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
Soybean oil +99