January 7, 2024 - Newswires

January 7, 2024 - Newswires

Soy and corn jumped on hot and dry weather in Argentina; wheat rebounded, having hit life of contract lows; All three commodities gained ground on a dip in the U.S. dollar ...


Good afternoon, Farmer Family ...

US farm markets ended mostly higher, on Monday.

Corn prices jumped 1.55%.

Soybeans rose 0.6%.

The rest of the soy complex was mixed as soymeal eased 0.42%, while soyoil moved 1% higher.

Wheat prices rallied with Chicago SRW bouncing 2.13%, Kansas City HRW surging 2.64%, and Minneapolis spring wheat climbing 2.51%.

  • Corn prices surged to a more than six-month high amid growing concern over dry conditions in Argentina.
  • Soybeans also turned higher on a lack of significant moisture in the South American country.
  • Meanwhile, wheat drew support from a technical correction, having hit life of contract lows on Friday.
  • All three commodities gained ground on a dip in the U.S. dollar.
  • The DXY slid as much as 1.07% on Monday against a basket of other major currencies, as the Washington Post reported that tariffs proposed by U.S. President-elect Donald Trump might be more narrowly focused than he previously threatened.
  • The uncertainty surrounding the economic impact of such tariffs has been expected to encourage the U.S. Federal Reserve to slow interest rate cuts.
  • Meantime, USDA’s weekly Export Inspections report showed a total of 847,463 MT of corn shipped in the week that ended on January 2.
  • That was a drop of 6.62% from last week and down 22.42% from the same week last year.
  • Marketing year to date shipments are now 16.236 MMT, which is still 24.49% above the same period in the 2023/24 MY.
  • For soybeans, data indicated a total of 1.285 MMT of soybeans exported in that week.
  • That was a decline of 21.8% from last week but up 23.5% from the same week in 2024.
  • Marketing year shipments totaled 29.956 MMT through that date, which is an increase of 23.2% over the same period last year.
  • For wheat, all wheat shipments totaled 412,342 MT.
  • That was 21.6% above last week but down 17.85% from the same week last year.
  • Marketing year shipments have totaled 12.718 MMT, which is still 25.1% from the same time last year.














In this context ...

  • Corn basis bids were steady to soft after trending 2 to 5 cents lower across three Midwestern locations.
  • Soybean basis bids shifted 2 cents higher at an Ohio elevator and 4 cents higher at an Illinois river terminal while holding steady elsewhere across the central U.S..
  • The wheat basis improved at a wheat co-operative in Goodland, Texas, though bids remained flat elsewhere.
  • Protein premiums for HRW wheat shipped by rail to or through Kansas City were unchanged.
  • Commodity funds were net buyers of CBOT corn, wheat, soyoil and soybean futures contracts, while they were net sellers of soymeal.

After the sessions close ...

A delayed weekly Commitment of Traders report indicated specs adding 67,859 corn contracts to their net long position as of 12/31.

  • That took them to a net long of 228,806 contracts, the largest net long since February 2023.
  • The report also indicated managed money slashing 25,436 soy contracts from their net short in the last week of the year.
  • Most of that was via short covering, as the net short stood at 42,447 contracts as of December 31.
  • The spec crowd in soybean meal were also covering shorts, with the previous record net short down 31,429 contracts to 64,942 contracts.
  • CFTC data showed speculators in CBOT wheat trimming 8,247 contracts from their net short position as of 12/31 to 86,762 contracts.
  • In KC wheat, they cut 1,075 contracts to a net short 33,861 contracts.

In other reports after the close ...

Condition ratings for winter wheat declined last month in Kansas, even as dry conditions subsided in parts of the state, the USDA said.

  • Individual state Crop Progress reports indeed showed KS winter wheat ratings at 47% gd/ex.
  • That is below the previous rating in the middle of December at 56% but above the 43% from the same time last year.
  • Ratings in OK also slipped, down 3% from the end of November at 45%.

This morning ...

Corn and soybean retreated, on profit takings. Wheat also fell, partly weighed by a disappointing weekly export sales.

  • Notably, the most-active corn contract on the Chicago Board of Trade was down 0.6%, by 0548 GMT, soybeans were down 0.7%, while wheat dropped 0.74%.
  • However, a weaker U.S. dollar and concerns over dryness in Argentina kept a floor on prices.


South America


Brazil

Brazil is still expecting to haul in a record-breaking soybean harvest in just a couple of months.

