Category Archives: Mark’s Minutes

Bunge, according to Reuters is on the verge of a cash and stock deal to merge with Glencore backed Viterra to create an agricultural trading giant worth more than $30B including debt.

Viterra / Glencore shareholders reportedly may sign off on the deal as soon as this weekend.

 

Wheat recovers after momentary drop

Wheat futures showed Wednesday’s close was just a blip as the short term run of higher closes resumed which for CBOT has been 6 out of the last 7 closes totalling +33.50c on the July contract.

Aussie wheat exports were down in the month of April to 3MMT vs 3.8MMT in March.

China’s imports were down slightly to 990k.

The June WASDE is out today with analysts estimates tipping for a slight increase in US wheat production to 1.672bbu (45.5MMT) from 1.659bbu (45.15MMT) in the May report.

The lone Russian wheat exporter that offered below a FOB price of $240 at $229 into GASC has reportedly tried backed out of the sale but no official announcement from GASC but have threatened to cash Agric’s $400k performance bond if the do not execute the contract.  Traders have instead moved to offering on a destination basis into MENA markets with CFR offers the equivalent of $15-20/mt under the unofficial floor price of $240/mt.

 

The soybean complex is holding stronger this morning pre USDA with supplies still a bit tighter there than in corn, despite flailing exports.

The USDA is expected to again cut their Argentine crop estimates but the Buenos Aires Exchange is now down to just 21 MMT on soybeans, 6 MMT below the May S&D.

BRZ estimates are again seen making up part of that loss.

French soft wheat condition ratings fell again this week, to 88% good/ excellent; that’s down from 91% last week and 93% two weeks ago, though still above 66% on this date last year and the best at this point since at least 2011.  Corn ratings fell four points WoW, also down to 88%g/ex.

 

Mpls wheat -2

KC wheat -4

Chic wheat +3

Matif wheat +2

Canola +0

Rapeseed +7

Soybeans +3

Soybean oil +16

Crude -21

Corn +5

CAD 5

Wheat markets had a disappointing close even though they were 20 cents higher during the overnight session as we saw accelerated buying after news that the Russian controlled Nova Kakhovka dam was destroyed leading to sever flooding.  Later the market seemed to shrug off the new escalation as Funds too the opportunity to sell into the rally as there are no change in fundamentals

 

Algeria is seeking up to 140k tonnes of optional origin corn for July-Aug shipment, as well as 35k tonnes of meal for July 1-15, all closing tomorrow.

Taiwan millers are seeking 56k tonnes of U.S. milling wheat for July-Aug.

Egypt purchased 55kmt of Russian milling wheat at USD 229 FOB while all other Russian offers were offered at USD 240, the “new” floor level.

Russian news reported that Black Sea grain export deal talks will be held in Geneva on Friday, including officials from the United Nations.

Chinese customs data reported a record 12.02 MMT of soybean imports in May, up 24% from last year and up from 7.26 MMT in April.  The previous record for any month was 11.2 MMT in June 2020, though some traders are seeing another potential record month in June.  Cumulative Jan-May soybean imports stand at 42.31 MMT, up 11.2% from last year’s pace.

Brazilian exporting association Anec is estimating June soybean exports at 13.11 MMT, up from 9.95 MMT last year, with corn at 1.66 MMT, up from 1.5 MMT a year ago.  Soybean meal exports are seen at 2.227 MMT this month, up from 2.16 MMT in the same month last season.

European Commission data showed cumulative soft wheat exports since July 1 at 28.88 MMT, up 11% from last year’s 25.93 MMT pace; corn imports of 24.61 MMT are up 60% from last year’s 15.35 MMT pace through June 4, with soybean imports of 12.03 MMT down 11.5% from 13.6 MMT LY.

 

Mpls wheat -3

KC wheat -3

Chic wheat +1

Matif wheat +1

Canola +2

Rapeseed -6

Soybeans +2

Soybean oil -14

Crude +70

Corn -3

CAD +0

Wheat higher again on Black Sea corridor

Wheat markets continued their surge higher on Friday as the corridor remained closed to inbound and outbound vessels for Ukraine origin grains.

