Category Archives: Mark’s Minutes

 

While the fund selling on US wheat futures resumed in the absence of further Russian attacks on the Danube, Matif settled slightly firmer for the day.

For the day on September contract Chicago closed -8.50c, Kansas -2.00c, Minneapolis -9.75c and Matif +€2.75.

Sovecon reported overnight Russia is set to harvest its 2nd largest wheat crop on record at 92.1MMT.  Despite this Russia is still pushing a higher price floor which was seen in the recent GASC tender where Egypt looked to push back by only booking 1 cargo from Romania and seemingly making a point they will not accept the price floor.

 

Corn and wheat are still lingering near lows with soybeans strong again this morning and retesting Monday’s high

“Pro” Farmer estimates disappointed as expected yesterday in Iowa and Minnesota, but still showed a crop disaster generally averted.  Filling out those soybean pods remains the major question amid a hot and dry stretch to end the month of Aug.

Japan bought 91k tonnes of milling wheat in their regular weekly tender as scheduled, including 25k from the U.S. and 66k from Canada.

Taiwan bought 104k tonnes of U.S. milling wheat this morning, of various types, ranging from $310-392/tonne C&F for Oct-Nov shipment.

Bulgaria, Hungary, Poland, Romania, and Slovakia are seeking to extended an E.U. ban on Ukrainian grain imports through the end of the calendar year; the measure still allows transit of UKR cargoes for export elsewhere,

Ukraine’s Ag Ministry reported the end of the 2023 wheat harvest at 21.94 MMT, from 4.6 million hectares (11.4 mln acres), for an average yield at 4.72 tonnes per hectare (70.2 bushels per acre).  The Ministry had the crop pegged at 20.9 MMT earlier this month. 28.8 MMT of total grain has been harvested, including 5.8 MMT of barley.  Total grain production is estimated at 56.4 MMT in 2023, up from 55.3 MMT in 2022.

The European Commission yesterday cut their 2023/24 soft wheat production estimate from 126.4 to 126.1 million tonnes, with exports steady at 32 MMT this month while ending stocks fell from 17.4 to 16.3 MMT.  E.U. corn production fell from 63.0 to 61.7 MMT, with imports steady at 17 MMT.

Day four of the Pro Farmer Crop Tour estimated Iowa corn yields at 182.8 bushels per acre, down from 183.8 bpa last year and the 184.1 bpa three year average; soybean pod counts averaged 1,190, up from 1,174 last year and the 1,180-pod 3YA.  Minnesota corn yields came in at 181.3 bpa, down from 190.4 bpa last year and the 187.6 bpa 3YA figure; soybean pod counts aver-aged 984, down from 1,101 last season and the 1,071-pod 3YA count.

 

Mpls wheat +7

KC wheat +7

Chic wheat +3

Matif wheat -1

Canola +4

Rapeseed -1

Soybeans +9

Soybean oil +129

Crude +94

Corn +0

CAD -10

Wheat opened solidly last night and showed some strength on more Russian drone attacks on Danube River grain ports, but it’s fallen back to range bound trade by this morning as the wheat market retains it’s bearish tone with large crops in other major shippers, including Russia itself, have kept the market under pressure this year, with prices down about 20% since the end of December.

The trade seems fairly content with “Pro” Farmer corn yield and soybean pod count results thus far, appearing that a major production disaster has been averted, though the most anticipated results are yet to come in IA and IL today and tomorrow.

Egypt’s GASC yesterday bought 60k tonnes of Romanian wheat in their international tender, at $270/tonne C&F for October shipment.  They are seeking corn in a tender closing today and their lowest qualifying offer there stands at $259 per tonne cost plus freight from Romania, for late October shipment.  Two U.S. offers via ADM came in at $231-233/tonne FOB but were rejected due to protein and moisture levels.

Taiwan’s MFIG bought 65k tonnes of corn from Brazil for Oct-Nov.

Thailand importers bought 60k tonnes of feed wheat from the European Union, at $274/tonne C&F for November shipment.

South Korea’s NOFI bought 68k tonnes of corn in a tender for up to 138k, from either South America or South Africa, for Oct-Nov; the country’s NOFI rejected all offers in their tender for up to 130k tonnes of feed wheat; and Korea’s MFG bought 66k tonnes of corn in a private deal, also from either South America or South Africa and set for Oct-Nov shipment.

Russia’s Sovecon consultancy yesterday raised their 2023 wheat production estimate from 87.1 to 92.1 MMT, with corn up from 14.6 to 14.8 MMT and barley up from 18.6 to 20.9 MMT.

European Commission data showed cumulative 2023/24 E.U. soft wheat exports at 4.06 MMT through 8/20, down from 5.12 MMT at this point a year ago, with corn imports at 2.12 MMT versus 3.25 MMT last season.

A major soybean buying official said at a conference today that Chinese soybean imports should hit the 100 MMT mark in 2023, above the USDA’s estimate for 98 MMT, and “hover around that level” for the next five years.

