April 29, 2024 - Newswires

Wheat prices rose for the seventh consecutive session, and posted the largest weekly move since Feb 2022 ...

Good morning, Farmer Family ...

US farm markets ended mixed, but mostly higher on Friday.

Corn prices eased 0.23%.

Soybeans also shed 0.28%.

The rest of the soy complex was mixed as soymeal fell 1.13%, while soyoil picked up 0.25%.

Wheat prices captured variable gains, as Chicago SRW lifted 0.17%, Kansas City HRW jumped 2.25%, and Minneapolis spring wheat rose 0.9%.

• Wheat prices gained for the seventh consecutive session.
• Dry weather in parts of southern Russia and the central U.S., as well as freezing weather in parts of Europe continued to propel short covering.
• However, weather forecasts showed greater chances of rain for the coming days in both regions.
• Corn and soybeans failed to follow suit, meantime, closing with modest losses.
• Soybean inched down, and corn stayed fairly flat as traders watched for U.S. planting delays as heavy showers are forecast in the Midwest in the coming days.
• Rain and colder temperatures in the Midwest could hinder U.S. planting progress, but could also be beneficial to the crop.
• U.S. corn was still not competitive with cheaper Brazil exports.
• Also, slower US soybean exports underscored competition from Brazil, and weighed over the market.
• Argentina's soybean harvest continued to progress.
• Thus, plentiful supplies from South America made U.S. soy less competitive globally.
• A strengthening U.S. dollar, bolstered in part by U.S. inflation data, also saw both commodities facing some down pressure.

In this context ...

• Basis bids for soybeans shipped by barge to the U.S. Gulf Coast were steady to higher, supported by tight supplies of the oilseed as farmer sales remained thin.
• But corn barge bids drifted lower in quiet trade.
• Notably, at the Gulf, CIF soybean barges loaded in April were bid at 45 cents over the CBOT May contract, steady with Thursday, but May soybean barges traded at 57 cents over the same contracts, up 4 cents from Thursday's trades. May barges were re-bid at 54 cents over futures.
• Export premiums for May soybean loadings at the Gulf held at around 60 cents over May futures.
• For corn, CIF Gulf barges loaded in April were bid at 50 cents over CBOT May futures, down 2 cents from Thursday. May corn barges were also bid 2 cents lower at 50 cents over futures.
• FOB basis offers for May corn loadings held steady at 55 cents over CBOT May futures while June loadings were offered around 48 cents over July futures, down a penny.
• For wheat, basis values finished the week mixed.
• HRS basis was down in the Gulf and flat in the PNW, while HRW basis was flat in the Gulf and down in the PNW.
• The rally sparked HRW and HRS farmer sales, which brought more market liquidity and put pressure on basis values.
• However, the tight export capacity in the near term balanced out the decline.
• SRW basis remained flat will soft wheat prices increased following recent demand.
• Commodity funds were net seller in CBT corn, soybean, and soymeal contracts, while they were net buyers in wheat and soyoil.

For the week ...

• Front months saw May corn holding on just 1.5% gain.
• Soybeans settled 0.78% higher.
• Soymeal was down 1.08%, while bean oil erased part of the previous week sell off and picked up 1.24%.
• The wheat market was sharply higher?with Kansas City HRW shooting up 11.13%, Chicago was just behind, ending up 9.63%, and Minneapolis spring wheat advanced by another 7.8%.
• Meanwhile, the most-active corn contract rose 3.81% - its biggest weekly advance since the week of March 4.
• The most-active soybean contract settled 0.99% higher - marking its first weekly advance since the week of March 11.
• The most-active wheat contract rose 9.79% - the largest weekly move since February 2022.

After the sessions close ...

• The CFTC Commitment of Traders report showed specs in corn futures and options adding 8,638 long 16,016 contracts to their position in the week that ended on April 23, but also exiting 32,385 shorts (short covering). They held a net short of 238,546 contracts by Tuesday evening.
• The report showed spec funds in soybean futures and options were also short covering in the week ending April 23. They exited 16,705 shorts and added 2,156 longs. That took them back down to a 149,014 contract net short.
• The report showed spec funds in CBOT wheat bailing out of 17,525 short positions and adding 2,693 longs during the week. That dropped their net short position as of 4/23 to 76,184 contracts. The net short had been the largest since last November just a week earlier.

This morning ...

Chicago wheat prices fell, though remained near four-month highs. Corn and soybeans were little changed.

