Author Archives: GW Commodities

As the Indian export ban played out…

As the Indian export ban played out in real time on Monday’s opening, wheat markets went berserk. CBOT, KC and MGEX all finished lock limit up, front month Matif( finished +€21.75 at an all-time high of €438.25/mt and front month ASX finished +$8.00 at an all-time high of $483.00/mt.
Many anecdotal reports of how the ban will play out have surfaced on the twittersphere with Egypt allegedly already buying 500k at $400/mt CFR from the G2G channel. Some government figures have said India will honour all contracts, while there are reports of up to 1.8mmt of wheat trapped at the port unable to be exported.
Pakistan’s TCP is holding a wheat tender next Wednesday 25 May for 500k (they always take more). Suppliers are being told to offer a minimum of 100k.
The US crop progress report revealed winter wheat crop conditions deteriorated with the G/E rating at 27%. Spring wheat planting remains slow, now at 39% compared to 27% LW although was below expectations of 43%.

India Commerce Ministry says:
Have announced relaxation to the May 13 DGFT order which restricted wheat exports
Relaxation applies to consignments handed over to Customs on or before May 13
Wheat consignment headed for Egypt already under loading at the Kandla port
Egyptian govt had requested permission for wheat cargo being loaded at Kandla port

Wheat popped higher last night after its limit session yesterday but it’s been downhill since, with the spot Chi July contract falling almost 75 cents from evening highs to test the $12/bu mark and nearly fill the weekend gap.
India’s indecisiveness has added a whole new element to an already volatile market.
U.S. corn and bean planting is picking up through mid-month
Japan is seeking 175k tonnes of milling wheat in their regular weekly tender, including 60k from the U.S., 91k from Canada, and 24k from Australia.
India will allow the export of both wheat shipments already awaiting customs clearance, and exports to Egypt
They reportedly have 1.8 MMT of wheat trapped in ports following the earlier export ban announcement, and 4.3 MMT total sold for exports out of their initial 10 MMT target. India did make official a 500k tonne sale to Egypt’s state government that was floated earlier.
Trade sources said around 300k tonnes of Ukrainian wheat bought by Egypt for Feb-March delivery is still either waiting to be loaded or stuck in ports.

Mpls wheat -11
KC wheat -22
Chic wheat -14
Matif wheat -5
Canola +14
Rapeseed -2
Soybeans +5
Soybean oil +1
Crude +20
Corn -2
CAD -3

Double digit gains across the board for US wheat futures

Double digit gains across the board for US wheat futures with July CBOT +20.25c, KC +25.50c and MGEX once again leading the way due to delayed plantings +42.50c.
The close put CBOT once again over $11/bu and KC over $12/bu and closer to the multi-year high of $12.59 set back in March.
Matif has closed back above €400/mt due to concerns in the region over tightening wheat supplies.
The May WASDE today has analysts and pundits alike putting forth their best estimates.
Estimates averages for wheat:
US ending stocks 2021/22 – 686mbu (+10mbu from April WASDE)
US ending stocks 2022/23 – 659mbu
Global ending stocks 2021/22 – 278.30mmt (-120kmt from April WASDE)
Global ending stocks 2022/23 – 272.07mmt
Cash FOB markets have been stable this week. WA APW FOB remains steady around $420-425/mt for Aug/Sep. Indian wheat remains the most competitive origin with FOB at $350-355/mt for June/July.

Corn dominated trade volume overnight and has surged back to the high side in the early morning hours, plenty edgy ahead of the May USDA, even with U.S. planting rolling in rapid fashion for most this week.
Taiwan’s MFIG has tendered for 65k tonnes of corn for Aug-Sept shipment.
Algeria started to buy optional-origin milling wheat yesterday at $466/tonne C&F, with volumes initially estimated at 180-300k tonnes for June-July.
Jordan bought 60k tonnes of optional-origin milling wheat in a tender yester-day morning, at $436/tonne C&F for shipment during the second half of June.
India is sending trade delegations to nine countries in an attempt to boost wheat exports; they are looking for a record 10 MMT of exports in 2022/23.
Strategie Grains cut their 2021/22 (July-June) E.U. soft wheat export estimate from 31.4 to 29.9 MMT this month due to strong Russian shipments, though they did raise 2022/23 exports from 30.3 to 30.8 MMT. ‘22/23 wheat output fell from 126.7 to 126.2 MMT, down from 130.3 MMT in ‘21/22, with corn production up from 66.3 to 66.7 MMT this coming season.
China’s Ag Ministry is looking for nearly a 2% decline in corn acreage in 2022, with soybeans up over 18% year-over-year. Soybean imports were pegged at 95.2 MMT for 2022/23, up 2.4% from the previous season.
The Rosario Grains Exchange yesterday estimated the 2022/23 Argentine wheat harvest at 19 MMT, down from 22.1 MMT last season.

