, usually harvested from September, to runn a week ahead of the average growth pace of the past five years, FranceAgriMer said.
In the Great Britain, harvest 2022 has continued at a rapid pace and is nearing completion, with 89% of the GB harvest complete as at 16 August.
The five-year average for harvest progress by this point in the season (week 6) is 52%.
Winter wheat GB harvest is estimated to be 92% complete now, with the majority of crop left to be cut in the North East and Scotland.
GB winter oilseed rape (WOSR) harvest is now complete, with the winter barley harvest being completed in week ending 9 August (week 5).
Spring barley GB harvest is now 73% complete.
As at 16 August, it was estimated that 79% of the GB oat area had been harvested.
Drought has now been declared in parts of Eastern and South England following weeks of hot and dry weather.
The UK average rainfall for the week ending 9 August 2022 was only 7% of the long-term average (1.0 mm compared to 13.4 mm).
The South East was the driest region (0.1 mm), whilst Scotland was the wettest (3.8 mm).
The week ending 16 August 2022 saw another heat wave.
This has enabled many to save on fuel costs by not running the grain drier.
There has been a continued backlog of grain in stores, as haulage issues remain, due to shortages of suitable lorries and drivers.
Meantime, non-commercial market participants lowered their net long position in Euronext’s milling wheat futures and options in the week to Aug. 12, data published by Euronext last Wednesday showed.
Non-commercial participants, which include investment funds and financial institutions, reduced their net long position to 75,730 contracts from 79,315 a week earlier, the data showed.
Commercial participants increased their net short position to 103,147 contracts from 100,422 a week earlier.
Commercials’ short positions accounted for 64.1% of the total short position, while commercial long positions accounted for 48.8% of total long positions.
Non-commercial short positions represented 35.9% of total short positions, while non-commercial net long positions accounted for 51.2% of the total longs.
In Euronext’s rapeseed futures and options, non-commercial market participants net short position was mostly flat, at 21,591 contracts from 21,592 a week earlier.
Commercial participants increased their net long position in rapeseed to 21,636 contracts from 19,021 a week earlier.
In this context, September wheat price, on Euronext closed the week at €315 per tonne, down €23.75/t from past week.
November corn price, was €25.75/t weaker for the week, closing at 310.75 euros per ton.
Rapeseed Nov contract closed at €610.5/t, down €54.75/t for the week.
Nov-22 UK wheat feed contract, closed at £257.25/t, down £14.1/t week on week.
Meantime, as of August 18, 2022, FOB prices in US dollar for French wheat with 11.5% protein and Oct delivery, were at $323/mt, down $32 from prior week.
German wheat, Deposilo Hamburg, was valued at $355.20/t, down $10.09/t from past week.
Baltic wheat, delivery first Vilnius, quoted $324.10, up $3.96 from prior week.
French durum wheat – delivered La Pallice Spot – July 2022 basis, was at $441.5/mt, down $10 from prior week.
Spanish durum wheat Sevilla (Depo Silo), was valued this week at $491.66 per tonne, down $6 wow.
Italian durum wheat Bologna (Delivered to first customer), not quoted.
Corn, delivered Bordeaux Spot – July 2022 basis, was at $330.12 per tonne, down $31.07/t from past week.
Corn FOB Rhin Spot – July 2022 basis, was down $35.65 to $306.04/t.
Feed barley delivered Rouen was at 272.92$/t, down $29.77 per tonne.
Malting barley FOB Creil Spot – July 2022 basis was at $342.16 per tonne, down $35.44/t from prior week.
Rapessed FOB Moselle – 2022 harvest was at 606.05$/ton, down $71.18 compared to prior week.
Standard sunseed FOB Bordeaux – 2022 harvest was down 42.22$ from prior week at $732.48 per tonne
(Eur/USD = 1.0034 vs last week 1.0261).
From Russia, SovEcon raised its wheat estimate to 94.7 Mt up from 90.9Mt.
Russia Ag Min. reported that, as of 15 August, 67.8Mt wheat had been harvested.
According to the estimates of the Russian Ministry of Agriculture, by the end of this year, farmers plan to harvest 130 million tons of grain crops, 22.6 million oil crops, 41.5 million tons of sugar beets, 7 million tons of vegetables and potatoes, and 1.5 million tons of fruits and berries.
Meantime, Russia exported 890,000 tonnes of grain in the second week of August, compared with 780,000 tonnes the previous week, fellow consultancy Sovecon said, citing port data.
Russia will send a trial shipment of wheat to Vietnam in September or October as it aims to resume active supplies to the country, its agriculture official said on Friday.
