July 23, 2024 - Newswires

Corn, soybean and wheat prices all moved higher to start the week ...

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"While the 2024 harvest is advancing, depending on the activities keeping us busy in the field, the publication of this newsletter may vary or be cancelled. Therefore, we do not guarantee a daily release as usual. Thank you."

Good afternoon, Farmer Family ...

US farm markets moved higher on Monday.

Corn prices climbed 2.5%.

Soybeans rose 1.87%.

The rest of the soy complex also was in the green as soymeal moved 2.02% higher, and soyoil added 0.95%.

Wheat prices saw variable gains as Chicago SRW moved 0.97% higher, Kansas City HRW lifted 0.31%, and Minneapolis spring wheat bounced 2.13%

• Corn turned higher on short-covering and spillover strength from soybeans, as operators unwound short positions placed in anticipation of a possible second Trump presidency.
• The USDA confirmed U.S. exporters sold 133,000 metric tons of corn to Mexico for delivery in the 2024/25 marketing year.
• The rally in corn however was capped as forecasters are calling for near-ideal weather as the U.S. corn crop moves through its key reproductive phase.
• Also, Weekly Export Inspections data showed 970,539 MT in corn shipments throughout the week that ended on July 18.
• That was nearly triple the same week last year, but down 11.14% from the previous week.
• Accumulated exports for the marketing year have totaled 45.58 MMT, which is a 32.93% increase from the previous MY.
• Soybeans jumped on a flurry of short covering, as traders re-evaluated the U.S. political landscape after U.S. President Joe Biden abandoned his reelection bid on Sunday.
• Bean prices indeed had plummeted, in part because traders had anticipated a possible second Donald Trump presidency and a potential wave of new tariffs against China.
• But traders questioned Trump's election chances in November, as U.S. Vice President Kamala Harris received strong political support.
• Meantime, USDA’s Export Inspections report indicated a total of 327,061 MT shipments in the week that ended on July 18.
• That was a 4-week high and 13.3% larger than the same week last year.
• However, marketing year to date exports have totaled only 42.35 MMT, which is down 15.6% from the previous year.
• For wheat, prices turned higher on short-covering and uncertainty about crop prospects in Europe and the Black Sea region.
• Minneapolis spring wheat in particular was supported by market concerns about hot weather in Canada's crop belt.
• Market participants are awaiting the findings of the Wheat Quality Council's annual U.S. spring wheat tour this week.
• The tour will scout spring wheat fields in North Dakota on Tuesday and Wednesday, as well as some adjacent regions of South Dakota and Minnesota, before releasing a final assessment on Thursday.
• Meantime, the USDA reported export inspections of U.S. wheat in the latest week at 237,965 metric tons.
• That was well below the previous week and down 34.11% from the same week last year.
• However, exports for the marketing year have totaled 2.591 MMT in the first month and a half of the MY.
• That is a 20.22% increase from the same point last year.

In this context ...

Spot basis bids for soybeans were steady-to-weaker in the U.S. Midwest.

• Notably, corn basis bids were mixed.
• The basis fell by 3 cents a bushel at Blair, Nebraska, site of a large processing plant, but firmed by 3 cents at river elevators including Davenport, Iowa, and Morris, Illinois.
• The corn basis softened at Linden, Indiana, an ethanol plant.
• Soybean basis bids were mixed at crushing plants.
• The soybean basis fell by 5 cents a bushel at soy-crushing facilities in Decatur, Illinois, and Sioux City, Iowa, and by 3 cents at Davenport, Iowa, on the Mississippi River.
• The basis firmed by 10 cents a bushel at a Morristown, Indiana.
• Spot basis bids for hard red winter (HRW) wheat held steady in the southern U.S. Plains, underpinned by demand from domestic flour mills and slowing farmer grain sales as the winter wheat harvest rolled northward.
• Protein premiums for HRW wheat shipped by rail to or through Kansas City were unchanged.
• Commodity funds were net buyers in CBOT corn, soybeans, soymeal, soyoil, and wheat contratcts.

After the sessions close ...

The USDA released their Weekly Crop Progress and Conditions report.

