Author Archives: GW Commodities

StoneX (not sure which Merchant) delivered 25 contracts to SG Americas (assumed Viterra)

Open interest at 1200 contracts

 

Wheat’s weakness is tied to the unchanging situation in the Black Sea and what appears to be an improving weather picture for Winter Wheat in the S/SW Plains

Also talk about the EU being close to reaching a deal with Ukraine’s 5 neighboring countries to export grain added to weakness

Although US SRW is the cheapest FOB Offer, US HRW is still overpriced

A Ukrainian source said Black Sea grain export talks are set for tomorrow, with all parties reportedly involved; however, Russia’s foreign ministry replied that they had no information about such a meeting.

A senior Ukraine Ag Ministry official said 2023/24 (July-June) grain exports could fall to around 26 MMT, only around half this season’s levels, with the harvest seen at 44 MMT, down from 53 MMT in 2022 (and a record 86 MMT in 2021).  They did leave output unchanged for ‘23/24 despite poor weather, and around a 10% reduction in corn acreage compared to initial estimates.

March USDA total soybean crush came in at 198.0 million bushels, up from 173.9 mbu in Feb, the 197.3 mbu trade estimate, and 192.9 mbu last March.  It is a record for the month, behind only 198.2 mbu in Dec 2021 as the highest ever for any month of the year.

Corn used for ethanol of 438 mln bu was up from 400 mln last month but below 453 mln a year ago. DDGs produced were 1.703 million short tons, up from 1.561 mln in Feb but below 1.877 mln LY.

US corn planting progress rose from 14% to 26% this week, double last year’s pace and right in line with the five year average; corn emergence doubled from 3% to 6%, up from 3% LY and the 5% 5YA.

Soybean planting rose ten points to 19%, up from 7% LY and the 11% 5YA.

Spring wheat planting rose from 5% to 12% done, down from 18% LY and the 22% 5YA, with emergence there at 2%, up from 1% last week but behind 5% LY and the 6% 5YA.

Winter wheat heading rose from 18% to 25% as of Sunday night, up from 21% LY and the 23% 5YA.

Winter wheat ratings rose two points this week to 28% good/excellent, up from 27% LY but below the 45% 5YA.

Jordan is seeking 120k tonnes of optional origin milling wheat today, with no results yet reported but seven trading companies making offers.

Egypt’s GASC is seeking wheat in an international tender closing today, for shipment dates between June 10 and July 20, FOB Offers below

Mpls wheat -3

KC wheat -3

Chic wheat -5

Matif wheat -7

Canola +10

Rapeseed +4

Soybeans +8

Soybean oil +59

Crude -95

Corn -1

CAD -28

In a surprise move, UN suggested World should accede to Russia request to be allowed back to access to Swift and drop sanctions against Banks that finance Russia exports.  Still, G7 suggested ban on Russian exports.  Russia said that would guarantee end of Ukraine export corridor deal.

Agricultural markets were mixed as prices appear to be seeking levels that attract slumping export demand.

Time will tell if the expected rains are able to salvage much of a HRW wheat crop.  Forecast for much of the Midwest are shifting to a cooler/drier pattern into early May.

The macro mood is bearish; Crude Oil, CNY, and BRL lost ground last week.  Lower Brazil FOB cash offers are undercutting U.S. Corn and Soybean prices.  Better U.S. Plains forecasts and cheap Black Sea flows are bearish for Wheat.

 

Last week, Chic July traded to lowest level in 23 months, slow export demand and lower Russia and EU prices offers resistance.

Cold US south plains weekend temps is offering support to futures overnight, It will take a few days to access the extent of damage to US HRW crop.

US north plains and western Canada remains wet and cold

 

The market still seems confident that North American corn and soybean crops will get planted in a timely enough fashion, even though May is approaching quickly.  Forecasts remain cold but dry enough going forward for fieldwork to pick up.

Shipping data late last week showed a total of almost 80k tonnes of Brazilian soybeans set to leave for U.S. ports in the next week, in two separate cargoes.

Ukraine’s Ag Ministry reported cumulative grain exports at 40.7 MMT, down from 45.7 MMT on the comparable date last year, and including 13.9 MMT of wheat, 24.0 MMT of corn, and 2.4 MMT of barley.  Grain exports in April so far stand at 2.8 MMT.

The head of the Russian grain union sees record grain exports this season of around 60 MMT, including 50 MMT of wheat.

 

Mpls wheat +4

KC wheat -1

Chic wheat +0

Matif wheat +0

Canola -1

Rapeseed +3

Soybeans +1

Soybean oil -11

Crude -33

Corn -6

CAD +7

Poland and Ukraine have worked out a deal to allow sealed transits of Ukraine grain through Poland.