Mpls wheat +1
KC wheat -4
Chic wheat -3
Matif wheat +2
Canola -16
Rapeseed -12
Soybeans -13
Soybean oil -129
Crude +20
Corn -1
CAD -13

Overnight grain volumes remain slow

There were no deliveries against the May canola futures contract yesterday, open interest is 557 contracts, yesterday’s open interest at 59 was a reporting error
Even though and Indian Food Industry official denied the rumours of halting exports, the wheat market continued to rally due to extreme heat hurting India’s new crop production and the ongoing infrastructure damage in Ukraine.
Dry wheat areas in the HRW belt are forecast for moisture followed up with above normal temps

Overnight grain volume remained slow and was fairly evenly split across the grain complex, with wheat still leading gains on global S&D uncertainty.
Corn and soybeans are more than willing to follow with U.S. spring planting windows still few and far between, though better into next week
India expects a 5% decline in wheat production this year due to a severe heat wave, but they are “not planning on putting restrictions on wheat exports”. They have finalized contracts to ship 10 MMT of wheat since the war began. Total output is seen at 105 MMT, down from 111 MMT forecast in February.
Ukraine accused Russia yesterday of stealing 400,000 tonnes of grain from occupied southern and southeastern crop areas, believed to account for around one third of all grain reserves in those regions. Around 4.5 MMT of grain is estimated to be sitting in closed Ukrainian port facilities. The country’s deputy agriculture minister said they still have enough domestic stocks to feed its own population, as well as enough fuel and fertilizer for farmers this spring, and exports are expected to pick up further this month.
Private consultancy Agrinvest Commodities yesterday estimated a 1.5% increase in Brazilian soybean plantings next season, after 40.8 million hectares (100.8 mln acres) represented a 4.1% expansion in the current 2021/22 year.
Argentine farmers have sold 23.7 MMT of the ‘21/22 corn crop thus far, including 1.1 MMT this past week; versus 1.9 MMT on the same week last year

Mpls wheat +13
KC wheat +28
Chic wheat +24
Matif wheat +7
Canola +5
Rapeseed +10
Soybeans +13
Soybean oil -23
Crude +264
Corn +5
CAD -5

Mixed wheat close yesterday with Mpls higher…

Mixed wheat close yesterday with Mpls higher on seeding issues while KC and Chic lower with decent moisture in the winter wheat areas
Russia continuing to cause havoc with infrastructure damage and grain / equipment theft
Heavy deliveries against the Chic may wheat contract
There were no deliveries against the May canola contract yesterday, open interest is down to 557 contracts

Germany has announced plans to cut the use of biofuels produced from food and feed crops because of rising food costs.
Overnight volume was less than impressive, with corn taking the majority and holding on to its rebound this morning due to slow U.S. planting and more widespread rains in the forecast at least through this week.
South Korean millers tendered for 50k tonnes of U.S. milling wheat, for shipment between the middle of June and the middle of July.
APK-Inform is forecasting a “significant shortage” in Ukrainian grain storage for 2022/23 due to the reduction in exports, estimating ending stocks this season at a record 21.3 MMT of grains and oilseeds (more than four times LY).
StoneX Brazil yesterday raised their 2021/22 soybean production estimate from 122.0 to 123.4 million tonnes; still down from 135.8 MMT last season. First crop corn production rose from 25.0 to 26.3 MMT, now above 25.8 MMT LY, with second crop output seen at 88.1 MMT, down from 91.9 MMT last month but still well above 59.2 MMT last season. Total corn production of 116.5 MMT is down 2.5 MMT MoM but above 86.6 MMT LY.
US corn planting progress doubled to 14% complete this week, still behind 42% last year and the 33% five year average pace. Emergence rose only from 2% to 3% this week, down from 7% LY and the 6% 5YA.
Soybean planting advanced from 3% to 8% done, behind 22% LY and the 13% 5YA
Spring wheat planting up from 13% to 19% this week, down from 46% LY and the 28% 5YA. Spring wheat emergence rose from 2% to 5% as of Sunday night, behind 13% LY and the 7% 5YA pace. Winter wheat heading went from 11% to 23% this week, behind 26% LY and the 29% 5YA, with condition ratings unchanged at 27% g/ex, vs 49% LY and the 51% 5YA.

Mpls wheat +5
KC wheat +12
Chic wheat +6
Matif wheat +3
Canola -9
Rapeseed -3
Soybeans +7
Soybean oil +55
Crude -208
Corn +5
CAD +31

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