• Notably, the USDA rated 67% of the nation's corn crop in good-to-excellent condition.
• That was down one percentage point.
• The report showed 61% of the US corn crop silking by Sunday, 5% faster than the average pace.
• There was also 17% reported in the dough stage, 6% ahead of normal.
• The USDA rated 68% of the U.S. soybean crop in good-to-excellent condition.
• NASS indicated 65% of the US bean crop blooming as of July 21, with 29% setting pods, both 5% ahead of normal progress.
• The ratings are still the highest for this time of year since 2020 for both corn and soybean crops.
• Meanwhile, the winter wheat harvest advanced more slowly than expected.
• The USDA estimated that the harvest was 76% complete as of Sunday.
• That was up from 71% last week, while analysts, on average, expected to see progress at 81% complete.
• The USDA rated 77% of the U.S. spring wheat crop as good to excellent, unchanged from last week, while analysts on average had expected a slight decline.
• As for the spring wheat crop, 89% was listed as headed.
• Conditions of the northern region crop were unchanged on the week at 67% good/excellent.
• The USDA said the winter wheat harvest was virtually complete in Texas, Oklahoma and top HRW wheat producer Kansas, but combines continued to roll across Colorado, Nebraska and South Dakota.

This morning ...

The most-active soybean contract on the Chicago Board of Trade (CBOT) was flat at $10.69 a bushel by 0449 GMT.

• CBOT corn slipped 0.4% to $4.13-1/4 a bushel, while wheat fell 0.2% to $5.46-3/4 a bushel.
• Speculators are betting heavily on lower prices, leaving the markets vulnerable to bouts of short-covering.

Canada

The Alberta Crop Report for the week ending 16 July noted high temps and limited rainfall impacted some crops across the province.

• The forecast for continued hot weather this week could also have more impact on crops that are in crucial reproductive stages.
• However, conditions are still seen to be above average.
• Spring Wheat is seen at 72.8% as good to excellent, Durum at 82.4%, Barley at 73.0%, Oats 69.7%, Canola 71.8%, and Dry Peas at 79.3% as good to excellent.
• Spring cereals are most advanced in the South and Central Region where they have just started flowering, while the other regions range between ½ and ¾ of heads emerged.
• Reports of pest pressures over threshold are below the historical provincial average, except for flea beetles.
• All regions are reporting some pressure from gophers.
• Meantime, Agriculture and Agri-Food Canada (AAFC) updated its 2023-24 and 2024-25 balance sheets based on information available as of July 15.
• For 2023-24, the outlook remained largely unchanged as the crop year for most crops closes at the end of July.
• Total supply for all principal field crops declined notably due to a significant decrease in western Canadian production as a result of drought in large portions of the Prairies.
• The reduction in supply combined with an increase in domestic use more than offset the decline in exports and led to carryout stocks (ending-year inventories) declining year-over-year. Prices for most principal field crops are projected to be significantly lower than last year, although pulses prices are expected to increase.
• For 2024-25, the outlook incorporates the most recent data from Statistics Canada’s June 27 acreage data.
• Total area seeded to principal field crops in Canada in 2024 is estimated to have decreased marginally from 2023, with increased area for pulses and special crops estimated to have offset reduced area seeded to wheat, oilseeds, and coarse grains.
• In Western Canada, growing conditions continued to improve throughout June, although drought continued in northwestern Alberta as observed in the Canadian Drought Monitor.
• Overall yield expectations have been increased from the June AAFC outlook, with yields increased for wheat, corn and for pulse and special crops, assuming normal weather conditions and timely rains for the remainder of the growing season.
• Prices for most principal field crops are forecast to decline year-over-year, in line with lower world values.
• According to provincial crop reports, the spring wheat crop is faring well with 90% rated in good to excellent condition in Saskatchewan and 79% in Alberta.
• As a result, yields are forecast at 3.6 MT per hectare, with production forecast at 29.1 MMT and total supplies at 31.6 MMT.

South America

Brazil

Brazilian farmers in the key center-south region had harvested 83% of their second corn crop for the 2024 cycle as of last Thursday, AgRural said.

• Work in the fields was well above the 47% seen a year earlier.

Europe

European grain markets rose.