• Notably, the most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.5% by 0350 GMT, soybeans rose 0.2% and corn was up 0.1%.
• The week begins with the Export Inspections report in the afternoon.
• Overnight after the sessions close, we will get the weekly Crop Progress report.
• Tuesday is the first notice day for May grain futures deliveries.
• On Wednesday we will get updated EIA ethanol stocks and production data.
• It will also be the first of the month, so USDA will release Fats & Oils, Grain Crushing and Cotton Consumption reports.
• The weekly Export Sales data will be out on Thursday morning.
• The May options expiration is on Friday.

Canada

Western Canadian bids for Canadian Prairie Red Spring (CPRS) and Canadian Western Red Spring prices continued to push higher. Durum wheat also trended higher.

• Notably, during the week ending April 26, CWRS wheat prices were up C$14.22 to C$16.97 per tonne.
• Average prices were between C$320.48/tonne in southeast Saskatchewan to C$338.80 in southern Alberta.
• CPRS prices jumped between C$20.81 to C$22.38/tonne.
• The lowest average bid for CPRS was C$ 294.33 in southeast Saskatchewan, while the highest average bid was C$318.58 in northern Alberta.
• The average prices for Canada Western Amber Durum (CWAD) were up C$2.58 to C$5.22 per tonne with bids between C$396.25 in northwest Saskatchewan to C$407.99 in west Manitoba.

Meantime, per latest data from the Canadian Grain Commission ...

• Common wheat deliveries into the handling system during the week ending April 21, 2024, were at 355,5k mt, with durum at 54,0k mt as well.
• Canadian wheat exports for shipping weeks 38 came in at 427,1k mt, for a total of 15.710,2k mt YTD.
• Durum wheat exports were at 106,7k mt, for a total of 2.663,6k mt YTD.
• Commercial stocks stood at 2.248,1k mt for common wheat, and at 433.6k mt for durum.

South America

Brazil

Brazilian soy exports will reach 13.48 million metric tons in April, down from 13.745 million metric tons forecast the previous week, grain exporters group Anec said.

• That is a decrease from the same period last year when they hit 14.046 million tons.
• Soybean meal exports, too, are expected to drop to 2.443 million tonnes from 1.742 million tonnes a year earlier.
• Corn exports, on the other hand, are expected to see a significant decrease, with Anec predicting shipments of up to 81,728 thousand tons in April 2024, down from 166,552 thousand tons in the same period last year.

Argentina

Argentina's massive Rosario farming port lost its spot as the world's No. 2 grains export hub in 2023.

• According to the Rosario grains exchange, Rosario shipped out 42.4 million metric tons of grains last year, falling below the sprawling Santos port in Brazil, which exported 62.3 million tons.
• New Orleans, in the United States, nabbed the No. 1 spot, the Exchange said.
• "The impact of the historic drought that affected production of Argentine grains in the 2022/23 campaign dented shipment numbers last year," the exchange added.

Europe

European grain markets ended mixed.

• Both new-crop and old-crop prices rose for wheat and corn.
• Wheat prices extended a rally reaching its highest level since December.
• The Sep wheat contract, the most active position on Paris-based Euronext, was 1.62% up at 235.25 euros ($251.5) a metric ton, putting it up more than 9% for week.
• Corn prices followed wheat higher.
• Weather updates appeared to show southern Russia would stay mostly dry and warm in the week ahead.
• There was also concern that showers in the central United States would miss part of top wheat growing state Kansas.
• In addition crop worries in the European Union mounted, after the European Commission cut its forecast for the EU's main wheat crop in 2024/25 to a new four-year low.
• In France, the condition of soft wheat crops edged down to remain at a four-year low, data from farm office FranceAgriMer showed.
• Wheat markets were nonetheless being capped by ample short-term supplies being exported through the Black Sea.
• Russian 12.5% protein wheat for May Black Sea shipment was quoted at about $213 a ton FOB on Friday but with reports of trading around $216 a ton.
• A large Panamax-size shipment of Ukrainian 11.5% protein milling wheat for late May/early June shipment was offered for sale at $205 a ton FOB.
• Despite the war risk, Indonesian buyers were seeking offers for a large 50,000 ton shipment of Ukrainian 11.5% milling wheat for May/June shipment.
• In the oilseed sector, the approach of the May 2024 closing tomorrow evening is pushing prices to evolve differently from the following deadlines.
• Prices for the 2024 harvest rose on Friday, but failed to return to the week's highs, as did canola prices and the easing of palm oil prices.

North Africa

Egypt has procured 900,000 metric tonsof local wheat so far in the harvest season that started on April 15.