Vietnam slashed purchases of the grain from Russia, in 2019 after finding imports containing certain thistle seed as it feared this could spread across Vietnam and damage crops.
In this context, Russian wheat export prices fell.
Particularly, as at August 15, 2022, Russian prices for wheat with 12.5% protein content and for supply from Black Sea ports fell by $5 to $350 a tonne free on board (FOB), the IKAR agriculture consultancy said in a note.
The wheat price for immediate supply was $349-353 per tonne vs $350-355 prior week, SovEcon added.
Prices in the domestic market also fell, Sovecon said because of weaker demand from exporters and concerns about the quality of the new crop.
Particularly, Price for domestic 3rd class wheat, European part of Russia, excludes delivery, was at 12,825 rbls/t ($208.2) -125 rbls from prior week (Sovecon);
Price for sunflower seeds was at 25,700 rbls/t +500 rbls (Sovecon);
Price for domestic sunflower oil was at 73,675 rbls/t +600 rbls (Sovecon);
Price for domestic soybeans was at 34,250 rbls/t +150 rbls (Sovecon);
Export price for sunflower oil was at $1,430/t +$40 (Sovecon);
Export price for sunflower oil was at $1,360/t +$30 oil (IKAR);
Price for white sugar, Russia’s South was at $1,047.5/t -$39.5 (IKAR).
($1 = 59.1000 roubles)
In other news, the vice president of the Russian Grain Union, Alexander Korbut, warned that Russian farmers may face a shortage of spare parts for farm equipment due to sanctions from the west.
He said the problem will likely be more pronounced in 2023.
Meantime, Russian farmers have increased the purchase of fertilizers since the beginning of the year by 17% – up to 3.84 million tons.
Since the beginning of the year, Russian farmers have purchased 3.84 million tons of fertilizers, thereby fulfilling the plan of the Ministry of Agriculture of the Russian Federation by 77%, and compared to the same period last year, this is an increase of 17%, according to the Russian Fertilizer Association (RAPU).
From Ukraine, the United Nations Secretary-General Antonio Guterres encouraged a “spirit of compromise” between Ukraine and Russia while in Ukraine past week.
Guterres noted that 21 ships had left Ukraine under the deal that allowed Ukrainian grain to be shipped under strict conditions.
He said 15 more ships left Istanbul, sailing towards Ukraine to load more grain for export.
However, the current deal brokered by the U.N. and Turkey has allowed Ukrainian wheat exports to resume, significantly reducing global wheat benchmarks.
U.N. Secretary-General Antonio Guterres, also said the United Nations is working with the United States and European Union to overcome obstacles to Russian food and fertilisers reaching world markets.
Turkey’s defence ministry says four more ships carrying foodstuffs have left Ukraine’s ports bringing to 31 the total number of vessels to leave.
Ukraine’s wheat harvest is 91pc complete at 17.4Mt, according to grain traders’ union UGA.
It said total harvest of grains and oilseeds stood at 25.7Mt, 2.3Mt higher than Ukraine Ag Ministry had indicated.
Ukraine’s total production recently was forecast 65Mt to 67Mt, down around 23% from last year’s record of 86Mt.
The Ministry said Ukraine had exported 2.99Mt of grains since July 1, 1.94Mt corn, 783,000t wheat and 257,000t barley, down 52pc from the same period last year.
Export volumes have picked up this month after three Black Sea ports were reopened.
In this context, Ukrainian traders are often forced to offer their grain at a price lower than a market price due to high risks and weak desire of ship-owners to enter the unblocked Ukrainian seaports.
Thus, as at August 15, even Ukrainian 11.5% wheat and corn could have price at 340-360 and 315-335 USD/t FOB or even higher, Ukrainian traders were forced to offer grains at about 290 and 260 USD/t FOB.
However, many importers still do not like these prices, as the offer prices of Turkish importers revealed that they still wanted to get 25% discount.
From the Middle Kingdom, China’s soybean imports from Brazil dropped in July from a year ago, while shipments from the United States increased, customs data showed on Saturday.
High prices, indeed, curbed demand for South American cargoes.
Particularly, China imported 6.97 million tonnes of the oilseed from Brazil in July, down from 7.88 million tonnes a year earlier.
Total imports last month dropped 9% from a year before to 7.88 million tonnes, the lowest number for July since 2016.
Meantime, U.S. arrivals in July reached 377,642 tonnes, up from 42,277 tonnes in the same month last year.
Demand for soymeal from the feed sector has come under pressure after hog farmers made huge losses earlier this year.
Industrial feed production fell almost 7% in July versus a year ago, according to the China Feed Industry Association.
Crushers in the key processing hub of Rizhao are currently losing about 610 yuan ($89.84) from each tonne of soybeans processed and crushing margins have been negative since mid April.