• MATIF wheat Sep was up €2/t to €225.75/t, corn Aug was ended €1.25 higher to €221.25/t, while rapeseed jumped €7.25/t to €493.75/t.
• The harvest pace in France has been uneven, with thunderstorms over the weekend and a rainy spell expected also today.
• The start of harvesting in Germany and Poland has also been hampered by the rain.
• As a result, markets have been stressed by concerns of a poor 2024-25 European wheat crop.
• That pushed prices hingher in spite a lack of export competitiveness for western European origins.
• Corn, meantime, is benefiting from the repeated rains in France, although it is suffering from the drought and heatwave in the Balkans and the Black Sea basin.
• Rapeseed on its part soared in the wake of soybean and canola higher.
• Very hot and increasingly dry weather is setting in at the worst possible time in Canada.
• Meantime, European Union crop monitoring service MARS cut most of its forecasts for average grain yields in the EU this year, with the sharpest drop for maize and sunflower which suffered from hot and dry weather in the southeastern part of the bloc.
• Grain and oilseed crops have faced adverse yet contrasting weather this year with excessive rainfall in the north hurting winter cereals, notably wheat which is on track for its smallest crop since 2020, and drought in the south hurting summer crops.
• MARS now expects the maize yield at 7.24 metric tons per hectare (t/ha).
• For sunflower, it cut its yield estimate by 5% from last month, now stable on 2023 at 2.09 t/ha.
• An exception to the overall mediocre yield outlook was spring barley for which MARS raised its yield forecast by 1% to 4.44 t/ha.
• In contrast it sharply cut the yield estimate for winter barley to 5.76 t/ha from 5.96 t/ha, now 4% below 2023, due to excessive rainfall.
• It also cut the rapeseed yield this year to 3.10 t/ha.
• For soft wheat MARS kept its yield estimate nearly unchanged at 5.87 t/ha.
• For sugar beet, the EU yield was projected at 73.4 t/ha.
• Meantime, the European Commission has proposed setting provisional tariffs of between 12.8pc and 36.4pc on Chinese biodiesel imports after finding it is being sold in EU markets at unfairly low prices.
• They are due to be imposed in mid-August, with investigations to continue until February, when definitive duties for 5 years could be set.

Russia

Russia started harvesting several weeks before than usual due to weather conditions.

• As of July 12 Russian farmers had harvested 32.0 million tons of grain, from 8.4 million hectares.
• The average yield was 3.80 tons per hectare.
• The wheat harvest totalled 27.4 million tons, from 7.0 million hectares.
• The average yield has been 3.94 tons per hectare so far.
• On the weather side, temperatures are predicted to be normal or colder in the Volga Valley and the Urals, and rain in the Volga could be very beneficial both for sunflower and corn.
• However, the government of another region - Zabaikalye - announced the introduction of a state of emergency in four districts due to drought.
• Temperatures are predicted to be hotter than normal in the south, the southern Volga, and the southern centre, while around normal or higher in Siberia.
• In this context, IKAR cut its forecast for the 2024 grain harvest to 128 million tons, though maintained its wheat crop forecast unchanged.
• Conversely, Sovecon had revised up its forecast for Russia's 2024 grain crop to 130.5 million tonnes.
• Sovecon also said it saw the 2024 wheat crop at 84.2 million tonnes.
• Meantime, per latest port data, Russian grain exports increased to 0.71 million tons last week.
• Shipments included 0.66 million tons of wheat.
• On this wake, Sovecon raised its wheat export forecast for July by 0.1 million tons to 2.9 million tons.
• According to the IKAR grain exports for the season 2024/25 will reach 55 million tons.
• As a result, Russian wheat export prices remained substantially unchanged last week, as shipment volumes continued to be weaker and farmers are not in a hurry to sell at current low levels.
• According to the IKAR, the price of 12.5% protein Russian new crop wheat scheduled free-on-board (FOB) with delivery in late August was $219 per metric ton at the end of last week.
• According to "Rusagrotrans" export prices for Russian wheat (12.5% protein) with delivery in July-August decreased by $2, reaching $217 per ton (FOB).
• Sovecon put the price of wheat with a protein content of 12.5% for the nearest delivery at $220-$222 per ton at the end of last week, slightly above $219-$222 per ton FOB a week before.
• According to "Rusagrotrans," prices for grade 4 wheat (12.5% protein) in deep-water ports fell by 50 rubles from the previous week, amounting to 15,300-15,500 rubles per ton (excluding VAT).
• In shallow water ports, prices increased by 700 rubles, reaching 14,500 rubles per ton.
• In the domestic market, wheat prices declined in the Central Federal District over the week and remained close to the previous week's levels in other regions.
• Specifically, the price for domestic 3rd class wheat, European part of Russia, excludes delivery was at 13,725 rbls/t, -250 rbls/t (Sovecon).
• Prices for grade 4 wheat (12.5% protein, EXW elevator) in the south were at 13,200-13,500 rubles per ton (excluding VAT), and in the Volga region, they were at 12,900-13,000 rubles per ton.
• In central Russia, due to the active arrival of new harvest grain, processors' demand prices decreased to 12,500-13,300 rubles per ton, which is 1,700 rubles lower than the previous week.
• In Siberia, prices for grade 4 wheat remained at 11,800-12,700 rubles per ton (EXW elevator).

