Daily International Market View

Grain prices soared again yesterday due tight US domestic supplies, the weather worries in Brazil and the late start to plantings in the U.S..

In fact, there’s a solid storm system this week in the US moving through the eastern and southern corn belt, including a lot of the Soft Red Winter wheat areas, but otherwise good weather is forecast for fieldwork across the western and northern areas as temperatures warm back up.

South American weather maps remain very dry with the longer run models shifting slightly drier again in the latest runs too. 

There’s next to no rain forecast for two weeks across Brazilian safrinha areas.

Consequently, corn finished the session limit up, with all futures carving out new life-of-contract highs. 

Soybeans trended 2% higher.

Wheat contracts closed with gains ranging between 3% and 4%.

On macro markets, investors are watching closely for a ton of corporate first-quarter earnings reports that will be released later this week. 

US Federal Reserve Open Market Committee (FOMC) April meetings are scheduled for this week.

Concerns about India and the coronavirus spikes there remain in play for the global economy, with another record day for cases reported last night. 

Brazilian cases have finally been on the decline, but markets have no idea when India will hit the peak.

In this context, on Wall St., the Dow inched 61 points lower to 33,981, remaining, however, near all-time highs captured earlier this spring. 

Energy futures were lightly mixed, with crude oil down around 0.3%. 

Gasoline dropped 0.75%. 

Diesel, in contrast, firmed 0.25% higher.

The U.S. Dollar softened slightly.

Coming back on grains market, 

Weekly US inspections figures were strong yet again on corn at 1.9Mt, and bean about as expected, 0.2Mt, wheat 0.5Mt of which 0.162Mt to China and 0.182Mt sorghum/milo in the mix to China too.

Corn export inspections shifted 25% ahead of the prior week’s tally through April 22. 

That was also better than all trade estimates. 

China was the No. 1 destination.

Also soybean export inspections inched slightly ahead of the prior week’s.

Mexico led all destinations.

Meantime US wheat export inspections faced a moderate week-over-week decline, with China that led all destinations.

Regular US crop conditions reports were released after the close of sessions. 

The winter wheat crop rating in the USA fell to 49% against 53% last week

However, there were no real surprises on plantings progress. 

In deed, corn sowing is estimated at 17% until last Sunday, compared to 20% to date on the average for the past 5 years. 

Soybeans are made 8%, ahead of the 5% average. 

Spring wheat sowing is 28% against 19% on average at this date.

In this context, corn basis bids were steady to firm, rising between 2 and 5 cents higher.

While some soybean basis bids jumped 15 cents higher.

Canola prices are also soaring to reach over 900 Canadian dollars per tonne, a record.

Meantime, Viterra/Glencore in Canada is set to build, and open in 2024, a new canola crush plant in which can handle 2.5Mt of canola.

Also on European market, grain prices continued to soar across all products, except rapeseed even if prices continue to be very high.

Wheat in particular benefited from the return of international buyers to accelerate significantly in the green. 

Meantime, the European Union observatory is revising downwards its estimate of future soft wheat yields for the EU to 5.86 t / ha against 5.89 t / h estimated last month, as a result of the cold of recent weeks. In winter barley, the European yield is also revised downwards for the next season to 5.83 t / ha against 5.88 estimated last month. 

Finally, in rapeseed, unsurprisingly, the estimated yield is down to 3.19 t against 3.26 last month.

The situation in rapeseed is also the most tense, with areas in France posted under 900,000 ha by some analysts, coupled with yields which will probably be below the 5-year average. 

Finally, crushing remains active thanks to the prices of vegetable oils which are soaring on the international scene. 

According to the latest data from the European Commission, 2020/21 EU corn imports reached 478.3 million bushels through April 25, marking a 29.7% year-over-year decrease so far.

European Union soybean imports during the 2020/21 marketing year are at 438.7 million bushels through April 25, which is trending slightly above last year’s pace so far. 

EU canola imports are also slightly higher year-over-year, with EU soymeal imports coming in slightly slower than last year’s pace.

European Union soft wheat exports during the 2020/21 marketing year reached 796.6 million bushels through April 25, which is 26.5% below last year’s pace so far. 

EU barley exports are slightly higher year-over-year, in contrast, with 299 million bushels.

From Black Sea basin, Ukraine's weather conditions in the second decade of April accentuated the delay since the emergence of dormancy in the development of winter crops.

The cumulative temperature since the end of winter remains low and the frosts still present, depending on the region. 

Thus, the delay taken by winter crops appears on average at 2 weeks or more in certain regions of the country.

The consequences of this late spring are also being felt in the progression of spring sowing, which, whatever the crop, is already significantly behind compared to last year.

Also Russian spring plantings are significantly behind last year after falling temperatures and snowfall that hampered work (and caused frost damage to winter crops). 

In India, local wheat harvest there is ongoing and the Food Corporation of India’s reporting they’ve already bought 20 million tonnes (Mt) of wheat, well above last year’s levels and nearly half of their targets.

Aussie local market was quiet yesterday with half the country on holiday and there was fairly limited activity in both trade and origination markets.

Meantime, planting still pushing along nicely in the good weather, although there are starting to be some concerns building about the dry forecast.

On the international trade scenario, Egypt’s GASC wheat tender will be held today afternoon EU time. 

Result the day after tomorrow, April 29. 

Egypt is looking for August 2021 deliveries.

Black Sea region cash markets started the week firmer, tracking the global move, so we’ll see to what extent traders are interested getting short into Egypt.

Algeria’s OAIC tendering again for old crop wheat. 

Its most likely EU wheat will be successful at tender based on current values but there are some open questions about prices after the Matif rally into delivery.

Algeria is shopping for May-June loads.

South Korea purchased 2.6 million bushels of corn, likely sourced from South America, in a private deal that closed on Friday. 

The grain is for arrival by late August.

Bangladesh issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins that closes May 6. 

The country is one of the world’s largest wheat importers, buying approximately 220 million bushels annually.

China sold another 11.5 million bushels of its state wheat reserves on auction late last week, which was 7.8% of the total available for sale. 

The country has offered seven similarly sized wheat auctions since the beginning of March in an attempt to stabilize soaring feed costs for local users.

The USA yesterday sold 120,000 t of soybeans to an undisclosed destination.

Tonight we will see how the sessions close.