Wheat Futures Continued Their Sell Off On Friday Closing…

Wheat futures continued their sell off on Friday closing out the week, -21.50c lower for Chic Dec as funds continue selling wheat notching up 7 consecutive weeks as net sellers.

This week’s forecast is looking very hot and dry for Argentina with temps exceeding 30deg across much of the wheat belt.  The Rosaria Grains Exchange had already lowered their estimate to only 11.8MMT.  Their wheat harvest is currently at 23% complete although BAGE has said more cuts are likely due to poor yields so far.

Australia’s winter crop harvest has been picking up pace on the East Coast thanks to recent dry weather which looks set to continue this week.  The recent drop has seen the APW1 ASX contract drop from the high in November of AUD503/mt down to now AUD399.50 on the Jan contract.

 

Pakistan has approved 450k tonnes of Russian new crop wheat imports, offered at $372/tonne C&F for Dec-Jan-Feb shipment; the country also bought 500k tonnes of wheat in an international tender that closed late last week, also at $372/tonne C&F and also for D-J-F shipment (though optional-origin).

Ukraine’s Ag Ministry reported the country’s 2022 grain harvest at 41.9 MMT, or 85% complete, as of December 1; corn was 60% done at 15.5 MMT

The Ukraine grain traders Union UGA reported November wheat exports at 1.58 MMT, down from 1.98 MMT in Oct, with all grains at 2.3 MMT, down from 3.5 MMT last month.  Cumulative exports since July 1 remains down almost 30% year over year at 18.3 million tonnes.

Russian consultancy SovEcon reported November grain exports at 4.85 MMT, up from 4.70 MMT in Oct, with wheat even MoM at 4.30 MMT.

Statistics Canada on Friday reported 2022 all wheat production at 33.8 MMT, up from 22.3 MMT last year but below both 34.7 MMT in September and the 34.8 MMT trade estimate.  Canola output came in at 18.2 MMT, up from 13.8 MMT LY but below 19.1 MMT previously and the 19.2 MMT guess.  Corn output fell from 14.9 MMT 14.5 MMT, down from the 14.9 MMT estimate.

The Rosario Grains Exchange on Friday estimated 2022/23 Argentine wheat exports at just 6.5 MMT, down from 14.5 MMT in ‘21/22 and the lowest in eight years.  The current harvest is seen at 11.8 MMT, down from 19 MMT initially estimated in May and the record 22.1 MMT last season.

 

The much anticipated EPA announcement revealed the blending obligations for the fuel industry for the next 3 years.  They called for overall biofuels growth from 2023 to 2025 of about 2 billion gallons which also included a modest growth projection in corn based ethanol.  Growth and investment on the production side of biofuels, particularly renewable diesel, has been dramatic, quickly creating current production abilities equivalent to or beyond those projected by the EPA in these RFS projections.  Many companies have expanded or are building new soybean and canola plants to meet an obvious growing demand for “clean” renewable fuel which is plant based and which can replace fossil fuel carbon threats to our planet.

 

Then StatsCan printed a bullish canola number in Friday’s report.  Since the canola export program is frontend loaded and producers are content to sit tight, futures made a big move up Friday

Updated CGC weekly

This year             Last year

Supply                19,148                 15,614

Deliveries           6,075                   6,142

Exports               2,377                   2,142

Crush                  2,519                   2,335

 

Mpls wheat +3

KC wheat +4

Chic wheat +3

Matif wheat -1

Canola +1

Rapeseed +4

Soybeans +8

Soybean oil +5

Crude +246

Corn +2

CAD +22