  • Meantime, Brazil’s trade ministry reported December corn exports at 4.266 MMT, which was down 29.64% from December 2023.
  • Also, sSoybean exports out of Brazil during December were reported at 2.004 MMT, which was down 47.65% from the same month last year.


Argentina

Hot, dry weather is beginning to take a toll on Argentina’s 2024/25 corn and soybean crops, per the Rosario grains exchange, which noted some areas northeast of Buenos Aires had received roughly a third of its normal rainfall in December.

  • Meantime, the Buenos Aires grains exchange additionally reported that “symptoms of water stress are beginning to be observed” in some areas.


Europe

European grain markets ended mixed, mostly lower.

  • Notably, benchmark March milling wheat on Paris-based Euronext settled 0.8% lower at 231.25 euros ($240.04) per metric ton.
  • MATIF corn Mar contract eased €0.25/t to €209.75/t, while rapeseed Feb contract was up €3.5/t to €513.75/t.
  • Wheat prices fell, as a jump in the euro against the dollar outweighed a rally in Chicago grains.
  • The euro rebounded from last week's two-year low, after the Washington Post reported that U.S. tariffs might be more selective than President-elect Donald Trump has previously threatened.
  • However, Trump later denied the report.
  • Matif wheat got too expensive against U.S. wheat, while Russian prices haven't risen as much as expected.
  • Volumes on Euronext however remained moderate as many market participants were catching up after the New Year holiday.
  • Grain markets are also looking ahead to the world crop outlook from the USDA on Friday.
  • In oilseeds, rapeseed prices have increased without however managing to close, for the upcoming February contract, above €515/t.
  • This contract closes at the end of January and still accounts for more than 25% of the total open position of this contract.
  • The approach of the closing and the expiry of the option contracts on this same deadline next week should lead to a rapid downward revision of this volume.
  • In the meantime, the price gap between the two front contracts has tightened sharply in recent weeks.


Middle East

Syria is unable to make deals to import fuel, wheat or other key goods due to U.S. sanctions and despite many countries, including Gulf Arab states, wanting to do so, Syria's new trade minister said.


Ukraine

The beginning of the winter period in Ukraine, turned out to be quite favorable for winter grain crops.

  • According to specialists of the National Academy of Agrarian Sciences of Ukraine, the absence of sharp fluctuations in temperature indicators and insignificant freezing of the soil allowed plants to continue noticiable processes of vital activity, almost without losses.
  • By the end of December, the condition of winter grain crops on the majority of sown areas indeed were characterized as satisfactory and good.
  • However, taking into account possible weather prospects, as well as the state of plants of winter grain crops, for a significant part of which it was slightly reduced frost resistance, their further wintering can be quite difficult, and will depend on the hydrothermal regime during the next two months.
  • The most threatening looks the situation with winter wheat crops, which was sown after sunflower in a relatively late date, namely in the second half of October - in the first decade of November.
  • Thus, in the absence of significant amplitude fluctuations in air and soil temperatures and the presence of snow cover, winter crops in the current growing year have all the prerequisites to endure unfavorable weather conditions with the least losses, - summarized the experts.


Russia

According to the data from Rosselkhoznadzor, as of December 15, the Russian Federation has exported 83.5 mln tonnes of grain and processed products since the beginning of 2024.

  • That is 4% higher than a year earlier.
  • The main buyers of the above products in 2024 were the countries of the Middle East, Africa and Asia.
  • The largest increase in purchases of Russian grain products was noted on the part of Vietnam, Nigeria, Morocco, Sri Lanka and some other countries.
  • In addition, last year exports to Ethiopia, Djibouti, Palestine, Sierra Leone were resumed.
  • It is separately noted that, according to data, China has entered the top-5 buyers of Russian grain in 2024.
  • Export of spring wheat to this country has doubled, while barley rose by 43%.
  • In addition, China took the first place in imports of Russian oats, purchases of which increased by 23%.
  • Last year, the competent agencies of the two countries completed a multi-year work on the admission of Russian semolina and rye flour to the Chinese market.


Southeast Asia


India

Indian wheat prices jumped to a record high on Monday due to dwindling supplies amid robust demand from flour mills that are struggling to secure the grain to operate at full capacity.


Indonesia

Indonesia plans to impose a quota on wheat imports for animal feed to protect local corn farmers, its senior minister for food affairs said.


Malaysia

Malaysian palm oil prices slipped, pressured by weak demand from India.

