Author Archives: GW Commodities

Wheat rallied yesterday on news the Iraq bought 50kmt HRW from the US Gulf and 50kmt HRS from the US PNW

Black Sea FOB values continue to keep a lid on prices for the time being

 

Wheat bounced to nearly a six week high overnight on fighting words from Russia’s Putin

Corn looks more than willing to follow, though, rising to its highest level since June with U.S. yield estimates falling.

Vladimir Putin wants to discuss reopening the Ukraine export deal, accusing Ukraine of sending most exports to the E.U. and not aiding poorer African countries.  Only two cargoes have come under the U.N. World Food Program.

South Korea’s MFG bought an estimated 135k tonnes of optional origin corn yesterday for December-January arrival; the country’s NOFI bought 55k tonnes of Australian feed wheat in a private deal at $349/tonne C&F.

Jordan bought 60k tonnes of wheat in an international tender at $347/tonne C&F, for late February shipment, and they are seeking another 120k for March-April that closes next Tuesday (9/13).

Chinese customs reported August soybean exports at 7.17 MM, down almost one quarter from last year’s 9.49 MMT, and the lowest Aug since 2014.

Private analysts IHS Markit (Informa) yesterday pegged 2022 U.S. corn yields at 171.6 bushels per acre, down from 176.9 bpa last month, with corn production at 14.040 billion bushels, 319 million below the USDA August figure.  Soybean yields fell by half a bushel this month to 51.3 bpa, with out put there at 4.471 bln bu, 60 million below the working government guess.

The USDA said they would review 2022 planted and harvested acreage estimates for corn and soybeans (along with other crops) prior to the September S&D Report, saying adjustment data was “sufficiently complete” already

The Rosario grains exchange yesterday reported its highest soybean trading volume since early 2017, after the government announced a preferential exchange rate to boost exports on Sunday.

 

Mpls wheat +21

KC wheat +28

Chic wheat +30

Matif wheat +9

Canola -3

Rapeseed +3

Soybeans +5

Soybean oil -53

Crude -280

Corn +6

CAD -28

Wheat futures selloff on strong USD

Continued USD strength as well as continued shipments from Ukraine’s Black Sea ports saw wheat futures come under selling pressure overnight and led to CBOT(Z) losing 37.25c, KC(Z) -44.50c and MGEX(Z) -43.00c.  Matif was also under pressure with Dec down -€3.00/mt.

A vessel carrying corn from Ukraine through the Bosporus strait drifted ashore after a rudder failure on Thursday.  Traffic through the strait is still blocked for safety reasons.

Ukraine’s Agrarian Council has stated wheat plantings for 2023 could fall by 30-40% due to lack of funding which will cap production at 15mmt.

Ukraine offers in to SEA yesterday were sharp, coming in sub $350s for Sep/Oct shipment although hesitancy among millers remains.

Aussie APW in bulk was offered CFR SEA yesterday for Jan/Feb in the low to mid $380s.

Overnight volume was in the dumps as the grains rebounded from losses throughout the session, boosted by the dollar/crude/commodities, and a lower StoneX corn yield estimate yesterday afternoon as widely expected.

It would appear that the USDA will have some work to do to shave more bushels off an already fairly tight corn carryout for 2022/23.

Egypt’s GASC bought 120k tonnes of wheat yesterday in direct talks with Russian suppliers, at $340/tonne C&F for November delivery.  They appear to be favoring direct negotiations over the last month and a half, since cancelling an international purchasing tender in mid July.

South Korea booked 63k of Aussie FW at a price of USD356/mt CFR for Jan/Feb shipment.

Indonesia yesterday bought around 65k tonnes of corn from either the U.S. or South America yesterday, for November shipment.

StoneX yesterday cut their 2022 U.S. corn yield estimate to 173.2 bushels per acre, down from 176.0 bpa in August, with production implied at 14.168 billion bushels, almost 200 million below the USDA Aug.  Soybean yields came in at 51.8 bpa, up from 51.3 bpa last month, with output at 4.515 bln bu, just 16 million bushels below the working government projection.

StoneX Brazil yesterday raised their 2022/23 soybean production estimate by just over a million tonnes, to 153.6 MMT, due to stronger yields; that’s up from 127.2 MMT in the current season. First-crop corn output was cut by 500k tonnes to 29.85 MMT due to lower planted area; that’s still up from 26.4 MMT in ‘21/22. Total corn production for ‘22/23 stands at 138.7 MMT, up from 130.6 MMT this season and 100.4 MMT in 2020/21.