• That is about 30% of its target, the supply ministry said.
• Egypt aims to procure a total of 3.5 million tons of local wheat in the current 2024 season.
• The daily procurement rate reached 120,000 tons compared with 80,000 tons in past seasons, the ministry added.

Ukraine

Ukraine's grain exports in the 2023/24 July-June marketing season had reached almost 40.289 million metric tons as of April 26, of which 5.238 mln tonnes were shipped this month, agriculture ministry data showed.

• Exports this season have included 15.404 million tons of wheat, 22.231 million tons of corn and 2.178 million tons of barley.
• The total export of Ukrainian flour as of April 26 is estimated at 85.7 thsd tonnes, including wheat flour - 81 thsd tonnes.
• Ukraine’s grain exports could total 6-7 million tons in April.
• Ukraine will export another 12 million tons of agricultural products by the end of the MY, Maksym Kharchenko, logistics market analyst at UkrAgroConsult,said.

Russia

Russia's state weather forecaster on Saturday said it sees threat of drought persisting in May for eastern portions of the Southern District, Russia's top wheat growing region.

• The March-April period has been among the driest ever for the district.

• As a result, Russia’s 2024 grain harvest could drop to 132 million metric tons from 144.9 tons in 2023, the country’s agriculture ministry said last week.
• However, more rain in South Russia are expected, according to the EU model.
• Thus, Russia's southern wheat will see good rains over the next weeks.

Southeast Asia

Malaysia

Malaysian palm oil prices rebounded from a two-day fall.

• Notably, the benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed up 0.57%.
• However, the contract still was down 0.76% week-on-week.
• Yields are still declining, and May production numbers may not see a significant increase, while local demand, especially for biodiesel, remains largely intact.
• However, Dalian’s most-active soyoil contract fell 0.03%, while its palm oil contract traded flat.
• Traders indeed continued to sell their positions in anticipation of further losses in the market, albeit the strong fundamentals.
• Soyoil rose on dry and hot weather in northern Argentina.
• Crude oil also rose, as a top U.S. official expressed optimism over economic growth.
• Stronger crude oil prices make palm a more attractive option for biodiesel feedstock.
• Capping gains, the Malaysian ringgit strengthened 0.19% against the dollar.

Australia

The 8-day forecast has very little to get excited about for Vic and SA.

• However, dry sowing is common now through southern New South Wales and Vic as they hit the cereal planting window, although after a run of dry and warm weather, concern is starting to creep in as to when the next decent rain event will arrive.
• In this context, the firmer tone in Aussie local markets continued into the end of the week, also helped by offshore rallies.
• However, grower re-engagement was notable, as triggers were hit after a A$40/t rally since March.
• Meantime, though Southern Qld is looking at totals of less than 10mm, southern WA has 5-15mm on the radar with higher totals of up to 25mm for the far south.
• NSW looks to be in with the best chance this week with a widespread 10-50mm expected with the higher totals expected in the central and northern regions.

International grain and oilseed tenders & trade

• Algerian state agency ONAB has issued international tenders to purchase up to 160,000 metric tons of animal feed corn and 70,000 tons of soymeal. The deadline for submissions of price offers is Tuesday April 30. The corn is sought from Argentina or Brazil only in up to four consignments each of 30,000 to 40,000 tons. The soymeal can be sourced from optional origins and is sought in two consignments of between 25,000 and 35,000 tons. Both the corn and soymeal were sought for shipment in May.
• Taiwan Flour Millers’ Association reportedly purchased 106,675t US milling wheat in two consignments. The first included 33,825t DNS (14.5pc protein) at US$332.89/t fob, 13,550t HRW (12.5pc) at $272.64/t fob and 6,600t SW (8.5pc-10.0pc) at $249.12/t fob, for June shipment. The second consisted of 31,950t DNS (14.5pc) at $313.07/t fob, 13,950t HRW (12.5pc) at $271.17/t fob and 6,800t SW (8.5pc-10.0pc) at $234.07/t fob, for July shipment.

Outside markets ...

Energy markets

Oil prices settled higher.