Forecasts for EU/BS look to remain dry after an already dry 2 weeks.  French wheat crop conditions were decreased by 2% to 91% G/E.

The heavy rains in China being reported over the past week could knock 20MMT off their production which was forecast by the USDA at 140MMT.

VIC, parts of Southern NSW and WA look set for some decent rains over the next couple of days with 50-100mm forecast.

 

Corn dominated overnight trade volume once again and is building a higher high and low on top of Friday’s rally.

The trade still has yet to see any real change in a hot and dry U.S. / Canadian weather pattern.

The same persistence remains in the Black Sea arguments, an impasse is sounding likely though

Saudi Arabia bought 624k tonnes of wheat for Sept-Oct shipment, at $262/ tonne C&F, more than the 480k tonnes originally sought.

Ukraine’s Ag Minister on Friday said the country has a “plan B” if Russia continues to block the grain export deal, excluding Russia and guaranteeing shipment via the corridor with funds built up via government coffers.  Mean while, Russia’s foreign ministry says that inspections under the deal have resumed, but they also see “no prospects” for another renewal in mid July.  Everyone has a different opinion

Mexican officials on Friday said they would counter U.S. arguments over GMO trade measures, but they’re committed to “constructive dialogue” over U.S. concerns and plan to reach an agreement without a trade panel.

Ukraine’s Ag Ministry on Friday said the country’s 2023 spring grain planting campaign is “almost complete” at 5.5 million hectares (13.6 mln acres), down from 5.9 mln ha (14.6 mln ac) in 2022.  Grain production was left unchanged at 44.5 MMT despite reduced plantings, versus 53 MMT in 2022.  They noted that most of the country’s winter grain crop is in good condition, but that yields could fall by as much as 20% if hot and dry weather continues.

 

Mpls wheat +7

KC wheat +7

Chic wheat +2

Matif wheat +2

Canola +5

Rapeseed+6

Soybeans +1

Soybean oil -7

Crude +184

Corn -1

CAD+0

Wheat finishes higher yesterday on Black Sea headlines
Wheat futures surged yesterday following comments from Ukraine’s Infrastructure Minister that vessel inspections under the grain corridor deal had once again been suspended with Russia registering only one incoming ship in the last two days of May, without explanation, and 50 vessels are awaiting inspection in Turkish waters. While it has provided a bump, the effect was muted by the market’s anticipation of ongoing issues with the corridor.
Saudi is in for 480k MW for Sep/Oct shipment which is expected to be won by Romanian/Russian exporters.
Black Sea 11.5 offers were ranging from $260-267 CFR Vietnam for Aug shipment period.
ASW1 offers ranged from $280-285/mt CFR SEA ports.

Lack of demand for US export, lower Russia prices and higher EU supplies offers resistance.
Wet US HRW and China raising concern about quality. Some estimate that 30 mmt of China 137 mmt crop will be feed quality.
Questions about Russia, Canada, US and China crops offers some support.

This coming weekend will present another chance for the US Midwest forecasts to finally roll over, with concrete rain chances across the belt yet to arrive. Scattered rains are aiding corn and soybeans for now, and temperatures look to moderate into mid June also.
FranceAgriMer reported a two point decline in French soft wheat ratings this week, to 91% good/excellent, due to continued dry weather; that remains above 67% a year ago and tied with 2015 for the highest rating at this point in the season in over a decade. Corn planting stands at 98% complete, with ratings there down two points week-over-week as well, to 92% g/ex.
StoneX Brazil yesterday raised their 2022/23 Brazilian corn production estimate from 131.6 to 133.75 MMT, with second crop output up from 100.8 to 102.9 MMT due to stronger yields and increased output in Mato Grosso.
Brazil’s government reported May soybean exports at 15.61 MMT, up from 10.64 MMT a year ago, with corn at 385k tonnes vs 1.09 MMT last May.

Mpls wheat +0
KC wheat -4
Chic wheat -1
Matif wheat +1
Canola +2
Rapeseed -2
Soybeans +0
Soybean oil +43
Crude +148
Corn -7
CAD +14