For the first seven months of the year, China brought in 34.68 million tonnes of Brazilian beans, up from 34.01 million tonnes in the same period of 2021.
Imports from the United States for January to July came in at 17.92 million tonnes, down from 21.61 million tonnes the previous year.
Chinese Customs data, also had July corn imports at 1.54 MMT, while total imports at 15.13 MMT.
China wheat imports were at 0,78 MMT, bring cumulative totals to 5.7 MMT.
Meantime, rumours abound that China is buying up big in the wheat market, with up to 1 million tonnes of new-crop Australian booked in the past month or so, and a significant tonnage of French wheat also.
China warned, a severe dry spell along the Yangtze could last well into Sep.
In this context, the country issued its first national drought alert of the year.
As many as 66 rivers across 34 counties in the southwestern region of Chongqing have dried up, state broadcaster CCTV reported.
China’s water resources ministry has instructed drought-hit agricultural regions to draw up lists determining who can access supplies at any particular time, to ensure they do not run out.
In other news, Chinese Sinograin and COFCO have set up a joint venture.
($1 = 6.7895 Chinese yuan)
From South East Asia, India raised its wheat production estimate past week to 106.84 million tonnes in 2022, slightly higher than the previous estimate of 106.41 million tonnes.
Local wheat prices jumped to a record 24,309 Indian rupees ($306) per tonne past Wednesday.
That was up nearly 15% from recent lows that followed the government’s surprise ban on exports on May 14, ending hopes that India could fill the market gap left by missing Ukraine grain.
The government’s lower wheat procurement and rising local prices are indicating a sharp drop in production, said a Mumbai-based dealer with a global trading firm.
“Its very difficult to believe in the government number of 106.84 million tonnes. Production could be around 95 million tonnes,” he said.
India’s wheat procurement fell 57% from a year ago to 18.8 million tonnes.
There were rumors that the south Asian country could scrap a 40% duty on wheat imports and cap the amount of stocks traders can hold to try to dampen record high domestic prices, government and trade officials said.
However, India has sufficient stocks of wheat and there is no plan to import the grain, the government clarified.
Meantime, local wheat prices jumped to a record 24,453 rupees ($305.97) per tonne last Friday.
($1 = 79.9200 Indian rupees).
From Australia, the past week has seen a considerable fall in wheat and oilseed prices around Australia.
One of the major reasons for the fall in pricing levels is the rain.
Large parts of the Australian cropping belt, indeed, have been hit by rain.
Crop prospects remain very positive especially for WA and Victoria.
The 8-day forecast has showers continuing for southern NSW, Vic and parts of SA while Qld, northern NSW and WA are looking at totals of less than 10mm for the week.
If the crop grows, we may see more pressure on pricing levels.
Grower marketing for new crop has been very slow with estimates of around 15pc sold nationally from the grower.
In Western Australia, the prices have seen the largest fall.
With NSW still holding big stocks of SFW wheat from last year’s rain-affected harvest, and forecasts pointing towards a wet spring and possibly harvest, domestic consumers can only see downside from current prices.
As growers upping their selling in order to clear out storages ahead of harvest, which will start next month in Central Queensland (CQ), markets are feeling the pressure.
In this context, indicative delivered prices in Australian dollars per tonne for old crops past week were:
Barley Downs: $385, down $5 from Aug 11;
SFW wheat Downs: $400, down $10 from Aug 11;
Sorghum Downs: $350, down $10 from Aug 11;
Barley Melbourne: $368, down $20 from Aug 11;
ASW wheat Melbourne: $420, down $8 from Aug 11.
SFW wheat Melbourne: $400, down $20 from Aug 11.
Growers continued offering new crops.
Particularly, past week prompts were:
Barley Downs: $375, unchanged from Aug 11;
SFW wheat Downs: $398, down $4 from Aug 11;
Sorghum Downs: $332, up $2 from Aug 11;
Barley Melbourne: $365, down $25 from Aug 11;
ASW wheat Melbourne: $412 up $2 from Aug 11;
SFW wheat Melbourne: nq.
(AUD/USD=> US$0.6872 vs. US$0.7121 prior week).
Watching this week’s market, today will show the weekly Export Inspections report, with the Crop Progress data updated that overnight after the session close.
Cold Storage data from July will also be released Monday night.
Skip ahead to Wednesday and EIA will release ethanol numbers for stocks and production.
Thursday is the weekly Export Sales release from FAS.
It is also the last trading day for August feeder cattle futures and options.
Friday marks the expiration of the September grain options.
That’s all, thank you.
We wish you a good start to the week.
Author: Sandro F. Puglisi
