Author Archives: GW Commodities

No deliveries against the March canola contract yesterday, open interest is unchanged at 3,283 contracts, volume light at 15 contracts in the Mar/May spread, down 5/mt to +25

Chic may wheat is trying to find support near 7.00, Kansas May 8.20.  Wheat futures are trying to correct an oversold tech picture with Managed funds near record short.  Talk of rain in east US HRW states offers resistance.  Iran bought Russia wheat also offers resistance.

Some new concern about persistent dryness in western Canada.  Also, in El Nino years Australia tends to have lower production.

Trade estimates US 2023/24 wheat carryout near 573 mil bu vs USDA 568.  Trade estimates World 2023/24 wheat carryout near 269 mmt vs 276 ly.

 

Canola was mixed overnight after yesterday saw New crop November trade up on higher overnight volume, likely overseas related tied to Tuesday’s month end price plunge and strength in allied markets

New crop demand interest carried over into the day session before thinning out during the latter half of the trade.

The market believes that canola strength should be met by better, more consistent commercial hedges as producers become more willing sellers of seed ahead of spring fieldwork/seeding

 

Overnight volume indicates that the grains are ready to limp into the end of the week, but soybeans and soybean meal remain the buoys, as feed grain demand suffers and the trade expects stocks increases there next Wednesday.

Taiwan’s MFIG issued an international tender for 65k tonnes of feed corn.

The Buenos Aires Grains Exchange yesterday said they “plan” to cut their 2022/23 Argentine soybean crop estimate for the fourth time, but did not give any exact figures; their estimate remains at 33.5 MMT, down from an initial 48.0 MMT projection and 43.3 MMT last year.  They also noted potential further cuts to corn output, currently at 41 MMT versus 50 MMT initially.

Ukraine’s Ag Ministry “sees no need” to limit wheat exports in the 2023/24 (July-June) marketing year, with planted acreage seen larger than previously thought, and production expected in the 16-18 MMT range, down from 20.2 MMT last season.  The country has exported 11.3 MMT so far in 2022/23, down from a final 18.1 MMT figure in 2021/22.

 

Mpls wheat +2

KC wheat +5

Chic wheat +2

Matif wheat +1

Canola +3

Rapeseed +3

Soybeans +6

Soybean oil -36

Crude -52

Corn +3

CAD -14

Wheat futures have dropped to lowest level since Sep 2021.  Most of the drop due to lower demand for US exports and lower Russia export prices.

Turkey bought Russia wheat near $285 fob.

Wheat futures are oversold with Managed funds short 100,000 contracts.

 

Canola recovered higher overnight  after a weaker day yesterday in sympathy with losses in the soybean complex and Euronext rapeseed, especially after canola held independent strength on Monday on rumors that China had bought at least one cargo of canola.

 

Taiwan bought 50k tonnes of U.S. milling wheat, of various types for April-May shipment from the PNW, at $306-368/tonne C&F.

Thailand importers bought 30k tonnes of feed wheat from Australia, at $336 per tonne C&F for May shipment.

Ukraine continues to appeal to the United Nations and Turkey to start negotiations on extending the grain export agreement; the country’s grain traders union today asked the government to provide transparent rules on how cargo ships should line up before loading at Black Sea ports.

Ukraine’s Ag Min reported Feb grain exports at 5.2 MMT, up from 5.05 MM last year; exports since July 1 stand at 32.3 MMT, now 26% behind LY.

Algeria’s President said the country “must double” wheat production by raising yields by 50%; they produced 3.5 MMT in 2022, and import around 9 MMT per season at an estimated cost of $2.8 billion.

European Commission data showed cumulative soft wheat exports since July 1 at 20.47 MMT, up from 19.10 MMT over the same span last year; ‘22/23 corn imports stand at 17.95 MMT, up from 11.18 MMT last season.

Brazilian grain association Anec yesterday estimated February soybean exports at 7.77 MMT, down from 8.3 MMT seen last week; corn exports of 1.949 MMT are down from last week’s 1.99 MMT estimate, with wheat down from 670k tonnes last week to 549k tonnes this week.

 

Mpls wheat +1

KC wheat +0

Chic wheat +0

Matif wheat -4

Canola +6

Rapeseed +3

Soybeans +8

Soybean oil +59

Crude -34

Corn -1

CAD -1

Wheat tanks following China peace plan

CBOT wheat futures were sold off 4% on Friday as China’s 12-point peace plan for ending the war in Ukraine included support for the grain corridor extension.  Chia buys plenty of Ukraine corn.