• For the other products, prices for sunflower seeds were at 31,375 rbls/t, -325 rbls/t (Sovecon).
• The price for domestic sunflower oil was at 77,350 rbls/t, 0 rbls/t (Sovecon).
• The price for domestic soybeans was at 40,400 rbls/t, +100 rbls/t (Sovecon).
• Export prices for sunflower oil were at $895/t, -$10 (IKAR).
• The price for white sugar, Russia's south was at $686.16/t, -$1.42/t (IKAR).

China

China's central bank cut two key interest rates by 10 basis points, moving to ease credit and pep up the economy, following a major policymaking meeting of the ruling Communist Party that focused on longer-term reforms.

• The People's Bank of China also reduced collateral required by its medium-term lending facility and also reduced the interest rate for its standing lending facility by 10 basis points to 2.7% for its seven-day loans and 3.05% for its one-month loans.
• However, the recent moves so far have not boosted markets in a mood for more aggressive short-term action to rev up the slowing economy.

Southeast Asia

Malaysia

Malaysian palm oil prices ended higher, extending gains to a fifth consecutive session on the back of good demand and data showing a surge in July exports.

• Notably, the benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange climbed 0.68%, hitting its highest closing since July 5.
• Exports of Malaysian palm oil products for July 1-20 jumped between 39.2% and 41.4% from the same period in June, cargo surveyors said.
• SGS estimates exports of Malaysian palm oil products for July 1-20at 978,387 metric tons, from 737,717 metric tons shipped during June 1-20, according to LSEG.
• Meanwhile, Dalian's most-active soyoil contract gained 0.65%, while its palm oil contract rose 0.4%.

Australia

There was a firmer tone to cereal markets to start the week.

• Victorian values firmed A$3-$5/t on current crop while new crop was slightly higher with the ASX Jan 25 contract ending the day up $3/t at $343/t despite a heavy NNSW crop on the way.
• Canola values were also firmer, following the offshore moves closely.
• Basis has been resilient which suggests that the grower is not hitting the bid side very hard.
• The current 8-day forecast is looking pretty good for WA with the Southwest, Midland, and Lower Great Southern regions expecting 50-100mm closer to the coast and 15-25mm further inland.
• In SA, the Western and Lower Eyre Peninsula may see 10-25mm, while YP and the Mid North will hopefully receive another 10mm.
• In Victoria, the Western Districts look set to receive another 10-25mm, while the Wimmera has only 5-10mm.
• In NSW a band, stretching from the Murrumbidgee to the Northern region, is expected to bring isolated showers, while Qld is looking at a relatively dry week.

International grain and oilseed tenders & trade

• An importer group in the Philippines has issued an international tender to buy up to 240,000 metric tons of animal feed corn. The deadline for submission of price offers in the tender is believed to be Wednesday, July 24. Arrival in the Philippines was sought in four consignments. One 70,000 ton consignment was sought for arrival between Oct. 16-31, one of 60,000 tons for between Nov. 1-15, one of 60,000 tons for between Dec. 16-30 and another of 50,000 tons also for Dec. 16-30 arrival. It is possible that not all consignments will be purchased.

Outside markets ...

Energy markets

Oil prices fell for a second consecutive session, hitting their lowest level in over a month.

• Brent crude futures fell 0.28%, hitting the lowest level since June 11.
• U.S. West Texas Intermediate crude futures fell 0.31%.
• Investors looked past U.S. President Joe Biden's decision to end his reelection bid and focused on rising stockpiles and signs of weak demand.
• Morgan Stanley analysts said were likely to balance out by the fourth quarter and rise to a supply surplus by next year.
• According to StoneX, global petroleum inventories rose last week.
• Meantime, in the Middle East, Israeli fighter jets struck Houthi military targets near Yemen's Hodeidah port on Saturday.
• Israel also sent tanks back into the greater Khan Younis area of Gaza.
• Elsewhere, China surprised markets by lowering a key short-term policy interest rate and benchmark lending rates to boost its economy, but the move failed to support oil prices.

This morning, oil prices steadied.

• Brent crude futures for September rose 11 cents to $82.51 a barrel by 0645 GMT.
• U.S. West Texas Intermediate crude for September climbed 5 cents to $78.45 per barrel.
• Investors remained cautious amid expectations of plentiful supplies and weak demand.
• The American Petroleum Institute is due to release its estimates for last week's oil inventories later in the day, while official U.S. government data is scheduled to land on Wednesday.
• The market is also watching developments in Russia, after the Tuapse oil refinery was damaged in a major Ukrainian drone attack that sparked a fire.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London closed down, as the rates for capesize and panamax vessels fell.