Russia’s Prime Minister Lavrov will meet with the UN chief next week on and extension of the Black Sea corridor agreement.

 

While CBOT held steady overnight, both KC and MGEX were marginally lower after impressive rallies the past few days.

Matif extended its gains to a 3rd consecutive session due to uncertainty over the grain corridor as passage for ships carrying Ukraine grain remained suspended for the 2nd day.

Asian consumers remain hand to mouth with feed consumers switching more and more to corn as the discount to wheat grows.

 

Wheat is continuing to see long liquidation and may be some new selling.

US 8-10 day weather forecast keeps adding needed moisture into US south plains especially KS and NE while SW part of US HRW acres should remain dry.

There is talk that HRW crop could be down 50-75 mil bu from early estimates.

US flour makers continue to talk about blending HRS and SRW to replace lower HRW supply

Lower Russia export prices continue to offer resistance to US futures.

World 2023/24 Major exporter wheat stocks to use ratio could drop to a new recent low near 12% vs 2009/10 high was near 23%

 

Spec money is flowing out of the grain complex this morning with the trade continuing to weigh the Black Sea situation

It is just another day as Ukraine reports the resumption of exports from its ports while Russian officials accuse Ukraine of sabotaging the deal by bribing ship owners

As the news hits the headlines, the Funds offer the market down until there are limited bids

Jordan bought 50k tonnes of optional origin hard milling wheat in an international tender yesterday morning, at $303/tonne C&F for late Oct shipment; they issued another international tender for up to 120k tonnes of optional origin milling wheat for Oct-Nov, and they have three companies taking part in their tender for up to 120k tonnes of feed barley as well.

South Korea’s NOFI bought 60k tonnes of South American soybean meal this morning at $554/tonne C&F for June-July shipment.

SovEcon yesterday raised their 2023 Russian wheat production estimate, from 85.3 last month to 86.8 MMT currently.

Ukraine’s Ag Ministry is estimating 2023 grain production at 50 MMT given favorable weather, down from 53.0 MMT in 2022 due to reduced plantings; that compares to a record 86 MMT harvest in 2021.

The Czech Republic estimated that the country has 40% more grain in stock than a year ago, or 2.6 MMT, with Ukrainian exports replacing Czech supplies in some markets.  Wheat stocks stand at 1.6 MMT, vs 1 MMT last year.

German farm cooperatives are estimating the country’s 2023 wheat crop at 22.15 MMT, up from 22.01 MMT in March but still down 1.6% YoY.

 

Mpls wheat -9

KC wheat -14

Chic wheat -10

Matif wheat -6

Canola -2

Rapeseed -9

Soybeans -5

Soybean oil -51

Crude -131

Corn -4

CAD -22

US wheat rallies on continuing HRW drought

US wheat futures hit breaking on Friday night and rallied 4% on the July KC contract, taking back all of the 3 previous sessions losses.  Mpls July finish +26.75c and Chic July +15.50c.

Kansas, which accounts for 25% of US winter wheat production is currently suffering drought/dry conditions in 88% of the state.  Across the US, around 49% of winter wheat cropping areas are experiencing drought.

Hungary has joined Poland in banning duty free agricultural imports from Ukraine following protests by farmers who stated it was undercutting their own industry.

The UN has written to Russia, Ukraine and Turkey raising concerns over the implementation of the grain corridor with inbound vessel inspections becoming less efficient.

 

Wheat futures are lower led by KC and MLS.  Could be some profit taking on long KC vs short Chicago.

There were some rains in E KS.  Western US HRW crop areas are still dry.

EU refused Poland and Hungary ban on Ukraine grain imports.

Large EU and Russia supply offers resistance to World wheat prices.

 

There remains plenty of time to plant, even with colder outlooks now through the month of April.

The wheat market seems a bit tired of the Black Sea grain deal rhetoric, but plenty of issues remain here in the U.S. with the winter crop in rough shape and spring wheat planting prospects off to a slow start, eut Every year we are surprised on how fast the farmer can put the crop in.

Russia is blocking inspections of ships in Turkish waters, under the Black Sea grain export deal, causing Ukraine officials to say the agreement is “at risk of being shut down”; Ukraine is looking to re-open grain movement through Poland after some neighboring countries (including Hungary and potentially Slovakia as well) have banned imports to protect their local markets.

Egypt has started offering corn on the country’s new commodities exchange, after the GASC has sold nearly 570k tonnes of wheat to local miller as well, since the launch of the exchange in November. Egypt’s GASC is also seeking vegetable oils in a tender closing Wednesday, for May-June arrival.

 

Mpls wheat -4

KC wheat -5

Chic wheat +3

Matif wheat +3

Canola +10

Rapeseed +6

Soybeans +7

Soybean oil +58

Crude -53

Corn +0

CAD -18