Ukraine’s Deputy Ag Minister said there could be a grain storage shortage of 12 million tonnes by the end of November, though that is less than originally feared due to increasing export paces. Grain exports rose from 3 MMT in July to 4.5 MMT in August, expected to hit 5 MMT this month.  The country’s Ag Ministry also reported the start of the 2022 sunflower and soybean harvests.

FranceAgriMer reported 45% of the country’s corn crop in good to excellent condition, down another two points from last week and below 91% last year; 1% of the crop was said to be harvested as of August 29.

Mpls wheat +12

KC wheat +8

Chic wheat +11

Matif wheat -5

Canola +2

Rapeseed+4

Soybeans +18

Soybean oil +99

Crude +248

Corn +7

CAD+31

Wheat retreats on Tuesday’s trade

As the market grapples with what the counter offensive in Kherson means and the uncertainty it brings for grain exports out of Ukraine

Ukraine managed to ship out 1.45mmt through the grain corridor during the month of August, most of which was corn.  If the pace end of the August is kept up, the grain corridor could get close to 3mmt.

In tender news, Jordan booked 60k of MW at $379.50/mt CFR Aqaba for LH Jan shipment.

Algeria tendered yesterday for Sep/Oct shipments with prices reported at $364-365/mt CFR from Russia.

Egypt was rumoured to be in the market yesterday for more private purchases for Nov/Dec shipments.

 

While profit taking was the main factor pressuring grains on the CBOT yesterday, it is not the only one.  With weakness seen in crude oil prices also taking a bite out of agricultural futures.  Oil prices are down over 2%, which in turn is pressuring grains due to their exposure in energy via renewable fuels.  The energy complex is still a big influence, with crude and corn very correlated lately.  When crude is down, the ags markets will struggle also.

 

Wheat futures are lower.  Most month end short covering may be done.  Concern about global stagflation and inflation quickly turning to deflation could reduce global food demand.

Many US jobs go unfilled while many workers are struggling to pay higher total bills.  This could also slow food demand and restaurant dining.

US wheat export prices are uncompetitive.  US SRW export price is near $346 while Black Sea is near $315.  Russia continues to lower export tax which is giving buyers some new confidence in buying wheat forward.

 

Mpls wheat -10

KC wheat -10

Chic wheat -8

Matif wheat -1

Canola -12

Rapeseed +3

Soybeans -14

Soybean oil -34

Crude -160

Corn -12

CAD -7

Friday wheat markets bounce back from Thursday’s drop

Despite Thursday’s selloff, wheat markets bounced back on Friday and finished in the black with the CBOT (Z) contract +16.25c for the day and +34.25c for the week.  Friday’s strength came from a weaker USD and a smaller corn yield figure from the Pro Farmer Tour at 168.1bpa than the USDA’s figure at 175.4bpa.

Strong French wheat exports lent strength to Matif wheat futures on Friday with demand usually not seen until October, filling up the stem.  China was heard to have bought several pmx vessels within he last 2 weeks.

This month so far Ukraine has shipped 1mmt of grain/oilseeds from Odesa port (mostly corn) under the Export Corridor brokered by the UN.  Ukraine’s Infrastructure Ministry previously stated August’s export number could hit 3-4mmt.

In cash markets, Aussie APW1 was stable around $400-405/mt CFR SEA for Jan/Feb shipment and ASW closer to $380/mt. Ukr11.5 remains aggressive in the $350s CFR SEA however buyers remain reluctant.

Pro Farmer obviously came out with even a more bullish corn yield estimate than was even expected, following some shaky results across the week during their crop tour

The trade will be very interested to see if private and public yield estimates follow suit in the next two weeks, starting with our StoneX September survey this Thursday.

So, wheat follows corn

Algeria tendered for a nominal 50k tonnes of optional origin soft milling wheat, with an offer deadline tomorrow, and shipment sought for Sept-Oct.

Bangladesh is looking to import 500k tonnes of wheat from Russia in a direct government-to-government deal, at $430/tonne C&F for shipment thru Jan.

Ukraine’s Ag Ministry reported cumulative grain exports at 3.6 MMT since July 1, down 53% from last year’s pace, including 2.33 MMT of corn, 981k tonnes of wheat, and 289k tonnes of barley. August exports so far stand at 1.9 MMT, down almost 60% from last year’s pace.

Russian consultancy SovEcon estimates August grain exports at 4.20 MMT, up from 2.65 MMT in July, with wheat at 3.5 MMT vs 2.3 MMT last month.

 

Mpls wheat -1

KC wheat +1

Chic wheat +3

Matif wheat +2

Canola -12

Rapeseed -1

Soybeans -8

Soybean oil -70

Crude +157

Corn +10

CAD +3