  • Notably, the benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange shed 0.6%by the close.
  • Exports of Malaysian palm oil products for December fell between 2.5% and 7.8%, according to cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
  • India’s palm oil imports in December plunged to their lowest in nine months.
  • Meantime, Dalian’s most-active soyoil contract fell 1.43%, while its palm oil contract added 0.02%.
  • Supporting prices, the ringgit weakened 0.24% against the dollar, making the commodity cheaper for buyers holding foreign currencies.


International grain and oilseed tenders & trade

  • Algerian state agency ONAB has issued an international tender to purchase up to 240,000 metric tons of animal-feed corn from Argentina or Brazil.
  • The Taiwan Flour Millers' Association issued an international tender to purchase an estimated 114,650 metric tons of grade 1 milling wheat to be sourced from the United States. The deadline for submission of price offers is Jan. 9.


Outside markets ...


Energy markets

Oil prices eased in volatile trade.

  • Notably, Brent futures fell 0.3%, while U.S. West Texas Intermediate (WTI) crude fell 0.5%.
  • In the United States, new orders for manufactured goods fell in November amid weakness in demand for commercial aircraft while business spending on equipment appeared to have slowed in the fourth quarter, according to data from the Commerce Department's Census Bureau.
  • In Germany, annual inflation rose more than forecast in December due to higher food prices and a smaller drop in energy prices than in previous months.
  • To combat higher inflation, central banks often boost interest rates, which can slow economic growth and demand for energy.
  • Also, both crude benchmarks remained in technically overbought territory for a third day in a row.
  • Supporting prices, a winter storm marched across the United States, causing prices for natural gas, to spike 10%, while diesel futures closed at their highest level since Oct. 7.
  • Also, a slump in the DXY supported crude oil.
  • In a sign of firmer demand expectations, Saudi Aramco raised crude prices for Asian buyers in February for the first time in three months.

This morning, oil prices climbed, reversing earlier declines, as fears of tighter Russian and Iranian supply due to escalating Western sanctions lent support.

  • Notably, Brent futures were up 0.80%, at 1119 GMT, while U.S. West Texas Intermediate (WTI) crude climbed 0.63%.
  • Shandong Port Group issued a notice on Monday banning U.S. sanctioned oil vessels from its network of ports, according to market sources.
  • Meanwhile, cold weather in the U.S. and Europe has boosted heating oil demand, providing further support for prices.
  • However, oil price gains were capped by global economic data.


Ocean freight markets

The Baltic Exchange's main sea freight index snapped its five-day winning streak, falling 29 points to 1,043 points.

  • Notably, the capesize index dropped 85 points to 1,290 points.
  • The panamax index rose 21 points to a four-week high of 1,061 points.
  • The supramax index was down for the 17th straight month, shedding 17 points at 867 points.


Equity markets

US stock indexes ended mixed.

  • The Dow Jones Industrial Average fell 0.06%, the S&P 500 rose 0.55%, and the Nasdaq Composite rose 1.24%.
  • Chip stocks rallied after Nvidia’s assembly partner Foxconn reported record quarterly revenue driven by strong demand for AI infrastructure.
  • Micron Technology surged over +10%, Nvidia rose more than +3%, MicroStrategy climbed over +11%.
  • In addition, Paycor HCM (PYCR) soared more than +23%.
  • The price of Bitcoin hit a two-week high.
  • Economic data showed that the U.S. December S&P Global services PMI was revised downward to 56.8 from the preliminary reading of 58.5.
  • Also, U.S. factory orders fell -0.4% m/m in November, weaker than expectations of -0.3% m/m.
  • However, Oct factory orders were revised upward to +0.5% m/m from the previously reported +0.2% m/m.
  • In Europe, the pan-European stock index finished up 0.94% at 512.37, near its session high of 513.08.
  • The Eurozone Jan Sentix investor confidence index fell -0.2 to a 14-month low of -17.7, slightly stronger than expectations of -17.9.
  • The Eurozone Dec S&P composite PMI was revised upward by +0.1 to 49.6 from the previously reported 49.5.
  • German Dec CPI (EU harmonized) rose +0.7% m/m and +2.9% y/y, stronger than expectations of +0.5% m/m and +2.6% y/y with the +2.9% y/y gain the strongest year-on-year increase in 11 months.
  • In Japan, Dec Jibun Bank services PMI was revised downward by -0.5 to 50.9 from the previously reported 51.4.

This morning, Asian stock markets closed in the green.