• Notably, Brent crude futures settled up 0.55%, while U.S. West Texas Intermediate crude futures settled up 0.34%.
• For the week, Brent crude futures settled up 2.53%, while WTI crude futures settled up 1.98%.
• Supply concerns supported prices as tensions continue in the Middle East.
• Crude had support from the recent Ukrainian drone attacks on Russian refineries that damaged several Russian oil processing facilities, limiting Russia's fuel exporting capacity.
• Russia's fuel exports in the week to April 21 fell by -500,000 bpd from the prior week to 3.45 million bpd.
• A decrease in crude in floating storage has been bullish for prices.
• Monday's weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week fell -18% w/w to 75.45 million bbl as of April 19.
• Wednesday's EIA report showed that US crude oil inventories as of April 19 were -3.4% below the seasonal 5-year average, gasoline inventories were -3.6% below the seasonal 5-year average, and distillate inventories were -6.8% below the 5-year seasonal average.
• US crude oil production in the week ending April 19 was unchanged w/w at 13.1 million bpd, below the recent record high of 13.3 million bpd.
• Baker Hughes reported Friday that active US oil rigs in the week ended April 26 fell by -5 rigs to 506 rigs.
• The number of US oil rigs has fallen over the past year from the 4-year high of 627 rigs posted in December 2022.
• However, capping gains, a strong dollar and U.S. inflation data.
• Data indeed showed in the 12 months through March, U.S. inflation rose 2.7% after an advance of 2.5% in February.
• That quashed hopes that the Federal Reserve would cut interest rates soon.
• Reduced crude demand in India, has also been negative for oil prices after India's March oil demand fell -0.6% y/y to 21.09 MMT.
• Meantime, OPEC Secretary General Haitham Al Ghais said in an op-ed article that the end of oil is not in sight, as the pace of energy demand growth means that alternatives cannot replace it at the needed scale, and the focus should be on cutting emissions not oil use.

This morning, oil prices were down 1%.

• Notably, Brent crude futures fell 1.09%, by 0644 GMT, while West Texas Intermediate (WTI) futures were down 0.99%.
• Israel-Hamas peace talks in Cairo eased fears of a wider conflict in the Middle East.
• Meantime, U.S. inflation data further dimmed the prospects of interest rate cuts anytime soon.
• As a result, the dollar strengthened, making oil more expensive for those holding other currencies.
• Further weighing on the outlook for oil demand, China's industrial profit growth slowed down in March, official data showed on Saturday, in the latest sign of frail domestic demand in the world's second largest economy.
• Cumulative profits of China's industrial firms rose 4.3% to 1.5 trillion yuan ($207.0 billion) in the first quarter from a year earlier, compared to a 10.2% rise in the first two months.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London declined, marking a weekly drop on the back of weaker demand in the larger vessel segments.

• Notably, the overall index fell 1.3%, hitting its lowest level in over two weeks.
• The index was down above 10% for the week.
• The capesize index shed 2.6%, marking its lowest level since April 10, and declining for the sixth straight session.
• The index registered a weekly decline of over 23%.
• The panamax index was down about 1%, marking its lowest level since April 17.
• The contract was down for the first time in the last three weeks, falling about 2% for the week.
• The supramax index was up 0.47% and recorded a weekly rise of 7.2%.

Equity markets

US stock indexes rallied.

• The Dow Jones Industrial Average rose 0.4%, S&P 500 rallied 1.02% to finish its first winning week in the last four, the Nasdaq composite jumped 2.03%.

• The S&P 500 posted a 1-1/2 week high.
• The S&P 500 and the Nasdaq registered their biggest weekly percentage gains since early November 2023.
• Stocks have been buoyed by a rally in megacap growth stocks following robust quarterly results from technology heavyweights Alphabet and Microsoft, in addition to moderate inflation data.
• Alphabet jumped 10% and reached a record high, and Microsoft rose 1.8%.
• Other megacap growth stocks also closed higher, with Amazon, rising 3.4%, Nvidia gaining 5.8%, and Meta Platforms adding 0.4%.
• However, Intel closed down more than -9%, Dexcom also closed down more than -9%, Apple fell 0.3% and Tesla closed down 1.1%.
• Stock indexes maintained their gains despite US economic news, that showed Mar personal spending and the Mar core PCE deflator rose more than expected.
• US Mar personal spending indeed rose +0.8% m/m.
• Mar personal income rose +0.5% m/m.
• The US Mar PCE core deflator rose +2.8% y/y.
• The University of Michigan US Apr consumer sentiment index was revised downward by -0.7 to 77.2.
• The University of Michigan US Apr 1-year inflation expectations were revised upward to +3.2% from +3.1%.
• The Apr 5-10 year inflation expectations were unrevised at 3.0%.
• Meantime, the 10-year US T-note yield fell -3.5 bp to 4.669%.
• In Europe, the Euro Stoxx 50 closed up +1.37%.
• Eurozone Mar M3 money supply rose +0.9% y/y, the fastest pace of increase in 10 months.
• ECB Mar 1-year inflation expectations eased to +3.0%, the lowest in over two years.
• The Mar 3-year inflation expectations were +2.5%.
• In China, the Shanghai Composite index rose to a 1-week high and closed up +1.17%.
• In Japan, the Nikkei Stock Index closed up +0.81%.
• The BOJ, as expected, voted 9-0 to hold its benchmark rate unchanged between 0% and 0.1% and said risks to prices skewed to the upside for fiscal 2024.
• The BOJ cut its 2024 fiscal year GDP forecast to 0.8% from 1.2% in Jan and said it will maintain bond purchases at around the same pace as before.
• The BOJ also raised its outlook for CPI excluding fresh food for the current 2024 fiscal year to 2.8% from a previous 2.4%.
• Tokyo Apr CPI eased to +1.8% y/y from +2.6% y/y in Mar.
• Apr CPI ex-fresh food and energy eased to +1.8% y/y from +2.9% y/y in Mar, the slowest pace on increase in 19 months.