Day two of the Pro Farmer Crop Tour saw the eastern leg estimate Indiana corn yields at 180.9 bushels per acre, up from 177.85 bpa last year but below the 183.7 bpa three year average

Soybean pod counts averaged 1,310, up from 1,166 last year and the 1,229 3YA.

The western leg of the tour pegged Nebraska corn at 167.2 bpa, up from 158.5 bpa LY but below the 172.0 bpa 3YA.

NE soybean pod counts averaged 1,160, up from 1,064 LY but below the 1,196-pod three-year average.

 

Mpls wheat +1

KC wheat -1

Chic wheat +1

Matif wheat -1

Canola -4

Rapeseed -1

Soybeans -5

Soybean oil -33

Crude -122

Corn +3

CAD -21

The wheat market finally found some support on Friday after 5 consecutive lower closes driven by a heavy US corn balance sheet.  On September, Chicago finished +23.75c, Kansas +20.50c, Minneapolis +15.00c and Matif +€5.00.

Rumours are that Russia is setting up a deal with Turkey and Qatar that will facilitate the trade of Russian grain to poorer countries.  The new agreement was supposedly seen by a German newspaper citing official correspondence.

The first vessel to leave Odesa since Russia’s exit from the grain deal has cleared the Bosphorus Strait on Friday which was an important first small step for Ukraine in opening up a shipping corridor to their deep sea ports.

Cheapest Sep/Oct wheat offers into SEA late last week out of Bulg/Rom for 11.5 were low $280s.

Argie new crop 11.5 was reportedly offered around $280 for Dec shipment and FW traded in to Thailand around $270.

Aussie prices remain uncompetitive for old and new crop with APW1 in the high $290s

Russian wheat is offered at $260 / $263 FOB deep water ports for Sept / Oct

 

Wheat futures are lower as some estimate US 2023/24 wheat carryout up 20 mil bu from USDA due to lower domestic use.

 

Mpls wheat -6

KC wheat -10

Chic wheat -4

Matif wheat -4

Canola +11

Rapeseed +2

Soybeans +22

Soybean oil +89

Crude +56

Corn +3

CAD +17

 

In the absence of any further news or escalation overnight in the Black Sea, wheat futures were sold off with Chicago Sep losing -21.25c, Kansas -9.00c, MGEX -11.00c and Matif -€2.50/mt.

A growing story in the Black Sea is the quality problem with a growing portion of the wheat crops coming in as feed wheat, as evidenced by the growing spread between feed and milling wheat.  Russian FW FOB bids at $215 are a $20 to $25 discount to 12.5pro MW grade.

Ukraine is reporting record high wheat yields at 4.64mt/ha which is up 35% from last year.  Estimates are that the percentage of the crop that will be feed wheat is growing.

Australia exported 2.75MMT of wheat in the month of June, which was sharply down from 3.3MMT.

 

Traders are preparing for tomorrow’s USDA reports.

On Wednesday morning, the main Ukrainian port Izmail on the Danube was attacked by Russia.  Several buildings were destructed.  40 KMT of grain was damaged in the drone attack, and it disrupted grain exports.  President Zelenskiy said a long queue of ships destined for Izmail can be seen via ship tracking information.

Russian wheat is still the cheapest in the export market as seen in Egypt’s Tuesday purchase of 235 TMT of Russian wheat.

India will release up to 5 MMT of wheat from stocks in an attempt to control rising prices.

Rain continued to delay Germany’s wheat harvest bringing quality concerns.  Traders estimate 50% of the German wheat crop is harvested.

Refinitiv Commodities Research says key U.S. soybean areas are at near record highs for vegetation density levels.  These areas are in the central soybean belt and include Iowa, Illinois, and Indiana.

Refinitiv also looked at flooding in Northeast China.  Northeast China has near or record high vegetation densities as well seen by satellite imagery.  The forecast in Northeast China is expected to be average during the next two weeks.  Heavy rain from the Typhoon Doksuri 1-2 weeks ago brought flood damage particularly in Hebei.

The Rosario exchange estimates Argentina’s 2023/24 soybean production at 48 MMT and corn production at 56 MMT.  If realized this would be 20 MMT greater than the soybean harvest in the previous marketing year and 22 MMT more than the corn harvest in 2022/23.

South Korea passed on all offers made for the purchase of a 140 TMT tender of feed corn.  The origins excluded Russia and Ukraine.  The lowest offer was $256.49/MT C&F for December delivery.

Algeria issued a crop tender to purchase 80 KMT of feed corn with Argentina as the origin.  Algeria is taking offers until August 10.

Jordan issues a tender purchase 120 KMT of milling wheat.  The deadline for offers is August 15.

Tunisia wants to buy 25 TMT of soft wheat.

Russia will supply free grain to six countries in Africa in the near future according to Russia’s Agriculture Minister Dmitry Patrushev.

 

Mpls wheat +6

KC wheat +7

Chic wheat +3

Matif wheat -2

Canola +2

Rapeseed +3

Soybeans +9

Soybean oil -20

Crude -20

Corn +1

CAD +6