Author Archives: GW Commodities

US wheat futures ended the day higher despite the January WASDE increasing world ending stocks and production for 2022/23.

US ending stocks were reduced only marginally on higher domestic feed usage and production left unchanged.

A weaker USD provided support to agri stocks across the board as the USD index dropped by nearly 1% to its lowest point since May last year.

South Korea booked 2 US wheat cargoes totalling 80k for Feb/Mar shipment with prices ranging $308-388/mt pending quality.

South Korea’s MFG bought 68k tonnes of corn from the U.S. or S.A., at just under $339/tonne C&F for shipment between late Feb and mid March.

Turkey’s TMO booked 565k of MW12.0 for Feb/Mar shipments with 410k booked CFR at USD326.74/mt.  The remaining 155k was booked EXW at $331.8/mt.

Taiwan millers bought 45k tonnes of U.S. milling wheat this morning.

Egypt was also reportedly in the market looking for MW11.5 at $329/mt.

The AUD continues to surge against a weakening greenback and is currently just shy of 70c at 69.7 – its highest level since August last year.

 

The grains and oilseeds mostly followed through on yesterday’s post USDA rally but have cooled a bit this morning

Soybeans continue to hold the most bullish fundamental picture through the winter months

Brazilian grain exporting agency Anec yesterday confirmed “atypical” soybean sales to Argentina, estimated at 200-300k tonnes for February-March.

The IGC raised their ‘22/23 world wheat production estimate by 5 MMT, to 796 MMT; world corn output fell by 5 MMT to 1.161 billion tonnes.

 

Mpls wheat -1

KC wheat +4

Chic wheat -1

Matif wheat -2

Canola -2

Rapeseed -4

Soybeans -2

Soybean oil -100

Crude +42

Corn +1

CAD -41

Wheat down again

Apart from 1 marginally higher close last Thursday, it’s been all red for wheat markets since the start of 2023 which has seen the CBOT(H) contract down -61c so far

Australia’s harvest is around 88% complete now.  CBH’s latest production estimates came in at 37MMT for wheat although this looks low compared to most others with the highest around 42MMT.

Trade estimates for US wheat plantings ahead of tomorrow’s Jan WASDE came in at 34.485 MA which would be up on 2022 planting of 33.271 MA.  Planted acres may be quite different to harvested acres this season with currently 64% of the winter wheat crop in drought conditions.

 

Corn and soybeans look to be digging in ahead of the USDA data dump tomorrow, while wheat holds near yesterday’s low

Foreign buyers did log a few sales this morning despite generally overpriced U.S. supplies

South Korean millers issued an international tender for 50k tonnes of U.S. milling wheat, for March-April shipment; the country’s MFG bought up to 65k tonnes of feed wheat from either the U.S. or Australia without issuing a tender, at $346/tonne C&F for May-June shipment.

Taiwan’s MFIG bought 65k tonnes of U.S. corn for March-April shipment.

Egypt’s GASC provisionally booked 60k tonnes of wheat in their World Bank funded tender yesterday, at $337/tonne C&F for Feb shipment, with another 60k tonnes potentially purchased depending on financials.

European Commission data yesterday showed cumulative grain exports since July 1 at 16.97 MMT, up from 16.13 MMT at this point last year; corn imports of 15.12 MMT are up from 7.89 MMT through January 6 last season.

Brazilian exporting agency Anec yesterday estimated January soybean exports at 1.969 MMT, up from 1.314 MMT last week; corn exports of 5.024 MMT are up from 4.326 MMT last week, with wheat up from 281k to 446k tonnes and meal up from 1.337 to 1.403 MMT.  The group reported that more than a million tonnes of corn has already been booked by China this month.

 

Mpls wheat -1

KC wheat -1

Chic wheat +1

Matif wheat -1

Canola +5

Rapeseed +5

Soybeans +11

Soybean oil +79

Crude +150

Corn +3

CAD -3

Mixed day for global wheat futures

While the sell off in US was momentarily hit the pause button overnight Matif regained some lost ground up +€2.75/mt  and back above €300/mt on the March contract, where the ASX was still trading the delay and ended the day down $10.50/mt on the Jan contract.

APW1 was reportedly traded into SEA CFR at a price sub USD360/mt for March shipment.

The US drought monitor is currently showing 64% of the winter wheat crop currently experiencing drought conditions.