This morning, global shares were trading higher.

• France's CAC 40 added 0.3% in early trading, Germany's DAX edged up 0.2%, Britain's FTSE 100 gained 0.5%, Sydney's S&P/ASX 200 added 0.8%, South Korea's Kospi surged 1.2%, Hong Kong's Hang Seng edged up 0.5%, while the Shanghai Composite rose 0.8%.
• Trading was closed in Tokyo for a holiday, Showa Day.

Currency trading

The dollar index rose, as the dollar recovered from a 2-week low.

• US Mar personal spending reading was stronger than expectations.
• Mar personal income also rose, and was right on expectations.
• The US Mar PCE core deflator was stronger than expectations.
• The University of Michigan US Apr consumer sentiment index was revised downward, weaker than expectations.
• The University of Michigan US Apr 1-year inflation expectations were revised upward.
• The Apr 5-10 year inflation expectations were unrevised.
• Meantime, the EUR/USD fell, with the euro falling back from a 2-week high.
• A policy divergence between the Fed and ECB is weighing on the euro, as the ECB is expected to begin cutting interest rates in June.
• In addition, the Eurozone Mar M3 money supply rose more than expected.
• ECB Mar 1-year inflation expectations eased to its lowest in over two years, though the Mar 3-year inflation expectations was stronger than expectations.
• The USD/JPY rose with the yen tumbling to a 34-year low against the dollar.
• The yen retreated after the BOJ kept interest rates unchanged and said it would maintain its pace of bond purchases.
• Losses in the yen accelerated after the BOJ cut its Japan 2024 GDP forecast.
• Tokyo Apr CPI was weaker than expectations.
• Apr CPI ex-fresh food and energy also was weaker than expectations.

This morning, the dollar cost 155.89 yen in afternoon trading. The euro cost $1.0724, up from $1.0699.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat May contract was up 1c/bu to 603.2c/bu;
• Kansas wheat May contract was up 14.2c/bu to 646.2c/bu;
• Minneapolis wheat May contract was up 6.2c/bu to 697.2c/bu;

• MATIF wheat May contract was up €3/t to €211.75/t;

• ASX wheat May contract was down A$4/t to A$344/t;
• US DWI Cash (durum wheat index), was down 1.17c/bu to 765c/bu;
• 1CWAD (Canadian durum) avg spot prices was down C$0.63/t to C$401.05/t;
• EDW (EU durum) May was unchanged to €336/t;

• Chicago corn May was down 1c/bu to 440c/bu;

• MATIF corn Jun was up €1/t to €208.5/t;

• Chicago soybeans May down 3.2c/bu to 1159.4c/bu;
• Winnipeg canola May was down C$5.1/t to C$617.7/t;

• MATIF rapeseed May was down €1.75/t to €440.25/t;

• Brent crude Jun was up US$0.49 to $89.50;
• WTI crude Jun was up US$0.28 per barrel to $83.85;

• BADI (Baltic Dry Index) was down 22 points to 1.721;

• Dow Jones was up 153.86 points to 38.239,66;
• S&P 500 was up 51.54 points to 5.099,96;
• NASDAQ Composite up 316.14 points to 15.927,90;

• US dollar index (Jun '24) was up 0.353 points to 105.804;

• AUD/USD firmer at US$0.6530;
• USD/CAD firmer at $1.3667;
• EUR/USD weaker at $1.0691;
• USD/RUB weaker at ?91.8752.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

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