• Notably, the overall index lost 0.3%.
• The capesize index fell 0.5%.
• The panamax index was down 0.1%, posting its first daily percentage loss since July 8.
• The supramax index closed unchanged.

Equity markets

U.S. stock indexes rallied.

• The Dow Jones Industrial Average added 0.3%, the S&P 500 rose 1.1%, breaking a three-day losing streak, while the Nasdaq composite climbed 1.6%.
• Nvidia rose 4.8%, and other Big Tech stocks advanced.
• Alphabet rose 2.3% and Tesla gained 5.1%.
• Companies recovered from last Friday’s major IT outage.
• China unexpectedly cut rates by -10 bp.
• However, US political uncertainty rose after President Biden on Sunday dropped out of the presidential race.
• Meanwhile the 10-year T-note yield rose by +1.6 bp to 4.255%, undercutting stocks.
• In Europe, the Euro Stoxx 50 recovered from last Friday’s 5-week low and closed up +1.45%.
• China's Shanghai Composite closed down -0.61%.
• Japan's Nikkei Stock 225 Index closed down -1.16%.

This morning, shares were mixed in Asia.

• Tokyo's Nikkei 225 closed down 0.01%.
• Chinese markets declined, with the Hang Seng in Hong Kong down 0.9%, while the Shanghai Composite index shed 1.7%.
• South Korea's Kospi advanced 0.4%, while the S&P/ASX 200 jumped 0.5%.
• Taiwan's Taiex surged 2.8%, in Bangkok, the SET fell 1%.

Currency trading

The dollar index fell slightly.

• The dollar initially moved higher taking support from a rise in the 10-year T-note yield.
• The dollar also received some support after China unexpectedly cut its short-term policy rates by -10 bp to 1.7%.
• However, the dollar was undercut by US political uncertainty.
• Also, a rally in socks reduced the liquidity demand for the dollar.
• Meantime, the EUR/USD rose slightly, although the euro continued to be undercut by perceptions of a weaker outlook for the euro’s interest rate differentials versus the dollar after ECB President Lagarde last week warned of downside risks for the Eurozone economy.
• On the other hand, the USD/JPY fell, as the yen continued to see support from fears of another round of BOJ intervention to support the yen.

This morning, the U.S. dollar was relatively steady, falling to 156.49 Japanese yen early Tuesday from 157.04 yen late Monday. The euro fell to $1.0878 from $1.0891.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat Sep contract was up 5.2c/bu to 548c/bu;
• Kansas wheat Sep contract was up 1.6c/bu to 571.6c/bu;
• Minneapolis wheat Sep contract was up 13c/bu to 622.6c/bu;

• MATIF wheat Sep was up €2/t to €225.75/t;

• ASX wheat Sep contract was down A$7.3/t to A$339/t;

• US DWI Cash (durum wheat index) was up 1.05c/bu to 632.50c/bu;

• 1CWAD (Canadian durum) avg spot price was down C$0.24/t to C$308.63/t.
• EDW (EU durum) Sep contract was unchanged to €312/t;

• Chicago corn Sep contract was up 9.6/bu to 400.2c/bu;

• MATIF corn Aug was up €1.25/t to €221.25/t;

• Chicago soybeans Aug was up 20.4c/bu to 1117.6c/bu;

• Winnipeg canola Nov contract was up C$26.9/t to C$673.1/t;

• MATIF rapeseed Aug was up €7.25/t to €493.75/t;

• Brent crude Sep was down US$0.23/barrel to $82.40;

• WTI crude Sep was down US$0.24/barrel to $78.40;

• BADI (Baltic Dry Index) was down 6 points to 1.896;

• Dow Jones was up 127,91 points to 40.415,44;
• S&P 500 was up 59,41 points to 5.564,41;
• NASDAQ Composite was up 280,63 points to 18.007,57;

• US dollar index (Sep '24) was down 0.075 points to 104.037;

• AUD/USD weaker at US$0.6642;
• USD/CAD firmer at $1.3757;
• EUR/USD firmer at $1.0891;
• USD/RUB firmer at ₽87.8481.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

Source: Me, AAFC, ABARES, Abiove, AHDB, Amis, Baltic Exchange, Buenos Aires Grain Exchange, CFTC, CGC, China AgMin, Clear Grain Exchang, CME, Conab, Copernicus, CWG, ECB, ECMWF, EIA, Euronext, European Commission, Eurostat, FAO, FCI, FED, GASC, GIWA, ICE, IEA, IGC, IKAR, JRC MARS Bulletin, 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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