US wheat export sales for the week came in at 338k which was up 62% WoW however still within market expectations.

In cash markets, APW1 CFR offers in Asia were fairly flat around $360 for Apr/May.  ASW1 high $330s and ASW9 high $340s.  We could see more Black Sea offers in the market this week following the support given by China.

India has started harvesting their record wheat crop (estimated 112.2MMT) earlier than normal due to dry conditions and above normal temps in key wheat producing states.

 

Corn took the largest share of volume overnight but is holding the closest to unchanged throughout its complex this morning; it’s still matching two-plus month lows following the USDA Ag Forum.

Bullish fundamental help looks to be thin this week with export sales seasonally steady to lower, and Argentine crop failures generally thought to be priced in.

South Korean millers issued a tender for 85k tonnes of milling wheat this morning, including 50k from the U.S. & 35k from Canada for May shipment

Ukraine’s Ag Ministry reported cumulative grain exports at 31.8 MMT, down almost 27% from last year’s pace, and including 11.2 MMT of wheat, 18 MMT of corn, and around 2 MMT of barley.  Grain exports so far in February stand at 4.7 MMT, down from 5.04 MMT over the same span last season.

 

Mpls wheat +2

KC wheat -8

Chi wheat -2

Matif wheat +0

Canola +4

Rapeseed +4

Soybeans +5

Soybean oil +49

Crude -30

Corn +0

CAD +19

 

Mixed close for wheat futures yesterday

US wheat futures finished the day mostly lower apart from the front month CBOT contracts which were only marginally higher.  KC futures were down -14.25c on the March contract following the USDA’s Ag Outlook Forum which showed a sharp increase to planted acres and yield for 2023/24.

CFR SEA prices saw APW1 offers slightly cheaper thanks to a weaker AUD with prices dipping below $360/mt again.

Grain exports from Ukraine have slowed down recently as the export corridor nears the end of its term.  3mmt of grain were shipped out in Jan, down from 3.7MMT in Dec, and only 1.5MMT had been shipped by Feb 20 for this month.  There is now a backlog of 140 ships waiting for inspection to clear the Bosporus Strait.

The current US drought monitor shows much of the HRW acres currently in drought conditions, leaving the USDA’s yield for 2023 in jeopardy.

 

Wheat futures continues to trade lower. Lower Russia wheat prices continues to offer resistance. Some say top 3 Russian grain companies hold most of the wheat and are aggressive in selling wheat for export at lower prices.

 

South Korea’s FLC bought 65k tonnes of corn from either the U.S., South America, or South Africa in a private deal this morning without issuing a tender, at $334.50/tonne C&F for June arrival. The country’s NOFI bought 69k tonnes of corn in an international tender for 138k, at the same price for April- May, while Korea’s KFA bought 63k tonnes of optional-origin corn at $335.50/tonne C&F for June arrival as well.

FranceAgriMer reported a second consecutive increase in French soft wheat ratings this week, up two points to 95% good/excellent.

The Buenos Aires Grains Exchange yesterday cut their 2022/23 Argentine soybean production estimate from 38.0 to 33.5 million tonnes; they cut corn output from 44.5 to 41.0 MMT as well.

AgRural reported Brazilian second crop corn planting running well behind pace in Parana and Mato Grosso, the second and third-largest production states; the former stands at 18% done, down from 40% last year and the 23% five-year average, with the latter at 6%, versus 34% LY and the 17% 5YA.

The European Commission cut ‘22/23 E.U. soft wheat exports from 34.0 to 32.0 MMT, still up 9% from last year’s 29.3 MMT; ending wheat stocks rose from 15.4 to 17.1 MMT this month, the highest level in four years.

Private analysts APK-Inform estimated 2022/23 Ukraine grain exports at 39.2 MMT, up from their previous 39.09 MMT estimate last month, and including 13.5 MMT of wheat, 23.0 MMT of corn, and 2.4 MMT of barley.  Cumulative grain exports through February 22 stand at 30.8 MMT, down 28.4% vs LY.

 

Mpls wheat -8

KC wheat -13

Chic wheat -11

Matif wheat -4

Canola -3

Rapeseed -1

Soybeans -1

Soybean oil +14

Crude -33

Corn -6

CAD -52