  • China’s Shanghai Composite Index closed up +0.71%, and Japan’s Nikkei 225 Stock Index closed up +1.97%.
  • China’s Shanghai Composite Index closed higher, breaking a four-day losing streak amid improved market sentiment.
  • Semiconductor and technology stocks led the gains.
  • Mainland media Yicai reported that the People’s Bank of China plans to issue its largest-ever offshore yuan bills in Hong Kong this month in an effort to stabilize the currency.


Currency trading

The dollar index fell.

  • The Washington Post reported that President-elect Trump's aides are weighing a tariff program covering only critical imports.
  • Also, US economic news was weaker than expected.
  • In addition, the stock rally reduced liquidity demand for the dollar, weighing on the greenback.
  • However, hawkish comments from San Francisco Fed President Daly and Fed Governors Cook and Kugler were supportive of the dollar.
  • meantime, the EUR/USD rose.
  • The 10-year German bund yield jumped to a 2-month high after German December consumer prices rose more than expected.
  • Also, better-than-expected Eurozone economic news on the Dec S&P composite PMI and the Jan Sentix investor confidence index supported the euro.
  • On the other hand, the USD/JPY rose.
  • The yen initially moved higher based on hawkish comments from BOJ Governor Ueda, who said the BOJ would continue to raise interest rates if economic improvement continues.
  • However, the downward revision to the Japan Dec Jibun Bank services PMI was negative for the yen.

This morning, the dollar index fell 0.3% to near a one-week low at 107.97 , after dropping 0.55% in the previous session.

  • The euro and sterling extended gains from the previous session, each rising 0.3% to trade at $1.042 and $1.2558 respectively.
  • The Canadian dollar strengthened to 1.4305 per U.S. dollar, extending Monday's rally, after Canadian Prime Minister Justin Trudeau said he would step down in the coming months.
  • However, the dollar gained 0.09% against the yen, to reach 157.46 yen, and earlier rose as high as 158.425 yen for the first time since July 17.


Settlement Prices for Key Commodity, Index & Currencies

  • Chicago wheat Mar contract was up 11.2c/bu to 540.4c/bu;
  • Kansas wheat Mar contract was up 14.2c/bu to 553.2c/bu;
  • Minneapolis wheat Mar contract was up 14.4c/bu to 592.2c/bu;

  • MATIF wheat Mar was down €1.75/t to €231.25/t;

  • ASX wheat Mar contract was down A$2.8/t to A$327/t;
  • US DWI Cash (durum wheat index) was down 0.69c/bu to 646.97/bu;

  • 1CWAD (Canadian durum) avg spot price was not available. Available values were: NW SASK at C$316.01/t (+C$0.39/t); SW SASK at C$317.59/t (-C$0.26/t); SE SASK at C$319.81/t (-C$0.71/t).

  • EDW (EU durum) Mar contract was unchanged to €320.5/t;

  • Chicago corn Mar contract was up 7/bu to 457.6c/bu;

  • MATIF corn Mar was down €0.25/t to €209.75/t;

  • Chicago soybeans Mar was up 6c/bu to 997.6c/bu;
  • Winnipeg canola Mar contract was up C$1.8/t to C$625.8/t;

  • MATIF rapeseed Feb was up €3.5/t to €513.75/t;

  • Brent crude Mar was down US$0.21/barrel to $76.30;

  • WTI crude Feb was down US$0.40/barrel to $73.56;

  • BADI (Baltic Dry Index) was down 29 points to 1,043;

  • Dow Jones was down 25,57 points to 42.706,56;
  • S&P 500 was up 32.91 points to 5.975,38;
  • NASDAQ Composite was up 243,30 points to 19.864,98;
  • US dollar index (Mar '25) was down 0.697 points to 108.101;

  • AUD/USD firmer at US$0.6245;
  • USD/CAD weaker at $1.4332;
  • EUR/USD firmer at $1.0389;
  • USD/RUB weaker at ₽107.4992.


That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi


Source: Me, AAFC, ABARES, Abiove, AHDB, Amis, Argus Media, Baltic Exchange, Buenos Aires Grain Exchange, CFTC, CGC, China AgMin, Clear Grain Exchange, CME, Conab, Copernicus, CWG, ECB, ECMWF, EIA, Euronext, European Commission, Eurostat, FAO, FCI, FED, GASC, GIWA, ICE, IEA, IGC, IKAR, JRC MARS Bulletin, LSEG, MPOB, National Bureau of Statistics of China, ODC, OIAC, RBA, Reuters, Rosario Grain Exchange, Russia AgMin, Russian Grain Union, S&P Global, SovEcon, StatCan, USDA, UA AgMin, and Others ...


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