There is a large consensus around the trade that Australia’s wheat production reaching as high as a record 42 MMT due to massive yields, up from the official 36.6 MMT projection from ABARES..  Export logistics however cap out at around 40mmt for all grains meaning wheat will need to fight it out with other grains for capacity.

 

The grains are pushing back against overall commodity head winds this morning but mostly in reaction to a rough week to start the year, recouping some fairly substantial losses so far in 2023. the recovery will be fighting against technical resistance, though, and a severe lack of fundamental help until the trade has the big USDA January report date to process.

The market is guessing traders will be expecting a bit of a rebound in corn and soybean yields/production/carry outs in next Thursday’s annual “final” publication.

Taiwan millers tendered for 45,200 tonnes of U.S. milling wheat this morning, of various types for March shipment.

Importers from the Philippines rejected all offers and made no purchase in their tender for 110k tonnes of feed wheat closing yesterday.

Tunisia yesterday morning bought 100k tonnes of soft wheat and 75k tonnes of feed barley, with the former’s lowest price (of four 25k-tonne lots) coming in at just under $382 per tonne cost plus freight.

China’s government said they will auction off 140k tonnes of wheat from state reserves on January 11, from the 2014 through 2017 harvests.

Ukraine’s Ag Ministry reported the country’s 2022 grain harvest at 93% complete, or 49.5 million tonnes; corn stands at 81% done, or 22.1 MMT.

 

Mpls wheat +4

KC wheat +0

Chic wheat +5

Matif wheat -2

Canola +2

Rapeseed +0

Soybeans +12

Soybean oil +16

Crude +149

Corn +4

CAD +13

Wheat futures have kicked off the year nearly -20c lower as a round of profit taking following a very poor US export inspections report and a strong USD sent agri-markets sharply lower.

Matif followed suit and ended the day -€6.25/mt lower on the March contract.

US wheat export inspections came in at only 86k which was well below market expectations of 250-450k.

Argentina received some showers the last couple of days which was well too late for wheat crops with 2022 being the 2nd driest year (2nd to 2008) in the past 35 years.  Harvest is now more than 90% complete although with a G/E rating only at 8% vs 78% last year.

Australia’s harvest got through a big chunk over the Christmas/NY holidays due to favourable conditions with up to 80% already complete.

Cash markets to start the year while slow are starting to show, with Ukr11.5 CFR offered at USD350/mt CIF SEA.  Braz12 offered low $350s CFR SEA

 

There have been no deliveries against the January canola contract, open interest is 69 contracts

There are no warrant/delivery cert open

 

Grains are lower once again this morning, but soybeans found support as a drop in beans makes crush even more profitable.

Oil is falling over concerns on the global economy and China covid cases.

StoneX updated its forecast for the 2022/23 Brazil corn crop to 128.71 MMT compared to 130.3 MMT in the previous forecast.

The USDA Fats & Oils report showed 189 million bushels of US soybeans were crushed in November 2022, below the average trade guess.  Reuters survey respondents on average expected 190.2 million bushels.

447.4 million bushels of corn was used for ethanol in November vs. 466.9 million bushels in the same month a year ago. 1.778 million tons of DDGS were produced in the November vs. 1.997 the year prior.

Brazil’s new President Luiz Inacio Lula da Silva issued a decree that keeps fuels exempt from federal taxes. The sugar and ethanol industry was expecting taxes on gasoline and ethanol to resume. New York sugar futures fell 2% as a result.  Federal taxes in Brazil are heavier for gasoline than ethanol, so the reinstatement of federal taxes was seen to be positive for ethanol and a chance to increase market share.  The tax exemption is accused to be unconstitutional due to a law that requires the federal government to give a tax incentive for biofuels.

Bird flu was found 90 miles west of Prague in the Czech Republic, authorities will destroy 750,000 hens.

Tunisia is looking to purchase 100,000 metric tons of milling wheat. It’s optional origin with the submission deadline set at January 5.

An importer group in the Philippines wants to purchase 110,000 metric tons of animal feed wheat.  The submission deadline is January 5. The group is looking for delivery in February and March.

Analysts expect Russia’s January wheat exports to be at least 3.6 MMT.

South Korea purchased 6,000 metric tons of GMO-free food grade soybeans in a tender of 25,000 metric tons that closed today.

Mpls wheat –5

KC wheat -10

Chic wheat -8

Matif wheat -3

Canola +2

Rapeseed -1

Soybeans +7

Soybean oil -18

Crude -219

Corn -3

CAD +74